Trade Bot forcing price down

[kjj]

If it's buying as much as it's selling how is the price trending lower?

It will continue to undercut on sells to force the price down, while lowering it's buys, and selling to fulfill buy orders that are higher than it's own. Thus, forcing the price lower.

[S3052]

A bot can not force prices up or down at all.

Only large players can do that, and obviuosly they can use bots or trade manually.

In the end, the market goes where it wants, and bots can not change the direction.

[the joint]

this bot activity is not nice at all, have been observing it for few months already and say that i would be more inclined to support exchanges that limit high freq trades from same ip or take some kind of measures to balance trading with humans and bots on the same platform. This is my personal opinion

Exchanges make money on commissions.

If you limit the high freq. trades, you'll probably get a massive transaction fee imposed.

Higher prices directly cause higher commissions.

Commission = # of trades * value

So, as value increases, # of trades can decrease and commission will remain constant.

Yes, but that is assuming the value will increase if you remove the high freq. trades.

This may happen to a small degree, but to a large degree I don't think it will.  The economy is too small to support high prices. 

[bulanula]

OMG The Manipulator is back. This time he is in robot form !!!

Personally, I think it is the big fat gov trying to drive price down so miners quit and network is compromised and illegal activity like Silk Road is stopped   <- method is much cheaper than buying up 6990s and doing it that way round.

[S3052]

do you have any evidence on that?

[bulanula]

No evidence but it really is kind of obvious if you think about it.

[kjj]

No evidence but it really is kind of obvious if you think about it.

Lots of things are obvious when you think about it.  That's kinda why people ask for proof.

[bulanula]

No evidence but it really is kind of obvious if you think about it.

Lots of things are obvious when you think about it.  That's kinda why people ask for proof.

Well you tell me how I can provide you proof the gov is onto the market and I will give it to ya.

It is highly likely somebody wants to drive price down. And also likely that this "somebody" is the gov.

[Nagle]

Oh, quit whining. Someone else's short-term trading system is better than yours. It's not a Government conspiracy. Deal with it.

Nor is the 'bot driving the market either up or down. What it seems to be doing is arbitrage between the different exchanges, which has the effect of pulling those exchanges closer together. That's a good thing. It helps stabilize the markets.


Bitcoin/USD at 15 minute interval scale.

Large spikes are rare now. High frequency trading is damping out short term noise.

[S3052]

I agree with you Nagle.

We are seeing just normal market behaviour.

If someone complains about low bitcoin prices, he/she should either buy more coins or attract others to buy coins.

[bulanula]

It's not a Government conspiracy. Deal with it.

9/11 WAS an inside job

[paraipan]

It's not a Government conspiracy. Deal with it.

9/11 WAS an inside job

+1

[elggawf]

9/11 WAS an inside job

So what you're saying if it weren't for the jews/illuminati with their robots, BTC would be back up over $10USD by now?

[Dansker]

If this works like that, why are there no such bots on the stock exchange?

[elggawf]

If it is so easy for a trading bot to manipulate the prices down, I think it would be equally easy for a bot to manipulate prices up. You should make such a bot that puposely rises prices (this bot is probably just lowering prices as a side effect), thus maximizing the value of everybodies bitcoins.

Yep, that's why I don't really buy into this story that the bot does this - it's pretty difficulty to do either without going obscenely broke in very short order. I think the implication here is that someone with a lot of cash doesn't mind losing a fuckton of it just to trash our market - pretty comical when you think about it. No one with that amount of money to burn is really going to give a shit about our little ~$38m economy. No one's going to spend shitloads of "fiat cash" trashing the economy when it's easier just to sit back and wait for Bitcoiners to do it themselves (time after time foolishly trusting anonymous companies).

[TiagoTiago]

Someone with a shitload of cash would have much more direct ways of fucking up the Bitcoin economy than by using a bot to trickle it down, no?

[2112]

(this bot is probably just lowering prices as a side effect)

The MtGox commission accounting is sufficiently non-transparent that it is possible that the "side effect" is a "main goal" of "churn". http://en.wikipedia.org/wiki/Churning_%28stock_trade%29

Years ago, when day-trading first become popular, the special brokerage firms catering to day traders had employed dedicated people to induce the traders to keep transacting and generate commissions for the house. Maybe the observed "trade bot" behaviour is just a computer implementation of such strategy?

Someone with a shitload of cash would have much more direct ways of fucking up the Bitcoin economy than by using a bot to trickle it down, no?

Risk vs. reward analysis would suggest that "trickle it down" may be the best strategy. It really worked well on the human day traders working out of the dedicated day-trading floors. There's added safety that it is done in distributed fashion over the Internet, so a repeat of the spree-killing from Atlanta is unlikely.

http://en.wikipedia.org/wiki/Mark_O._Barton

[Mashuri]

HFT's can be used to find and exploit weaknesses in trading systems.  This happens with regularity in the major western markets: http://www.nanex.net/FlashCrash/FlashCrashAnalysis.html

Given the relatively crude code used by BTC exchanges, I wouldn't be surprised if multiple exploits have been found.

[Mashuri]

FWIW, this particular article by Nanex explains just how HFT's hijack the U.S. exchanges through "quote stuffing" and effectively eliminate the NBBO:

http://www.nanex.net/Research/IsNBBOIgnored.html

[Turbor]

You have been warned! https://bitcointalk.org/index.php?topic=46000.0 Operation Delta Mine...