Fast place/cancel trades question

[coinmaster2004]

Hello Gurus of trading

I am curious about the following:
Sometimes, I notice that a trade is placed in the orderbook and then the next second is canceled, then placed again etc and the process repeats.

Obviously this is a bot, but what is the point of this?  Is this a trading strategy?

[1714615073]

1714615073

[BitMaxz]

Well, I think those are trading bots maybe they set their bot to stop limit with time frame if the stop limit didn't trigger then it will automatically be canceled.

So yes it's a strategy like on Zenbot free trading bot you can make your own strategy and set your bot to a specific time frame and if didn't trigger it should automatically stop trading.

[hugeblack]

You can't get an exact answer as to why but if the pattern is every second and it repeats so hard that it becomes impossible to do it manually then it is a bot but what is the reason behind doing it?

 - Price manipulation: Sometimes a lot of fake buy and sell orders are created to affect the price.
 - Trading strategy: to test a certain point, so if it is not achieved, the position will be closed.
 - Swing trading: bots are characterized by speed and sometimes the differences between trading pairs are profitable.
 - Technical error: Not likely, but if it is rare, it may be.

There may be other reasons.

[palle11]

That is bot interacting with market price. Either it is sell limit order or a buy limit orders. It may trigger or not depending on the command. So yes your observation is right but you don't need to bother yourself on it if you are not using not just to understand what it is. It is as simple as that, a bot set for an order either to buy or sell and gets cancelled when not triggered.

[DarkDays]

You can't get an exact answer as to why but if the pattern is every second and it repeats so hard that it becomes impossible to do it manually then it is a bot but what is the reason behind doing it?

 - Price manipulation: Sometimes a lot of fake buy and sell orders are created to affect the price.
 - Trading strategy: to test a certain point, so if it is not achieved, the position will be closed.
 - Swing trading: bots are characterized by speed and sometimes the differences between trading pairs are profitable.
 - Technical error: Not likely, but if it is rare, it may be.

There may be other reasons.

Yes, exactly. There can be many reasons why the bot is always taking second place in order books. As pointed out above, this could be simple price manipulation or price testing. Since, these are very technical gimmicks that only a handful know, we can only speculate.

What's certain is that nobody is manually doing any of this and I suppose the take home message is that you it is not your manual limitation - it is set up in a manner to always follow a specific pattern.

Best to do is be aware and if possible use a different exchange so you don't get caught up in this manipulation.

[nelson4lov]

Yep, it's obviously a trading strategy, otherwise what would be the point of placing and cancelling orders seconds apart. I have noticed it too before in some exchanges, especially with trading pairs that don't have a huge trading volume like BTC/USDT

If it's a strategy, I think its because the bot is trying to get a price in and it keeps doing these iterations to try and get the best price possible for the order. I've noticed it a couple of times myself and every time there's a change in the order book, the bot makes readjustments. That's my own theory of that situation.

[randegibran]

Hello Gurus of trading

I am curious about the following:
Sometimes, I notice that a trade is placed in the orderbook and then the next second is canceled, then placed again etc and the process repeats.

Obviously this is a bot, but what is the point of this?  Is this a trading strategy?

Just my opinion only they want try to make investor and other trader panic with his orderbook place and later cancel it, maybe he want us how to make orderbook above their price and other side he has much coin to sell, he try to give us interested way where seeing coin have much orderbook buy and we try to buy above price order by them, but few second they cancel buy order and our order filled but price suddenly dump.

[Findingnemo]

Hello Gurus of trading

I am curious about the following:
Sometimes, I notice that a trade is placed in the orderbook and then the next second is canceled, then placed again etc and the process repeats.

Obviously this is a bot, but what is the point of this?  Is this a trading strategy?

Cancel? Then the user is actually doing it. But some exchanges make trades using bots and execute them purposely to increase the volume of the coin so the cancelled trade may not add up into the volume which means exchange has no reason to do it. But how can you find the trade is cancelled not just executed?

[mk4]

Cancel? Then the user is actually doing it. But some exchanges make trades using bots and execute them purposely to increase the volume of the coin so the cancelled trade may not add up into the volume which means exchange has no reason to do it. But how can you find the trade is cancelled not just executed?

Pretty simple — the exchange order is not filled/executed if the price didn't reach(or not even reach close to) the price of the buy/sell order. Like, I can place a buy order right now on BTC at $20,000 and expect it to not execute any time soon(or possibly ever, unless we get an exchange crash due to lack of liquidity).

[Mauser]

Hello Gurus of trading

I am curious about the following:
Sometimes, I notice that a trade is placed in the orderbook and then the next second is canceled, then placed again etc and the process repeats.

Obviously this is a bot, but what is the point of this?  Is this a trading strategy?

Yes this is a trading strategy by bots that try to influence the market price and trade against it. I am not an expert on this, but I remember the story of the flash crash in 2010 where a single trader from the suburbs of London managed to destroy trading in 30 minutes. Very interesting story I can recommend watching a documentary about it. He basically created millions of buy and sell orders through his bot but cancelled them before they get executed. This is very risky if you don't have the best equipment and technology. Also the exchange might block you if they find your actions harmful.

[Ararbermas]

Hello Gurus of trading

I am curious about the following:
Sometimes, I notice that a trade is placed in the orderbook and then the next second is canceled, then placed again etc and the process repeats.

Obviously this is a bot, but what is the point of this?  Is this a trading strategy?

if you're using a bots perhaps its normal, there's a cancellation and another buy order, it sometimes happens when there's an error or a set up that didn't work wherein reason the bot you're using is making adjustments in order to get a successful trade. Remember bots will work depends on their program so if you have a bots for intraday it's normal because they set many trades everyday automatically..