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Author Topic: Has anyone witnessed moving up the ask wall enough to get a good short on bitcoi  (Read 3454 times)
fcmatt
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March 20, 2012, 05:33:40 PM
 #1

Has anyone witnessed moving up the ask wall enough to get a good short on bitcoinica?

Last night I was watching the order book. Some ask orders came in which involved blocks of around 600 BTC each.
They started around 4.82 and worked themselves right up to 4.86-4.87. Once bitcoinca had a sell price of 4.86
for about a few minutes they immediately disappeared. This makes me think things were manipulated to get in
a good short price which over the last 24 hours could have resulted in a tidy 10 cent profit per BTC shorted.

Now since I was watching i decided to join in the fun and also did a short at 4.8646. I should have already let
it go but I decided to just wait and see what happens.

I just have to wonder how many other games are being played by folks who have enough BTC/cash? Can you
give other "possible" examples?

It seems like I and possibly others are now waiting to see what the manipulators do because without them the
bitcoin market would just hum along with little to no change (excluding external forces like hacking and what not).
I would imagine they have a lot of cash once again instead of BTC?

Anyway.. just food for though. Perhaps the tinfoil hat is in order here.
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March 20, 2012, 05:51:24 PM
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People are waiting for a new trend. The bids are looking pretty light especially when all major trend line have been broken and a recent sell off. I'm waiting till we see at least 4.50

Bitcoinica still has not given me 50% of my claim of 600 BTC
INTERSANGO can go down with bitcoinica for abandoning customers
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March 20, 2012, 06:07:07 PM
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People are waiting for a new trend. The bids are looking pretty light especially when all major trend line have been broken and a recent sell off. I'm waiting till we see at least 4.50

I'm not buying again until we go below $4.
fcmatt
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March 20, 2012, 06:52:00 PM
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I recall that happening and that is not what I was referring to. These were actual orders
that influenced bitcoinica's values. While those did not if I recall correctly.

They put them in (ask orders), influenced bitcoinica (i think), got their short, and canceled the asks.
All within several minutes.

Just thought it was worth mentioning.
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March 20, 2012, 07:13:18 PM
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I recall that happening and that is not what I was referring to. These were actual orders
that influenced bitcoinica's values. While those did not if I recall correctly.

They put them in (ask orders), influenced bitcoinica (i think), got their short, and canceled the asks.
All within several minutes.

Just thought it was worth mentioning.

Um... Only bids can influence the sell price on bitcoinica.  They don't give a shit what others want to sell for.  The care what others will buy for when determining what price their customers can sell for.

https://www.bitcoin.org/bitcoin.pdf
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fcmatt
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March 20, 2012, 07:19:33 PM
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I recall that happening and that is not what I was referring to. These were actual orders
that influenced bitcoinica's values. While those did not if I recall correctly.

They put them in (ask orders), influenced bitcoinica (i think), got their short, and canceled the asks.
All within several minutes.

Just thought it was worth mentioning.

Um... Only bids can influence the sell price on bitcoinica.  They don't give a shit what others want to sell for.  The care what others will buy for when determining what price their customers can sell for.

I reversed the term. I meant bids. Sorry about the confusion. My first post used the correct term.
navigator
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March 20, 2012, 09:05:52 PM
 #7

Yes fcmatt, people are doing what you describe. I don't know why others in this thread are trying to derail your topic. I figured it out a while back. I've done it a few times with ~$1K. Put up a bid wall, it raised the sell price on bitcoinica by 1-2cents, put in your short at bitcoinica, then remove your bid. It works the other way too.
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March 20, 2012, 09:10:31 PM
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Any time a wall appears close to trade I think there's a high chance this is happening.

The person still has to know / expect the market to move a particular way afterwards, though...perhaps without their influence.
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March 21, 2012, 01:41:25 PM
 #9

The trick is to look at the spread graph and use several limit orders each day to get a position. Cumbersome but your position improves significantly, even better than if you have a wall to position against.

Independently: You really wanna short now? Risky...

First they ignore you, then they laugh at you, then they keep laughing, then they start choking on their laughter, and then they go and catch their breath. Then they start laughing even more.
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March 21, 2012, 04:35:52 PM
 #10

Doing this can result in your Bitcoinica account being closed. We don't allow fraudulent orders that try to cheat the pricing bot.

We are rolling out a major rewrite of our order matching engine for much faster order processing to eliminate the possibility of fraudulent orders.

EDIT: We closed one account during the early days of Bitcoinica because of fraudulent trading. After that, we implemented pricing algorithm version 2, and it's harder to manipulate the price now. We are going to release pricing algorithm version 4 soon.

Founder of NameTerrific (https://www.nameterrific.com/). Co-founder of CoinJar (https://coinjar.io/)

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fcmatt
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March 21, 2012, 04:47:44 PM
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Doing this can result in your Bitcoinica account being closed. We don't allow fraudulent orders that try to cheat the pricing bot.

We are rolling out a major rewrite of our order matching engine for much faster order processing to eliminate the possibility of fraudulent orders.

EDIT: We closed one account during the early days of Bitcoinica because of fraudulent trading. After that, we implemented pricing algorithm version 2, and it's harder to manipulate the price now. We are going to release pricing algorithm version 4 soon.

That is good to hear. The market is so small a few thousand BTC/USD can really walk the price up/down several
cents in some situations to improve your short/long.

I was basically watching it happen again last night. But in the case of last night, the person was sold into a couple
of times defeating their attempt. (I think, this is all speculation).

It just seems it will be impossible to totally defeat it unless you want to delay moving the price as quickly when
new orders pop up or go away?
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March 21, 2012, 06:06:47 PM
 #12

Doing this can result in your Bitcoinica account being closed. We don't allow fraudulent orders that try to cheat the pricing bot.

We are rolling out a major rewrite of our order matching engine for much faster order processing to eliminate the possibility of fraudulent orders.

EDIT: We closed one account during the early days of Bitcoinica because of fraudulent trading. After that, we implemented pricing algorithm version 2, and it's harder to manipulate the price now. We are going to release pricing algorithm version 4 soon.

That is good to hear. The market is so small a few thousand BTC/USD can really walk the price up/down several
cents in some situations to improve your short/long.

I was basically watching it happen again last night. But in the case of last night, the person was sold into a couple
of times defeating their attempt. (I think, this is all speculation).

It just seems it will be impossible to totally defeat it unless you want to delay moving the price as quickly when
new orders pop up or go away?

Faster trade execution will help.  People will stop doing this if bitcoinica chews up their own orders.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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fcmatt
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March 21, 2012, 06:23:55 PM
 #13

Doing this can result in your Bitcoinica account being closed. We don't allow fraudulent orders that try to cheat the pricing bot.

We are rolling out a major rewrite of our order matching engine for much faster order processing to eliminate the possibility of fraudulent orders.

EDIT: We closed one account during the early days of Bitcoinica because of fraudulent trading. After that, we implemented pricing algorithm version 2, and it's harder to manipulate the price now. We are going to release pricing algorithm version 4 soon.

That is good to hear. The market is so small a few thousand BTC/USD can really walk the price up/down several
cents in some situations to improve your short/long.

I was basically watching it happen again last night. But in the case of last night, the person was sold into a couple
of times defeating their attempt. (I think, this is all speculation).

It just seems it will be impossible to totally defeat it unless you want to delay moving the price as quickly when
new orders pop up or go away?

Faster trade execution will help.  People will stop doing this if bitcoinica chews up their own orders.

I guess I do not understand how this will help. I am slow today.

I want to short at 4.86. I put in a sell order for 2500 BTC. The current bid is at 4.78.

An hour later the market seems right for manipulation by putting up a few walls of bids as there is a large difference between
the lowest ask and the highest bid.

So i put 400 BTC at 4.82. I put 400 BTC at 4.84. I put 400 BTC at 4.86. I put 400 BTC at 4.88. I am getting pretty close to my
target and the nearest ask is still at 4.92.

My order executes at 4.861 and I am now short 2500 BTC. I remove all my bids.

How would faster order execution help in this case?
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March 21, 2012, 08:45:42 PM
 #14

So i put 400 BTC at 4.82. I put 400 BTC at 4.84. I put 400 BTC at 4.86. I put 400 BTC at 4.88. I am getting pretty close to my
target and the nearest ask is still at 4.92.

My order executes at 4.861 and I am now short 2500 BTC. I remove all my bids.

How would faster order execution help in this case?
I'm not sure that the example you gave here is actually valid.

When you go to put in your short at Bitcoinica, the Mt. Gox market depth at 4.86 is still only (your own) 800BTC. Not enough for Bitcoinica to materialize your short on the open market (since presumably nobody on Bitcoinica itself is bidding so high).

So I don't think it should actually let you issue this short at that price.

And if you did make big enough bids for the market depth to be sufficient to materialize a 2500BTC short, then... Bitcoinica would execute the short, and match it on the market using your own bids. Which means you've just short-sold 2500BTC to yourself, and paid 2500BTC worth of market commissions to accomplish basically nothing.

(Edit: the way fast order execution helps is if you manage to cancel your bids between placing your short on Bitcoinica and Bitcoinica executing your short, because then your coins aren't the ones left holding the bag.)

If there is something that will make Bitcoin succeed, it is growth of utility - greater quantity and variety of goods and services offered for BTC. If there is something that will make Bitcoin fail, it is the culture of naive fools and conmen, the former convinced that BTC is a magic box that will turn them into millionaires, and the latter arriving by the busload to devour them.
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March 21, 2012, 10:01:43 PM
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So i put 400 BTC at 4.82. I put 400 BTC at 4.84. I put 400 BTC at 4.86. I put 400 BTC at 4.88. I am getting pretty close to my
target and the nearest ask is still at 4.92.

My order executes at 4.861 and I am now short 2500 BTC. I remove all my bids.

How would faster order execution help in this case?
I'm not sure that the example you gave here is actually valid.

When you go to put in your short at Bitcoinica, the Mt. Gox market depth at 4.86 is still only (your own) 800BTC. Not enough for Bitcoinica to materialize your short on the open market (since presumably nobody on Bitcoinica itself is bidding so high).

So I don't think it should actually let you issue this short at that price.

And if you did make big enough bids for the market depth to be sufficient to materialize a 2500BTC short, then... Bitcoinica would execute the short, and match it on the market using your own bids. Which means you've just short-sold 2500BTC to yourself, and paid 2500BTC worth of market commissions to accomplish basically nothing.

(Edit: the way fast order execution helps is if you manage to cancel your bids between placing your short on Bitcoinica and Bitcoinica executing your short, because then your coins aren't the ones left holding the bag.)

First, and as always this is just speculation, that when the price is walked up and I ASSUME someone is trying
to short on bitcoinica, that I never see what I think is bitcoinica actually selling BTC to match it. Overall they may
buy and sell themselves to equalize their internal books to run their business but not for every specific order. Otherwise
would I not see my own shorts show up on mtgox as a sell order when I short 100-250 BTC? And I do watch.

I am not convinced that bitcoinica actually sells any bitcoins when someone places a specific short. Huh

Perhaps you are right though and it would be nice for someone more knowledgeable to answer.
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March 21, 2012, 10:17:58 PM
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I think they would match internally against buyers first, since they then don't have to pay a gox transaction fee.

I understand why they would want to do that...I'm just not sure if they realize it is at odds with the whole nature and point of shorting to begin with. If a person's transactions have no real effect on the market, it is incredibly easy to fuck with people if you know there are a lot of people leveraged (recent starfish problem, and now an "interest" problem).

Also...in the real world 10,000 leveraged buys is a 10k move in the marketplace. If you do that on bitcoinica, you're exposing yourself to 10k risk without the real world benefit of just buying 10k shares.
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March 21, 2012, 10:22:25 PM
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I think they would match internally against buyers first, since they then don't have to pay a gox transaction fee.

I understand why they would want to do that...I'm just not sure if they realize it is at odds with the whole nature and point of shorting to begin with. If a person's transactions have no real effect on the market, it is incredibly easy to fuck with people if you know there are a lot of people leveraged (recent starfish problem, and now an "interest" problem).

Also...in the real world 10,000 leveraged buys is a 10k move in the marketplace. If you do that on bitcoinica, you're exposing yourself to 10k risk without the real world benefit of just buying 10k shares.

We match internally only when we can. If one customer buys 100 and the other sells 50. We just buy 50 from the market, instead of buying 100 and then selling 50, which merely removes liquidity and increases transaction costs.

Founder of NameTerrific (https://www.nameterrific.com/). Co-founder of CoinJar (https://coinjar.io/)

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March 21, 2012, 10:35:03 PM
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I think they would match internally against buyers first, since they then don't have to pay a gox transaction fee.

I understand why they would want to do that...I'm just not sure if they realize it is at odds with the whole nature and point of shorting to begin with. If a person's transactions have no real effect on the market, it is incredibly easy to fuck with people if you know there are a lot of people leveraged (recent starfish problem, and now an "interest" problem).

Also...in the real world 10,000 leveraged buys is a 10k move in the marketplace. If you do that on bitcoinica, you're exposing yourself to 10k risk without the real world benefit of just buying 10k shares.

We match internally only when we can. If one customer buys 100 and the other sells 50. We just buy 50 from the market, instead of buying 100 and then selling 50, which merely removes liquidity and increases transaction costs.

Like I said, I understand why you do it. What is your window to buffer a matched order?
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March 22, 2012, 12:00:19 AM
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I think they would match internally against buyers first, since they then don't have to pay a gox transaction fee.

I understand why they would want to do that...I'm just not sure if they realize it is at odds with the whole nature and point of shorting to begin with. If a person's transactions have no real effect on the market, it is incredibly easy to fuck with people if you know there are a lot of people leveraged (recent starfish problem, and now an "interest" problem).

Also...in the real world 10,000 leveraged buys is a 10k move in the marketplace. If you do that on bitcoinica, you're exposing yourself to 10k risk without the real world benefit of just buying 10k shares.

We match internally only when we can. If one customer buys 100 and the other sells 50. We just buy 50 from the market, instead of buying 100 and then selling 50, which merely removes liquidity and increases transaction costs.

Like I said, I understand why you do it. What is your window to buffer a matched order?

It's not a time buffer but an amount buffer. We don't disclose the exact amount, but it's definitely under 1000 ฿.

Founder of NameTerrific (https://www.nameterrific.com/). Co-founder of CoinJar (https://coinjar.io/)

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March 22, 2012, 12:20:44 AM
 #20

Right, so it doesn't hurt Bitcoinica when you do this.  It just gives a small advantage to the minority opinion in the market since they can set orders that won't be touched by their trades.  This is a problem that will balance itself.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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