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'Picasso', the Painter on GDAX?
- alex_young 9y agoQuestion is why wouldn't this be going on? When there are different exchanges each with their own price it invites arbitrage.
- dahdum 9y agoAuthor is claiming that a single bot is able to drive up the price on GDAX and then arbitrage the difference, ignoring the fact that more than 1 bot is in operation.
- fapjacks 9y agoA lot more than 1 bot in operation. All you have to do is just sit there and watch the trading. It's fairly obvious there are a bunch of bots trading at any given time.
- deleted 9y ago[deleted]
- anilshanbhag 9y agoI don't get the point of this article. The bot he says is buying 95 BCH at 8500. I don't see how this is profitable as the the price quickly falls and the bot lost a lot of money. This is just a bunch of bots trying to catch trends. You can see this on the stock market as well. See stocks like LFIN or LTEA.
- no_protocol 9y ago> the price quickly falls and the bot lost a lot of money If the trader already holds 1,000 BCH and is able to spend $800,000 to raise the price he can get rid of it at by $1000, he didn't lose money. Doesn't necessarily mean it was a bot, though.
- gchokov 9y agoYou are getting it wrong. The bot is not buying, but placing an order / intention to buy. This pumps the price. Just before the order is filled-in, the trade order is canceled, but the price is already pumped.
- ycombobreaker 9y agoFirst, the last traded price doesn't change by bids or asks, only trades. So you can spoof with passive orders, but that only affects the "midpoint" and never the "last" price. The article discusses painting the tape which means trades. Second, outside of a "last look" type of market, no market participant can identify the time "just before [their own] order is filled". Can you identify any Bitcoin market where last look is in effect? It would be plausible (it is common in spot FX markets) but clear evidence would be available.
- bufferoverflow 9y agoThat's not how it works. Placing an order does not change the price, it only adds it to the book of orders. If the order executes (a buy and a sell orders are matched), then that's the current price. That's where author's theory makes little sense. It's quite expensive to sell to yourself. Even if you're a high-volume trader on GDAX, you pay 0.1% on each executed trade. So you make 400 trades, you lose half of your money to the fees.
- foepys 9y agoIt makes a lot of sense because the buyer and the seller are the same person or group. Even if you lose 0.1% on that transaction, you can easily get that back if you can manipulate the price high enough. We are not talking about people that have 100 BCH but rather 100.000 or more.
- bufferoverflow 9y agoYou can't if there's no actual support for that high price from the community. And that's what the whole article is about. Without the support, the price just crashes to the natural levels, as soon as people see some idiots trading at much higher prices than everywhere else. Which is exactly what happened. Two independent bots that got caught in each other's lies and spiked the price makes at least some sense. One bot trading with itself makes no economic sense.
- fiter 9y agoThe bot is buying it from itself. From the article: > Painting the tape is a form of market manipulation whereby market players attempt to influence the price of a security by buying and/or selling it among themselves so as to create the appearance of substantial trading activity in the security.
- exabrial 9y agoMy brother and I were talking tonight about arbitrage and how it's likely happening on Bitcoin considering how close the exchanges are tracking each other despite being independent from each other.
- aidanlister 9y agoLikely happening? Google “bitcoin arbitrage” ... why would there not be?
- modeless 9y agoArbitrage is legal and beneficial.
- hw 9y agoThere's definitely a lot of arbitrage opportunities. BTC on GDAX has been at a 1k-1.5k premium over most other exchanges (although the gap has since closed a bit) You'll often see korean exchanges having a 1-2k premium as well, but it's not easy to arbitrage since the korean govt has a lot of rules regarding money laundering and money entering / exiting, not to mention you'd probably need a korean bank account.
- zodiac 9y ago> how close the exchanges are tracking each other despite being independent from each other Happens with non-crypto assets too (e.g. forex)
- senatorobama 9y agoWhat's a good BTC trading firm that pays in BTC?
- dahdum 9y agoAuthor is mistaking basic exchange dynamics, arbitrage issues with USD, and drawing up a wild conspiracy from almost nothing.
- ojr 9y agohe is trying to trigger a bank run, but doesn't realize our whole financial system runs on fractional reserves
- mempko 9y agoFractional reserve blanking is not a real thing.
- irln 9y agoDo you mean that it's not "a real thing" because some banks are not limited to loans amounts within reserve requirements?
- mempko 9y agoBecause the majority of banking systems dont require any reserves. Even in the USA certian household debt like mortgages require reserves while most other debt like commercial does not. And even with mortgages banks have 30 days to come up wuth the reserve. In other words, it doesn't exist as the texbooks describe.
- deleted 9y ago[deleted]
- dang 9y agoOk, we'll give you a question mark in the title above. Merry Christmas!
- adjkant 9y agoAs someone using machine learning to identify the patterns of bots on GDAX and riding the waves accordingly, I can say this is certainly happening. It's not just one bot though. There is huge money right now in crypto markets, both illegally and legally.
- thisisit 9y agoWhile I don't doubt there are bots out there. How are you able to differentiate between bots and human trades?
- thrownaway577 9y ago.
- tuxxy 9y agoMind sharing some or a place to get started in learning them?
- thrownaway577 9y ago.
- oil7abibi 9y agoWhat did he say?
- adjkant 9y agoPersonally, I'm not fully, though I'm sure there are methods. Realistically, right now the naive solution is working just fine, which is just identifying market trends. Because so much is bots, it inherently learns the trends of bots, allowing me to write an algorithm that reacts to said trends. The human trading more or less accounts to be the noise level over the bot patterns, though I'm sure some bots also react to the noise, increasing the noise in practice for my purposes. All I know is I can get a good enough accuracy right now to make pretty accurate guesses.
- thisisit 9y agoI believe that the reason we saw Bitcoin Cash start out trading like this, several hundred percent higher than the rest of the market, is because the tape painting bot was unleashed on this trading pair too early. So, the Coinbase spike was not due to "insider trading" but a bot and they should investigate the bot? The amount of wild theories is just mind boggling. While there are serious doubts on Tether this seems a stretch just to tie thing to Bitfinex.
- tehlike 9y agoThe theory was, price increase prior to announcement (couple days) was insider trading. After announcement might be bot.
- johnwheeler 9y agoHis assertion that no humans would place certain irrational trades seems dubious. Sure they would. What am I missing?
- paultownsend 9y agoAt that time $8500 was more than double the price BCH was trading at on all other exchanges. A human buying 95 at that price differential isn't just irrational - it's insane.
- asenna 9y agoWhen the news went out that BCash is being listed, the price on Bittrex shot up to $5k and then started settling down at around $4k. At that exact time, the price on Gdax was showing over $9.5k after which they halted trading for the day. I am with the author on this one, no human with good intentions would put a buy order at that price.
- jlavine 9y agoGDAX started market trading way too soon, after a surprise launch of BCH trading. The momentary price spike could simply have resulted from people making unwise market orders without enough sell limits yet in place. GDAX shut down trading a second afterward, until the following day, when they allowed more time for limit orders to build up before opening market trading.
- xorcist 9y agoThat there is software trading these order books is not disputed. They even publish APIs for the purpose. However the argument that no human would place a buy order at a significant premium over market value is not a good one. Many people issue market buy orders. (Why? Some exchanges prioritize them over limit orders. That might be one reason. Another might be that Coinbase's customers aren't predominantly day traders.) Coinbase is known to have issues with their trading engine. They have outages every time there are large market movements. They can be very slow to execute places orders and there have been spurious reports of people having their orders executed out of order. If the order book was empty, the execution engine lagging the user interface considerably, and many people placing market buy orders, this outcome is expected. Coinbase probably did the right thing to disable trading for a while. If a trading engine that could keep up with the user interface was a possibility for them that would probably have happened years ago.
- tobltobs 9y agoShameless plug: The orderbook visualizations of http://www.dancingbots.com http://www.dancingbots.com help to understand the different kind of bots on various exchanges. However, for some/most strategies one would need a higher resolution (seconds, not minutes) and more focus on the area around the current price.
- mv4 9y agoCool. It's interesting how the thumbnails look more organic than the large images. Some patterns are more pleasing at lower res (screen, not data).
- modo_ 9y agoIt's also worth mentioning this [1] blog post from 2014 on orderbook visualization. It has a great explanation of the methods and insightful analysis. [1] http://parasec.net/transmission/order-book-visualisation/ http://parasec.net/transmission/order-book-visualisation/
- lgats 9y agoOr perhaps all this painting is coming from the market orders placed on coinbase