Taking a page from the volatility bot (beat me to the name darn you), I have been testing this for a couple months on my own java bot for mtgox. But wanted to document the findings so far, I began with about 45 btc, only made about 50btc so far (5btc profit). But based on my findings so far I would estimate I could turn around a decent profit over time. I have not been able to figure an algorithm that would be able to work in the EMA and calculating spreads to make a profit so I have come to the conclusion that it requires a person watching at all times just in case a sudden dip or rally in pricing comes around. These bots do perform better under volatility as the other thread pointed out. I have some slightly different views on how the trades should be performed though and until I get my nominal trade fee down another tier I dont think I will make big profits on it. But so far got it down to the .46%, I am looking into setting up a security on glbse also in imitation. Now that I have my trade fee down some though I will keep toying with it for another week in hopes that I wont need to open up a security. I have visited the forums for information many many times and gotten lots of great information, so hoping this will help other bot builders in their future endeavors. I will not be using multiple markets, my goal is not to arbitrage in any way, I only plan to use the market to move the btc back and forth without any sort of emotion involved since I wont freak out when the pricing goes up or down and FUD panic sell/buy in desperation.
And to quote the other thread:
Bot is very secure, never makes a loss, makes money on volatility. The bigger the market volatility, the bigger the returns. But according to my calculations ROI is pretty low. On a high volatile market (like the one this week and last week), it would yield up to 0.6-0.8% per week (I already substracted 10% management fees from that), but usually less than 0.5%. Profits should improve if there's bigger trade volume, currently bot pays 0.6% fee per trade as the trade volume is less than 100 BTC. For trade volume > 100 BTC, MtGox charges only 0.55% etc.
Bot is working on EUR/BTC market and has orders in the range between 3 EUR/BTC to 10 EUR/BTC (current price is around 7 EUR/BTC). If the price is swinging in this range bot is making money. If the price will go upwards of 10 EUR/BTC that shouldn't be a problem because all the profit is always on the BTC side (bot is always buying first if there's available EUR balance) and each order is valued at the EUR price, so I can move the range upwards without losing money. If price will go downwards of 3 EUR/BTC there will be a decision to make if to move the range downwards and lose some profit or close down the operation and return the money.
MtGox account will of course be protected by 2-factor authentication and withdrawals through API will be blocked.
I will setup this as a company with voting rights. I plan to issue 1000 2000 shares at 0.1 BTC, total 100 200 BTC, for starters.
Everything I have read up on his thread is correct ROI is low, but I think it can be increased by drawing lower profits on the trades until the fee is dropped down. This will be my goal, to break even on each trade until I have my fee down to less than 0.4%.
Bots funds: Going to start with 50Btc to have a nice round number to begin with.
Bot MtGox USD
Approximate value of funds: 50btc
Current Trade Fee: 0.46%
Bots performance:
Week Start End Profit Fee (10%) Dividend per share ROI/week (So far)
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1 9/16/12 9/22/12 4.3 N/A(glbse isnt open yet so fee/share wont be here) ~8.6%
1 9/23/12 9/29/12 2.7 N/A(glbse isnt open yet so fee/share wont be here) ~5.4%
This week has been going not quite so good, the bot got stuck on the wrong side of the trend and had to wait for the market to rise back up to continue trades.