Topic: [OFFICIAL]Bitfinex.com first Bitcoin P2P lending platform for leverage trading - page 253. (Read 723903 times)

after reading the backlog in this thread....

one thing which seems to be blatantly absent with many traders quite vocal in this thread is common sense.

If you want to achieve something, you need to be willing to use the appropriate means: If you want to trade quick swings over several $100 in a matter of seconds, you need a guaranteed reliable market access, and you need a trading link which responds in terms of milliseconds. If you attempt the same with just some website service, you're lacking common sense. Or to put it the other way round, you aren't acting rational, you're gambling. If you gamble, you loose on average. If you do it for the adrenaline, then please go for it, but don't whine afterwards.

You can apply rational strategies even with an unreliable slow market link. Just use more long term strategies then. For example, if you'd traded some kind of market-follow strategy, maybe even some dead simple "average crossover", then you'd be switched over to shorting days ago when we went below $800 and you'd be taking home money now. Or at least you'd be stepped out and watch the drama from the sidelines.

The trick is to find a pattern of behaviour which you are really capable of keeping up long time, and which is profitable on average.

I generally agree with this.  I'll post more suggestions if I think of anything.

I just want to add that throughout these tough times for the market and Bitfinex, I was really impressed with the responsive customer support by Giancarlo and Raphael.  They have a really tough job in making the first and only BTC margin exchange, and while they may be compensated well when the markets aren't crazy, they're certainly taking big hits and eating huge losses when things don't go well.  While I don't have a ton of experience in trading on leveraged exchanges, it seems like these experiences will allow them to make corrections necessary and possibly adjust the site's risk profile.  Unlike MtGox and the many other shady businesses we've seen so far in the Bitcoin space, these guys are always available, responsive, and giving it 110%.  Thanks for the great service, and I'm pretty confident you guys will find working solutions.  

Currently dropping from 709,
wanted to short, but your post
gave me second thoughts,
did you get that problem solved ?,
The last thing I want to do is get
stuck in a short that I'm unable to close.

I like to take a shot at the bounty.

Look at your existing measures. For one, you manage the leverage ratio. When the market is volatile, you tighten it, and vice versa. This is good. But volatility over days can be managed, how about volatility over minutes?
Suggestion: Keep this measure. Work on transparency and communication. Transparency - Define volatility in the context of leverage ratio. Communication - Make the leverage ratio prominent for margin traders on your website.

For volatility over minutes, there is no need to reinvent the wheel. Look at what the major exchanges are doing and adapt it accordingly. The basic principles are the same: Buy high sell low, leverage, panic sell during crashes, fanatic buy during rally. One word: greed. It is not the exchange owner's responsibility to manage greed but you certainly do not want them to lose everything. It is bad publicity.
The common measure is a circuit breaker which depends on 2 factors: price and time.
Suggestion: Implement a circuit breaker. Consult users on: Extent of volatility, halt duration and additional measures when halt is lifted.

Other measures are a possibility. But you certainly want them to be easily understandable and implementable. Measures too innovative (defined as measures unique to BFX) will cause confusion. It is good to consult users too before implementing any measures. One way is to put up a vote. You make the final call using users' preferences as a reference.

BFX,

You need to institute circuit breakers. They might look something like this:

Each day breakers are triggered when the market falls 20% (?) from the day's opening price. At any point when the market falls to -20% the minimum ask becomes -20%, fixed for a set period, say 30 minutes. After 30 minutes prices are then free to fall an additional 10% etc.

So take yesterday for example. Assume the opening (12:01am?) market level was $700. So if the market fell, the min ask would be $540. As the market collapsed below that offers would not be accepted below $540 but the system could accept all bids. In this way there is a 30 minute window for trades to be entered/matched in an orderly manner.

You can structure the circuit breakers to try and protect lenders, if that is your aim, but recognize that when you have a policy for managing fast markets, it is very bad form to change the rules on the fly.

Many markets use circuit breakers to positive effect. We are not inventing the wheel.


Today you basically raped traders to protect Bitfinex' lending function. Not sure why any trader would put themselves in that position again. I had submitted a Market Order to buy at about the $550 level ... thanks a lot.

Wow this is absolute bullshit. Lost money yesterday, and now BFX is down and I can't close my short position as we go up and i lose again because of Binfinex's bullshit.

The people in this forum that are not frustrated just simply have not lost significant amounts of money because of Bitfinex incompetence.

Brutal.

...seems to be down again...

Indeed it was, back up now but very slow

down at time of this post for me

How about you just STFU ?

If you guys don't like the way Bitfinex handled the situation, go trade at MtGox.

(keep doing what you do Raphael  )

After all that,

Now we are back to "SideWays",

Got to tell you,

"This Is Not The Reason I Got Into BitCoin Trading"


Definitely a Keynesian approach, Monetarists believe in leaving

Things alone and letting the Market Work Itself out, that's why it's call a Market.

+1

Don't think anybody is suggesting something like that.

agreed

Well first, if Bitcoin needed a central regulatory authority to decide its 'fair value' why not just hand it over to the Federal Reserve?  They have a hell of a lot more experience than the current exchanges.  

The market may very well decline at a rate of 10% per hour, as long as its the free market causing the decline and not some flaw in the exchange your trading on this is the inherent risk of a truly free market.  Which is why I agree to some extent a 'halt' may be reasonable in some instances.

'So long as nobody gets forced to implement these things at gunpoint, and people with a different opinion have the opportunity to start up or use another exchange, what would be the big deal?'

Maybe, but I'm not so sure starting a 'club' like that is a good idea, it reeks of potential exploitation/corruption to me.

The problem here was clearly the BFX system, they tried their best but the response was still lacking.  I think this issue can be resolved w/o extensive inter-exchange regulation.

The most proven system is a volatility interruption. Xetra for example does this. The interruption is directly followed by an auction to find a fair market price. Guess this would take some time to implement

I really haven't thought that proposal through, but if it was a good idea, and all/most exchange owners would agree on it voluntarily, then whats so nauseating about it?  So long as nobody gets forced to implement these things at gunpoint, and people with a different opinion have the opportunity to start up or use another exchange, what would be the big deal?
However, I doubt a uniform rule like that over multiple exchanges will ever be used in practice.

Umm.. I wasn't the one that made that suggestion, i just suggested a rolling half-breaker, it operates under very different set of conditions and is specific only to BFX. I'm not sure why you're associating me with the suggestion to halt all exchanges.

If Bitfinex had enough BTCs on bitstamp today, Stamp might have flashcrashed too.

I can understand halting trades when the margin calls have caused a significant difference b/w stamp and BFX, but a flat '10% per hour to decline is too much' centralized all exchange halt like a few people here are suggesting sounds ridiculous.  

What would you call such a system?  'FinCEN BTC, the first centralized authority in crypto!'

For a number of reasons the idea is nauseating.