What are these repetitive small market orders on GDAX?

illyiller

hero member

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Quote from: mesavoida on November 19, 2017, 03:53:27 PM

I'm not sure how long this has been going on but I'm noticing it now. Every 10 seconds there's a ~123 and ~2400 sat market buy order. These amounts go up when the price goes up so that they come out to $0.01 and $0.20. Who is making these orders and why? Is this a ping of sorts testing the upper market limit?

Sometimes people call this "painting the tape" or "painting the ticker." It's a bot that is buying on a short-term automated schedule.

On one hand, the bot's operator might be legitimately averaging into a position. They are buying, but they don't necessarily want to use up all their powder at once, so to speak. On the other hand, the bot's operator might want to make the ticker appear "green" all day, which might psychologically affect traders. Traders who are on the fence or worried about being left behind on a move up might be persuaded into buying based on the bot action.

Personally, I just ignore these bots. But when the 0.000024 buy bots start getting replaced by the 1 BTC buy bots --- and this does happen sometimes --- that can actually start moving the market at these prices.

NewBet

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Quote from: mesavoida on November 19, 2017, 04:20:11 PM

I found that this was also asked on Reddit. You can try it yourself making a $0.01 market order. There's no fee for this. It says there's a .005 fee for .20, however if you do it twice you aren't actually charged a fee. On the other side, you cannot sell pennies at a time. The minimum sell is 0.01BTC (~$80).

I don't think they are trying to buy a $1M a penny at a time though. 8,640 10-second periods a day come to $86.40 and $1,728/day. If you want to buy without fees and at a better price a post only limit order will do that. One theory is that this is DCA (https://www.investopedia.com/terms/d/dollarcostaveraging.asp). I think these also could be arbitrage bots testing the market spread.

https://www.reddit.com/r/BitcoinMarkets/comments/73nw0i/a_bot_is_buying_1_cent_of_btc_every_2_seconds_on/

I think trading mind games are not even necessary to make good profits while doing it. They are just there to try to trick people but in reality anyone who knows what they are doing will not and does not fall for such scams. This is very common to see on most exchanges and especially the pump and dumps where the pumpers aka scammers want to make it seem like the price is higher than it really is. Unfortunately, most people usually believe it.

vitalman20

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That's high-frequency trading if I get you right.

You can see some small amounts there, as well huge amounts of 50-100 BTC. They do it for psychological reasons: a user sees a big 'wall' of orders and decides to buy/sell... in the meantime that big order can disappear just in the same way as it appeared

mesavoida

newbie

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I found that this was also asked on Reddit. You can try it yourself making a $0.01 market order. There's no fee for this. It says there's a .005 fee for .20, however if you do it twice you aren't actually charged a fee. On the other side, you cannot sell pennies at a time. The minimum sell is 0.01BTC (~$80).

I don't think they are trying to buy a $1M a penny at a time though. 8,640 10-second periods a day come to $86.40 and $1,728/day. If you want to buy without fees and at a better price a post only limit order will do that. One theory is that this is DCA (https://www.investopedia.com/terms/d/dollarcostaveraging.asp). I think these also could be arbitrage bots testing the market spread.

https://www.reddit.com/r/BitcoinMarkets/comments/73nw0i/a_bot_is_buying_1_cent_of_btc_every_2_seconds_on/

suncokreten

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Those small purchases are automated purchases made by bots.

They are mostly meant to drive the price up, by giving illusion there are many buy orders (when you look to the right everything is in green, but those are actually irrelevant quantities). On a positive side, because there are bots on both sell and buy side, they tend reduce the spread gap between ask and bid, so they help with the liquidity.

mesavoida

newbie

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I'm not sure how long this has been going on but I'm noticing it now. Every 10 seconds there's a ~123 and ~2400 sat market buy order. These amounts go up when the price goes up so that they come out to $0.01 and $0.20. Who is making these orders and why? Is this a ping of sorts testing the upper market limit?

Topic: What are these repetitive small market orders on GDAX? (Read 224 times)