Why don't exchanges run their own bots? - page 2.

PremiumCodeX

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Quote from: BitHodler on May 19, 2017, 03:57:20 PM

I rather pay someone to develop a unique trading bot backed by a superior algorithm than using one from an exchange.

How would you imagine this "superior algorithm"? Would you prefer to have leave the elaboration of this algorithm to the author (so that you could simply select it) or wish the author offered you a wide range of customization options so that you could create this algorithm as an user-configuration?

pinkflower

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Quote from: Hydrogen on May 26, 2017, 03:10:01 PM

Also should be noted some exchanges offer platforms which (I think) have a limited amount of automated algorithmic trading functions built into them. Basic things like stop limit orders, sell if price reaches a certain trigger point, etc. I think I've seen support for those types of things on btc-e years ago, if I'm remembering right.

That could be one reason why exchanges don't offer bots, the trading platforms they support already have some automated and algorithmic trading options built into them via default.

Thats true. In a way if you automate your trades by using stop limit orders it could be one way of trading like a bot although its limited. Instead of having bots why dont the exchanges have if-else type of stop limit orders?

Hydrogen

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Also should be noted some exchanges offer platforms which (I think) have a limited amount of automated algorithmic trading functions built into them. Basic things like stop limit orders, sell if price reaches a certain trigger point, etc. I think I've seen support for those types of things on btc-e years ago, if I'm remembering right.

That could be one reason why exchanges don't offer bots, the trading platforms they support already have some automated and algorithmic trading options built into them via default.

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Quote from: mrcash02 on May 19, 2017, 04:03:48 PM

Poloniex has its bot, but it's to automate the lending process, not trading. I don't know why they don't provide the same service for trading, maybe because it would be a complex service and dangerous to use, as you are risking your money in a bot system and with the currently technology, the bots aren't so smart like we see in futuristic movies.

It would level the playing field if an exchange like Poloniex had a bot available to program and to deploy. It should be something to be looked into. As the competition between exchanges become tougher and tougher, there will be creative ways to attract clients. An inhouse botting service could be the next step.

nativehasher

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I think they very well run their own bots, just not open to the public. You need to maintain an edge (the 0 latency bot here, with no rate limits!) to make money.

Wipro

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Quote from: ASHLIUSZ on May 20, 2017, 09:11:28 PM

With exchanges the things vary depending on the time period with more users involving into trading activities based on the price pumping of different coins listed to the exchange. So if bot makes every move, profitability will be stable and won't get a better profiting depending on the trading volume.

Most of the trading site uses the automated escrow to confirm the payment made and release the bitcoin if delayed in releasing according to the reference. Trade rate will be fix by each trader according to their desired value. If this automate, traders will not able to make profit by buying or selling the more bitcoins.

wilson_bitbybit

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Someone correct me if I'm wrong, but I think they could face some legal issues with that.

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The idea of a bot is an attempt to do technical analysis and earn profit from the market. If everyone ran a bot with similar parameters at the same time, there would be absolutely no point in having a bot at all because all the profits always even out to zero, except for the fees that go to the exchange.

The only reason exchanges allow bots at all is because of the fees they get from switching between currencies. Overall, therefore, the profits would result in a very significant negative number.

raven7886

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Quote from: ASHLIUSZ on May 20, 2017, 09:11:28 PM

With exchanges the things vary depending on the time period with more users involving into trading activities based on the price pumping of different coins listed to the exchange. So if bot makes every move, profitability will be stable and won't get a better profiting depending on the trading volume.

But the fact is trading is P2P model, if you are making profits someone else on the other end booking losses. So, there will be no even profitability will be possible for ever and that is due to trading bot is completely impossible.

Exchanges may come with add-on bots as paid or free services as it will be helping them to generate more revenues but for traders view there will be no significant improvements in profit making capabilities, I am afraid.

ASHLIUSZ

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With exchanges the things vary depending on the time period with more users involving into trading activities based on the price pumping of different coins listed to the exchange. So if bot makes every move, profitability will be stable and won't get a better profiting depending on the trading volume.

Hydrogen

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Some exchanges have $16,000,000 in buy orders at any given time. They charge a 5% withdraw fee.

What's 5% of $16 million? $800,000. For those running an exchange making $800,000 tops, even at a conservative estimate of that amount its a good chunk of money. Not certain how much cash bot authors are raking in. It would be interesting if that number could be quantified and compared to potential profits on trades and withdrawals on exchanges.

One reason exchanges might not want to provide traders with bots is, if the bot made a bad trade people could get the idea the exchange deliberately authored a bad bot designed to make them lose money. Some industries like forex are accused of following similar practices where the trading software they provide can be extremely flawed at times & designed for traders to lose money.

freebutcaged

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Oh you sweet chick I'm already in love with your gullible and beautiful mind, what should they do sell you bots? we ll how'd you know it's not already them selling as third parties?

All exchanges have their own special bots pumping and dumping coins 24/7 polo is one of them and they don't need competition while they can lure traders with their bots pumping coins. It's not worth it overall.

Kevin77

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Quote from: PremiumCodeX on May 19, 2017, 03:35:01 PM

Why do not exchanges host the features in their own site as services,

Because you may start accusing exchange house for not providing a versatile trading bots Wink

Moreover exchanges are operating trader vs trader model unlike how gambling houses are providing house vs player model. That is the reason, it is possible and profitable for gambling houses to offer automated gambling features.

Trading cannot be sure all the times and hence no bots could be sure about making profits. Still, if exchanges come wil paid bots, it may lead to accumulating more revenues along with how they are making only with fees.

mindrust

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It is because no bot can save you if the markets are failing. Trusting a bot on a bear market will make everything worse. Bots can make slightly more profits than holding, only if there is a bull market at that moment. Exchange owners know this very well so they don't take risks with bots.

Also, when you are the market maker for a few altcoins which aren't listed on the other exchanges, insider trading makes a lot money than botting.

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Poloniex has its bot, but it's to automate the lending process, not trading. I don't know why they don't provide the same service for trading, maybe because it would be a complex service and dangerous to use, as you are risking your money in a bot system and with the currently technology, the bots aren't so smart like we see in futuristic movies.

BitHodler

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I think that it has to do with the potential bias aspect that people might fear.

In some cases people already suspect exchanges of insider trading, and them offering trading bots as service will only make these suspicions become stronger.

I rather pay someone to develop a unique trading bot backed by a superior algorithm than using one from an exchange.

Or I'll buy a properly coded trading bot from one of the few reputable sellers available. Everything better than making use of what an exchange offers.

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I have used bots some times and some of my friends are addicted to bots, I am just curious about this idea.

Why do not exchanges host the features in their own site as services,
why do they let 3rd party bots run instead of providing the possibilities themselves?

Topic: Why don't exchanges run their own bots? - page 2. (Read 1482 times)