Malfunctioning Bitcoin Trader Bot Causes Extremely High Volume on the Bitcoin Exchange BTC-e

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You can find it here. And now we have a new one to add to the list: The chart for this one is a lot more… bullish… than the rest. Take a look for yourself. Why do events like this occur? Gross market inefficiencies like this result from one of:. The Bitfinex glitch is a good example of this — there was an issue that allowed people to buy and sell an infinite quantity of BTC or LTC, regardless of their margin account balance.

This was abused to cause massive disruptions to the market and resulted in margin calls, prompting Bitfinex to halt trading. Bitfinex later attempted to reimburse those who had lost funds as a result of the glitch.

There were complaints about how they handled the event, but the community as a whole was mostly satisfied with their actions. This is what causes the majority of these events — an ethically gray action, or, in the views of some, actively evil. Margin trading is a system employed by financial institutions to allow traders to apply leverage to their trades.

For instance, leverage of 3. This leverage comes with costs, though. First, you must pay interest on the borrowed funds — your trades cost you more. Third, and most importantly for this discussion, you open yourself to the possibility of something called a margin call. This is enforced to prevent the possibility of default by traders.

When it occurs, the exchange forces your account to close your open positions by placing a market order.

A devious individual would recognize here that this means that someone with an immense amount of ability to move the market could cause such an event to occur. By selling or buying a large amount of an asset at once and causing slippagesomeone could cause a margin call to occur. If they do enough, multiple separate traders will all be margin called — moving the market further, and causing more damage, and more margin calls.

This is referred to as a margin call cascade. If you could cause this event to occur, and had placed buy or sell orders as appropriate, you would be able to profit immensely from this — at the direct cost of others. Regardless, this is what caused many of these trading irregularities — someone found a method to make profit, and ab used it.

This occurs at a small scale with some frequency in the altcoin markets. I empathize with them, but, on the un-empathetic side, it is their fault.

I suggest anyone attempting to create or operate a trading bot pay careful attention to events like this. The message is simple: They only do what you tell them to. Your email address will not be published. Check here to Subscribe to notifications for new posts. Gross market inefficiencies like this result from one of: Server-side glitches on behalf of the exchange The Bitfinex glitch is a good example of this — there was an issue that allowed people to buy and sell an infinite quantity of BTC or LTC, regardless of their margin account balance.

Purposeful abuse of margin calls This is what causes the majority of these events — an ethically gray action, or, in the views of some, actively evil. Trading bot malfunctions This occurs at a small scale with some frequency in the altcoin markets. As always, thanks for reading. Leave a Reply Cancel reply Your email address will not be published.

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Questions Tags Users Badges Unanswered. Tagged Questions info newest frequent votes active unanswered. One of the bigger Bitcoin exchanges, the administration of which is Russian.

Learn more… Top users Synonyms. I read that I need to have the exact amount of both? How to handle an old, abandoned Litecoin withdrawal from btc-e. I noticed this website is down by now. How to buy and sell on the 15 minute time frame Hallo I wanna write my first trading bot on python. The bot should buy and sell on the 15 minutes time frame, when the rsi is undersold or oversold.

How i can tell my bot to focus on the 15 minute Their reason was that the supporting documents should be provided for such transaction. Payment details which BTC-E provides do not Is it safe to use a second-hand Trezor like from ebay? I just got a good price from eBay on a supposedly never-used Trezor hardware wallet. I have no specific reason to think this would be dangerous to use, but I'm being cautious and ask here first: Jonathan van Clute 7.

I've seen bitcoin traders arbitrage trade using US I'm running startup and we think how to accept payments. Our customers are far not geeks and they don't know what BTC is. However, I'd prefer to collect BTC on may wallet, This is the current API: What can i do so that i will Do exchanges charge fees from base currency or from counter currency?

I'm building some trading robots for a while already but I keep seing that something is wrong with my end of day balances. My robot does arbitrage across multiple exchanges and I always take into Anybody tried any of these? I notice a few things that I am not sure I understand when I visited btc-e. Ben Muircroft 1 Question about BTC-E fee's I'm looking into trading on btc-e but can't find too much info on the trading fees.

Is there a fee for trading btc in or out? What else is there? Is bitcoin arbitrage profit varies with BTC market price? R 2 Bitcoin Stack Exchange works best with JavaScript enabled.