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Bots vs High Frequency Trading, is there a difference?

    • silent21
      Joined: 08.08.2008 Posts: 1,556
      As we all know, it is illegal to design a computer to play for you in poker. However, it is legal to design a software to trade for you in the market. Can someone who is smarter than me explain why the moral imperative outlawing bots would not apply to computer trading?

      I assume some people will argue that high frequency trading is necessary, fairness/moral issues aside, because it provides liquidity, lower spreads, etc. Is there a way to quantify the benefit the computers supposedly provide vs the idea that u are EV wise always on the losing side of a trade with them? I don't know the real number, but i've heard 70% thrown around as the number of shares traded that HFT is responsible for.

      Maybe the issue is that bots are for the most part illegal because we don't know if we are playing a bot or not? In the market its well known that you are most likely trading against a computer. Does that make it "ok" or more acceptable?

      for those who are unfamiliar, high frequency trading is basically a computer trading in and out of shares on extremely short time frames, 2 seconds, 10 seconds, etc.
  • 8 replies
    • Hahaownedlolz
      Joined: 24.04.2009 Posts: 1,755
      There's no benefit for the poker rooms to allow it really. No one wants to play against robots, that takes all the fun out of it for the fish. If they were allowed and alot of pro's started making and selling them online poker will die really quickly imo, Since most of the players will be robots.

      In a live game would you rather sit with 8 robots on a tabel or 8 humans?
    • Skyscrapers
      Joined: 11.02.2010 Posts: 104
      Poker is more of a sport, for someone to win another has to lose so bots are considered unfair advantage(like in chess), but winning money trading the markets doesn't necessarily mean someone else is going to lose that money as it is in poker, the whole concept is not competition (people vs people) and that's why computers can't be considered harm or unfair.
    • tcs35
      Joined: 31.01.2009 Posts: 3,583
      Did you read the original post? It's not really related to poker.

      Although silent21 I can't really help you
    • NightFrostaSS
      Joined: 25.10.2008 Posts: 5,255
      Trading shouldn't be compared to gaming imo
    • Joronamo
      Joined: 17.10.2008 Posts: 649
      If bots were allowed, where would it end?
    • silent21
      Joined: 08.08.2008 Posts: 1,556
      Originally posted by Joronamo
      If bots were allowed, where would it end?
      Originally posted by TobyCS
      Did you read the original post? It's not really related to poker.
    • Yoghi
      Joined: 10.09.2007 Posts: 14,387
      I think the market has so much more variables and outside things where you can gather your knowledge from that are impossible to put in a bot.
    • andreibalint
      Joined: 11.04.2009 Posts: 872
      Trading shouldn't be compared to gaming imo

      Trading is just about the same thing as playing poker. Same concepts about expectancy, same money management, risk-reward, ROI, problems with comissions (spread/rake) - permanent search of the lower possible.

      Difference is that trading is based on "real" stuff ( economic releases, price, profits, wars, GBP, whatever ) while poker is based on "not-real" stuff (how do some cards come... nothing to do with anything).

      Really good question (first post). I would love to play poker with bots, just download a poker game for your phone and play, you'll find in 2 minutes a flaw in their "thinking" and absolutely crush them.

      Maybe it's because while trading you don't know where you take or to who you give your money exactly (parts are not known), while in poker you know exactly. This sounds "moral" enough for a reason.

      Who knows, maybe poker will get there sometime!

      Deviating a little, it's legal to write an automatic trading program, problem is it's a living hell to write one that works. Basically every combination of the well-known indicators doesn't work (MA, RSI, MACD, etc.). I hope to clear things up since i will write for finishing uni a paper on the rentability of trading systems in forex.

      I think that it's impossible for a simple program to work because if it did someone would have made it already and extracted profits out of the market until it would adjust and started to lose (sounds familiar in poker?).

      That's why i believe the way to go in trading is by discretionary systems, not mechanical ones. (harder to program support and resistance for example).

      There should be a corner for poker players that also trade (or the other way around), i would be very happy to know about your results and way of thinking in general.

      Final though: don't you find that trading is actually more of a gamble than playing poker? What chance do you have to make like 1000 trades to find out what's your expectancy while you trade on D1 or on news???