here are the current features put in place to prevent trading bots, their pros and their cons
Limit order modification timer (5 minutes)
- It prevent bots from modifying their orders until the 5 minutes timer is over.
- It is problematic when the order you submitted had a wrong price or quantity, since you cannot cancel nor modify it before 5 minutes.
- Players reaction time is lower than 5 minutes.
Limit order set-up fee 10%-7.3% Fees ( 5% - 2.3% Broker Fee + 5% Sale Tax = 10%-7.3%) and Limit order modification fee (apologies I didn’t calculate it)
- Bots that place orders get rekt incrementally per order.
- Bots that modify their orders get rekt incrementally per modification.
- Players and Bots are incentivized not to spoof their orders.
- Players that place orders get rekt incrementally per order.
- Players that modify their orders get rekt incrementally per modification.
- Bots still process and react faster than a human to a price change in another region or whatever information that could affect future price.
- Reduce market orderbook liquidity since there is reduced incentive for market makers to provide it. (Which is not a problem for items that are already liquid but doesn’t help with items that don’t already have a lot of volume)
Possible solutions to reduce bot effectiveness while not nerfing players trading experience:
Limit order modification timer 1 seconds + 10 orders per h (this number is completely arbitrary and I don’t think it’s a good or bad one it’s just here for the example)
- It prevent players and bots from modifying their orders until the 1 second timer is over (faster than a human) and it incentivizes them not to spam or spoof their orders since they have a limited number of them.
- Bots still process and react faster than a human to a price change in another region or whatever information that could affects future price.
Reduce the fees ? It’s completely subjective anyway but if you wish to nerf trading bots without nerfing day trading players then I think it’s a good idea to do it.
If your intention is to prevent people to make too much money from day trading then fine I have no problem with it, I just wrote this post in case you didn’t.
Thanks for reading.