One of the interesting aspects of the game perfectcompetition.net is that it has automated traders, called "bots". The purpose is supposed to be to add liquidity. But one of the issues faced with bots is that they can become a money pump. In the design of real-life markets, there are also automated trading systems; albeit a bit more sophisticated than that found in a game. However, the inherent nature of bot trading is still subject to a money pump problem. I do not believe there is one hard and fast rule for a well designed bot. These are issues faced by people who participate in TAC (Trading Agent Competition). The best strategy of an agent will depend on the strategies being employed by the other traders in the system. The winning strategy of one competition could be a very bad strategy the next. The hope is to hone in on universal principles of trading strategy that continue to both perform well on an absolute basis and produce positive profits, but also on a relative basis, compared to other traders. Heraclitus said you never step in the same river twice. If that idea, that all is flux, that all is change, applies to the quality of trading strategies, then the solution may be a long time in coming. On the bright side, those persons employed in this field of discovery will be sure to have a steady income, right?
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One of the interesting aspects of the game perfectcompetition.net is that it has automated traders, called "bots". The purpose is supposed to be to add liquidity. But one of the issues faced with bots is that they can become a money pump. In the design of real-life markets, there are also automated trading systems; albeit a bit more sophisticated than that found in a game. However, the inherent nature of bot trading is still subject to a money pump problem. I do not believe there is one hard and fast rule for a well designed bot. These are issues faced by people who participate in TAC (Trading Agent Competition). The best strategy of an agent will depend on the strategies being employed by the other traders in the system. The winning strategy of one competition could be a very bad strategy the next. The hope is to hone in on universal principles of trading strategy that continue to both perform well on an absolute basis and produce positive profits, but also on a relative basis, compared to other traders. Heraclitus said you never step in the same river twice. If that idea, that all is flux, that all is change, applies to the quality of trading strategies, then the solution may be a long time in coming. On the bright side, those persons employed in this field of discovery will be sure to have a steady income, right?
The bots have been somewhat correct. No more selling is allowed at a price lower than the highest bid.
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