Some Things I Learned About Automated Trading Systems From Writing a Poker Bot

Quote from nbates:

Yea, I recall similar gloom & doom from traditional brokers at the onset of self-directed online trading :-)
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umm, well, i suppose one could look at it that way. but it would be a woeful misconstruction of the statement and evidence of having given it no real consideration at all.

but, we'll see, right?
 
I initially got interested in holdem after reading this thread:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=12455

My initial desire was to learn some of the psychological lessons from poker that were similar to trading. After playing on Party Poker in the free rooms for a while and reading a bit on the 2+2 site, I ran upon some discussion of poker bots. As my interest was in automated trading systems I thought it would be interesting to learn more about poker systems, because from my experience the psychology of playing poker and of trading are similar in many ways.

Naturally any discussion on poker bots leads one to the University of Alberta Computer Research Group and poki:

http://games.cs.ualberta.ca/poker/

I read through many of the publications. One of the key messages was that rule based programs were inferior to simulation based programs. At the time I didn't really know what to make of all this but I did know that my intention was to write a rule based system. I did so and started it playing against poki in the online rooms. I had several different iterations of bot but my main goal was to:

Read in my hole cards
Make preflop decisions based on my hole cards
Read in the flop
Make flop decisions based on my hole cards and the flop
etc., to the river

I noticed something peculiar. My bots initially started out at breakeven or slightly better than breakeven for the first few hundred hands. Then after a few thousand hands they started going under water, and after about ten thousand hands they were starting to do almost geometrically worse and worse. What had started off so well ended up rather poorly. My initial premise was that all you need to make a profitable poker bot was to apply a consistent set of rules that had an advantage. I thought that there must be a sort of optimal form of play that if I could describe to my system, would lead to a bot that could beat poki. I soon learned that my original premise was flawed.
 
Quote from easyrider:

Maybe you can explain something to me that I have been wondering about. How do you intercept the supposedly encrypted input from the poker site for your bot to interact with? I know nothing about programming and was wondering if a bot was even possible.
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Like jmmccain stated, you don't have to intercept an encrypted input. You simply read the information that is available on the screen. And the dealer window / hand history is also saved in temporary files on your computer's hard drive that programs like pokertracker read and parse, so the information is readily available. Just about the only obstacle is reading your hole cards (because they are not sent in the dealer window) and that is not too hard to do either. The programming aspect of reading the information in, and pressing the appropriate buttons with the computer program (bot) is the easiest part of the whole process, and virtually any competent programmer should be able to accomplish that part of the project.
 
Quote from 3rdocagt:

Could you please explain what a "bot" is. TY.
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Bot is the slang term (robot) for an automated poker system, a piece of software that plays poker without human intervention. I will use the term "bot" so as to not mix up automated trading system with automated poker system.
 
The CNET Glossary has good "Bot" definition:

bot
robot

At its most general level, a bot is any type of automated software. This covers a pretty wide range of programs, but the term applies specifically to two areas: chat and Web-cataloging software.

In online chat, bots can be annoying. One type of bot, KissServ, hails participants with greetings or other cute messages, presumably to draw them into conversation or make them feel welcome. The fact that such a knee-jerk program is called an "annoybot" testifies to how effective it usually is. More sophisticated "chatterbots," such as the Turing experiment called Julia, are programmed to pass for a real person.

In the world of Web searching, bots are also called spiders and crawlers. They explore the World Wide Web by retrieving a document and following all the hyperlinks in it; then they generate catalogs that can be accessed by search engines. Popular search sites like Alta Vista, Excite, and Lycos use this method.

http://www.cnet.com/Resources/Info/Glossary/Terms/bot.html
 
Quote from nbates:

So, how does it trade - good, bad, still needs more work?
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The poker bot itself doesn't trade, just poker and not that for a few months. I've been thinking of getting it into a new line of work. I think it would do a great job of saying "Welecome to Wal-Mart." What do you think?

My trading systems can effectively be categorized by the movie, "The Good, the Bad, and the Ugly."
 
Cool thread !

Tell me do people actually play and make $$$ using a bot?

I have always thought that only the house would use them to substitute at slow times!

Thanks
 
Quote from pipscooper:

One of the key messages was that rule based programs were inferior to simulation based programs...
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How are you defining "simulation based programs"? Are you referring to adaptive programs?
 
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