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

Quote from PuffyGums:

I'd like to know if anyone used game theory to quantify the disadvantage of collusion? Would be an interesting research project.

Knowing the money is there for the stealing, then one must assume that teams are common. The claim that the sites screen for teams must be questioned, knowing how hastily web sites in general are slammed together. Other than some basic, IP-based alert trigger, they are probably doing nothing.

I mean Etrade cant do basic security and fraud detection on the ACH pulls that it gets (if one is to judge from the posts on ET). I don't think that poker sites really have professional, banking level fraud filtering and prevention applications running.
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Party poker is not a small operation, they make net profts of miilions every day (far more than Etrade, lol), and have a team of fraud investigators. I don't think it is a hastily slammed together website .
 
Quote from pipscooper:

I believe that asking the right questions is very important in developing as a trader. One series of questions I asked after I had learned the basics of poker helped me change my paradigm about developing trading systems.

What is the best starting hand in poker? Obviously it is AA. There are numerous statistical studies that prove that pocket aces wins more times than any other starting hand. If you could play a version of poker where you only had to put money in the pot when you had aces, would you have an edge at such a game? If the dealer kept the game going, and the other players didn't know that you only play aces could you win? So the question that really helped me change my paradigm is this: In trading, what is the equivalent of holding pocket aces? Think about that for a while. I hope it starts you down some profitable paths.
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One story to illustrate:

A few months back I was watching GBP during an illiquid time on the overnight session when it was just me and a couple of other small traders, and the computerized market maker programs bidding/offering size. The spread was like 4-5 pips, when a one lot came in to buy one pip below the ask. I hit the bid and immediately everything shifts down, and I am 6 pips in the money. After a minute or two I had a chance to get out by hitting the ask with 9 pips of profit. In reflecting back on that situation it is clear that this was a case where I held aces as my starting hand. The great thing about trading is that you don't have to play those aces to the river in order to get paid off. In this case the market reversed back to where it started and ended up higher, so that early profit was the best opportunity for profit for that trade.
 
Quote from pipscooper:

I would say that most of the time collusion is spotted by other players, reported to the site, investigated and eventually the colluders may or may not be caught. But Puffy is right that the site on its own probably isn't smart enough to track all the players and figure out who is colluding and who is playing normally.

If the same 2-3 players are always in the pot together bidding it up, that is a possible sign of collusion (or of 2-3 maniacs at the same table).
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This may sound weird, but sometimes I look for stuff like this as an opportunity. After all, by definition, when players are colluding there is a lot of dead money in the pot ( the colluding player(s) bidding up the other one when their hand is crap ). This means a well played slow-play of the nuts can result in a huge jackpot.

So I just tighten up to the Rock of Gibraltar level, meaning you are never giving any action except when you have great cards. You play Sklansky-level starting hands. You don't raise your AA or KK hands, since the idiots will raise for you. You play all pairs looking for sets on the flop, you play all nut-flush cards (Axs) looking for flushes or flush draws.

You bail immediately on bad flops. You call good flops for your hand reluctantly as they raise and reraise each other. Then on the river when you get a boat or something locktight like the nut flush or nut straight, you raise the bastards on the end! A couple of hands like that can win a lot of money. I won over $20 on a 0.25-0.50 table just on 2 hands when I got top set which turned into a full house on the river, and landed the nut flush draw on the next hand.

Interestingly, the 3 "colluding players" all immediately fled the table after the second big hand like that :). The other players knew what I was doing, and we all enjoyed a good laugh at their expense.....
 
There are many existing auto trading software systems out there already including offerings from major on-linr brokers. NOTE: The trick is to develop your trading system.
 
Quote from cowpok1027:

There are many existing auto trading software systems out there already including offerings from major on-linr brokers. NOTE: The trick is to develop your trading system.
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many? name three of them please. :confused:
 
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