Quote from: 1Referee on February 26, 2017, 08:58:16 PM

Quote from: deisik on February 26, 2017, 05:45:57 PM

I don't really think that zero fees could somehow contribute to price manipulation

They might (and likely do) contribute to more volume as well as narrowing the spreads, but I can't possibly see how they would make price manipulations easier to perform. If we take 0.2% trade fees as the basis, then at the price of Bitcoin equal to 1,000 dollars per coin, this percentage would amount to just 4 dollars (0.2+0.2=0.4x1000=4). We will just see the spread widening, but that's pretty much all. Manipulations usually happen in the range of dozens (or even hundreds) of dollars, so 4 dollars are actually nothing in this regard. Anyway, I would like to hear your arguments and explanations how zero fees could make them possible

One example is where you make use of the 'stupidity' of bots that will constantly pop up and place orders above your order, which you use to sell into. In that case you can scoop up profits of +0.10% in a matter of seconds. Usually these profits are peanuts, buts since tranding fees don't apply they are a more than welcome bit of profit that just take HFT a second or two at most. Do that x100/500 times a day and you'll be doing extremely well

I might agree to that (though I didn't thoroughly think over that). But this has nothing to do with price manipulation (as it can be associated with low or zero trading fees)

Quote from: 1Referee on February 26, 2017, 08:58:16 PM

Another example is that they have no problems dumping the price down, where they fill up the buy side of the orderbook with mostly their own orders, and dump thousands of coins at once to trigger panic sellers and stop loss orders that will sell into their buy orders. After that they do exactly the opposite and fill the sell side of the orderbook with their own orders, and start buying the price up and have people buy through their sell orders

This doesn't make sense altogether

You seem to be contriving your "examples" on the fly, without doing a proper reality check on them. Really, why would they need to place buy orders if they wanted to bring the price down by instigating panic selling? Simple trading wisdom tells us that panic selling could be more easily triggered when there are in fact less, not more buy orders in place. It is basically the same when manipulators want to trigger panic buying, i.e. cleaning the sell side will make it a lot easier. So why should they ever want to place sell orders? In any case, this has nothing to do with trading fees as such (at least, as long as they remain low, at their current level of 0.1-0.2% per trade). Adding trading fees leads to wider spreads basically equal to their size (doubled) plus profit margins most traders are happy with, but that's pretty much all they do