Bitcoin Forum

So this run up from 18.3 to 19.99 was because by me.  I waited till the overhead in the market was a bunch of small trades than bought a few grand worth of btc all at once:

http://www.thefashionablephilosopher.com/runup.png

On top of that I made a bunch doing it too

I'd love to go back to when we played as kids, but things change and that's the way it is.  :'(

I think the sudden price rise caused people's bots to start buying like crazy

I've seen people doing this ... if you've got a lot of cash you can move the price quite a bit and cash in on it, in one instance I saw someone buy for at least $40,000 which moved the price $5 upward, in current situation it could be moved to $25 this way - but it requires quite some cash which not a lot of people have, to be able do this kind of magic :)

All you have to  do is slowly sell your stash when you know the market is over valued then buy all at once when it's down and there are only small orders overhead.  I thought of buying when there was a bit order to sell 500 at 18.30000, but I figured I'd give everyone a helping hand with their investments instead.  The gain seems to be holding too.  Because I sold high and bought low I made some good money too, while helping the long term investors.

Yes, Bitcoin is a young and small market and, like any young and small market, you can move it if you have enough money. With time and more acceptance this will change and it will be more difficult to move by one person.

Thanks for sharing your insights.

You started the Monday rally a bit early.   :D
Thanks for sharing.

Its also very risky. Especially if you buy up a bunch and lots of people start dumping their bitcoins. Remeber, bitcoin exchange is pure supply and demand.

However, the more interesting concept is this: The markets are moved by greed and fear.

What does this mean? It means if you have the buying power/selling power you can push the markets up and down big time. When people see the price dropping then they get panicked and sell off, "before they lose it all." Meanwhile, when you buy up alot it will push the price up, depending on how fast the price is rising people will start buying, "before their priced out of the market." This leads to speculative booms and busts. It is more pronounced in markets that have low liquidity (ie. bitcoin).

Thats why I say we should have bots that speculate on the price. Ultimately it stops these booms and busts from happening. Depending on how the bot is programmed it will buy xyz bitcoins for xyz price, then instantly put in a sell order for 1$ more than it bought them. If the order executes then the bot places an order for the sell price -1$.

Lets take for example a bot that is set to buy ONLY btc below 14$ and ONLY sell btc when its above 15$. Depending on how much buying/selling power these bots have it can EASILY hold the btc price range between 14-15$/btc. If there is ever a massive sell order, the bots can buy up the btc before it drops below 14$. If there is ever a massive buy order the bots can sell before it goes above 15$. Once again, thats assuming the bots (as a whole) have enough buying/selling power. As a whole, these bots BENEFIT the community because it stabilizes the btc price and gets rid of huge booms and bust cycles. If we have stable prices guess what happens? People can realistically set up businesses with set prices and actually run a real business.

Of course, setting up those bots can be risky with mtgox's .635% fee. Thats why I say mtgox trades should be free and maybe charge like a 1% withdraw fee instead.  

I do not know if trade bots would benefit this fledgling market at this time. This market is not like FOREX,NASDAQ, DOW, or the NIKKEI. Most of the people involved are not professionals or really have a solid grasp on technicals / fundamentals, mostly casual traders. I am a FOREX trader and know that a lot of the tools I use for prediction such as Fibonacci retracements /extensions only work because everyone knows how to use them. They are self fulfilling prophesies. If people are primarily functioning on FUD (fear, uncertainty and doubt) the oscillators will not work. Once the market matures and more people know how to use the technical tools I believe the tools will be more accurate. If you are interested in becoming a serious trader please get proficient with MACD, RSI, SMA's, and of course Fibs.

Peace.

This technique could be used right now to push the price from $21 to $23 just for around 700BTC ... you buy along the way, then wait a little at the $23 threshold and then sell, I think it's a pretty good way to make a decent profit. People are not selling under $23 now, so there is good chance they wouldn't after it rises to $23 ... if I would have the money on hand I would most likely do it, damn it!

Back when the prices were $7 I was able to move the market $1 just by buying 200 coins at the right time. No surprise here

you just have to wait for the right moment.  If I had done it when a 500 btc ask was clogging the line it wouldn't have worked.  Then again, one dark order could have wreck the whole thing too. It wouldn't have been much of a problem, I still would have made money, the market just wouldn't have moved.

Except if people sell off, or buyers never show up at $23.  Then you buy for $23, sell for $19.  Awesome plan!

Not clever enough bots.

Market is quite and right near $20, so you know others will join the party:   :D
Who will be the first and grab the profits?
{"ticker":{"high":24.5,"low":18.1,"vol":59329,"buy":20.15,"sell":20.16,"last":20.16}}

This is interesting.  I wonder what would happen when a hedge fund steps in.

Or ForEx...

Judging by recent real world history:

- Hedge fund buys in
- Market goes up, the proletariat is excited and also profits
- Hedge fund manipulates the market for own gain and greed
- Market crashes, everyone takes a loss
- Hedge fund cries to government and gets a bail out with the proletariat's money
- ...
- Hedge fund buys in...

Sounds like the government is left holding the bag... Poor government... ops... I mean, poor me. :(

It depends on the bots' strategy.  You're thinking of strategies that provide negative feedback and help stabilize the market.  However, if the bots chase momentum, you get positive feedback and booms and busts are more likely.  No doubt strategies of both kinds will be implemented, so the net effect of bots is not clear.

It's also easy to trigger an avalanche.

True. It depends on the style of the bot. My bot is more passive, sit and hold. When the right price its, then sell. The bot you are talking about is more aggressive. When it sees strong upward price movement, then it buys and sells further up.