Bitcoin Forum

Hi.  I have had some debates with my husband over this.  We have invested several thousand into BTC and he is of the mindset to just "buy and hold." (Unfortunately, we did not purchase them super low.  The average price we paid for them is $120)  I have been trying to convince him that we would be better off trying to sell some, wait for it to drop a little, then we will have the buying power to buy even more if we repeat this a few times.  He thinks we will just get burned and it is better not to play that game.  He said it is like his friends that go to Vegas.  They leave with $2000 then come home with $500 and brag that they won $500, bun in reality they lost $1500.  But I disagree that it is entirely a gamble. I think many of you have seemed to do very will with day trading.  For me, it would be the only way we could increase our small BTC stash since we do not have the money to buy any more. 

So my question is, have many of you successfully increased your BTC numbers day trading?  And what is your best strategy in doing so?

I tend to side with your husband. You risk a lot day trading, not to mention the time and mental energy you're putting into it. Sure, you might make more money, but you also might miss out on a lot of upside by not holding as much bitcoin as you would otherwise be holding when the price goes up.

As with gambling winnings / losses, you will probably hear much more about the gains than the losses in replies on this thread. Not like what your husband says, where people pretend they didn't lose. Just that people tend to tout their winnings, but those that have lost will tend to not post about it, or maybe they're fed up with bitcoin and have left the forums.

You still might want to trade, but only if you really specialize in trading, really know what you're doing, and believe you have an edge that few other traders have.

For most people who trade, the emotional rollercoaster leaks into the rest of their life, too. It's a cost many traders underestimate. If you weren't trading, what else could you be doing with your time and energy? Go learn to dance or something :). Or if you want more coin, do something you're good at or love doing, get paid for it, and then buy more bitcoin. Tuck away some money into bitcoin every month, to dollar-cost-average.

Finally, if bitcoin really takes off, you're not going to care all that much that you got in at $120 instead of $60. Millions divided by two is still millions.

The only active trading that makes sense to me is the case of risk management: if you wish to not "beat the market", but reduce the risk of loss while still making profits. I had taken on this approach for a period of several months, and made 100%-ensured, predictable profits. These profits turn out to be lower than if I held and sold today, but I had essentially zero risk.

Now that I took profits and rewarded myself with real-life goodies, I can keep holding the rest of coins.  I am waiting for good opportunities to spend them directly - and these days are approaching! Also, if I need fiat cash urgently, I'll trade some coins. If I've got extra cash, I'll buy coins. That's it.

Wise advice.  You are probably right.  I have been trying to sell some crap on ebay and fund some more BTC.  It is probably the safest way.  And yes, the $120 could be a drop in the bucket. 

If you can't afford to buy more BTC, then you can't afford to day trade.  One bad decision could wipe you out.

One false move in daytrading wont wipe you out. Au-contrair... If a fast correction to low-price happens then you have more chance of escaping if you are actively trading than just holding, because there is a chance you are in fiat at the time.

But be careful with trading, keep your heart out of the equation, this is difficult when you get the buzz of a win and chase it, while ignoring the losses. it IS just like vegas, and the exchange is the house and it always wins.

I suggest if you do want to try trading then take advantage of the percentage fees, this means you can place small trades. So if you have confidence that you can do a little better than market average (with a little extra for the exchange) you can try turning 0.5 BTC into 0.75 BTC and continue if you do good.

We only invested what we could afford to lose 100% of.  Granted, I like to have a little more liquidity.  However, with hockey playoffs starting maybe it is a good thing that all of our "extra cash" is tied up right now! ;)  Last year we spent WAY too much on Stanley Cup Playoff Tickets!!  I wish I had that cash now to invest in BTC!   :'(

I would have made more money if I just held when I bought low instead of trading.

Honestly screw day trading. I tried it once and I sold my coins at $125 and suddenly it rose up to $138 within minutes. It's really not worth the risk unless you're running a bot or have high amounts of BTC to recover from the loss if you take one.

With a low amount of BTC, it isn't worth it. One slip up can send you on a downward spiral, and you wouldn't be able to recover because the low sum of btc.

I'm with Wardrick, don't do day trading unless you fully understand what you're doing, what I'm doing is working on getting businesses set up that accept Bitcoin instead people are too obsessed with getting rich quick and think because someone else does it they'll automatically be able to do it as well. The best thing in this kind of economy is to make sure that you can make money and then preserve that wealth so that you don't end up screwed when the banks finally collapse.

People who day trade often are either very lucky, got in early or have a much better mindset and technical understanding of the charts and price movements that go on in day trading. It may well be better to put a small percentage towards these people and let them manage for you rather than do it yourself. I went and tried doing day trading in forex for awhile and places like that and I just couldn't wrap my head around the concept so now I'm sticking with what I know best, hammering and bending precious metal and drawing artwork :P.

You really would be better off setting up a business or something that accepts Bitcoin and building up a nice surplus for yourself that can't be stolen by banks.

Depends do you really think you are capable of doing day trading. If you think you are and can educate yourself fast then your entry point (120$) is too high to just sit on them as much as ultrabulls who mined coins in hundreds or thousands or bought them at 5 or 10 would want you to do that as that's what fits their plans.

They'll sell their coins at much lower point and still make huge profit then you are going to do as their initial investment was much lower than yours. There are many of them who can become millionaires if price reach 500 for ex. (many of them even earlier) so you can bet lot of them would be tempted to push sell button at that, or even earlier point. When they are selling, price go down as they sell in big quantities so you are left with even less difference or even in loss. So don't really take anything they say as complete truth, each or almost each word written here is self-interest based ;)

So my advice would be that you try to trade, use small volume on the beginning until you are comfortable enough. If you fail trading with those small volumes then quit. Bitcoin is highly speculative and manipulative commodity, and will be like that in significant future so there is still lot of risk in holding it with such entry point + there are so many ups and downs that give you a chance to even grow your position. Just be prepared for long and hard work as volatility is so big that you can't afford yourself to sleep :)

And on the end - do what you and your husband find to be best thing, don't really listen to me and specially don't listen to "it's gonna be 5000" in May gang. It's your money, not mine or anyone else's, we don't give a damn about it and lot of us will give you advice that is best for our interests, not yours, there are so many scumbags around here and you shoud never, ever take the word of anyone just like that. Nobody won't lift a finger if you lose those couple of grants. Do your own thing after researching all options.

Definitely.. it's much easier to make decision on 1 btc than 100 of them

You're just going to add more variance and in theory, you'll be gambling.

Unless you feel you have some edge/knowledge over the market then you're best off just sticking it for the long term.

Just remember if you're day trading, it's you, a normal human being with little to no finance knowledge and experience versus a plethora of high speed, high frequency bots that have been programmed with highly efficient and thoroughly tested algorithms which will make money regardless of which direction the markets moves due to the various theories and techniques they employ, all of it without the FUD/emotion/greed polluting their thought process.

I day trade along with bots I've programmed each employing a different set of algorithms and the best advice I can give you is to practice on paper first, set aside maybe 50% of your holdings on paper, and gamble with them (yes I said gamble because that is basically what you're doing with you FA/TA to back up your theory, no algorithms or trading strategies, you're basically just flipping coins and calling sides).

Do your 50% on paper, and treat this like it is watch how fast you lose your money... I've seen many day-traders trying to beat the market and all of them getting burned eventually, making money here and there but doing one very poor trade resulting in a net loss of maybe 30-40% of their holdings, completely negating all of their gains, which then puts them on tilt and causes them to trade more aggressively, make greedier calls to regain their old positions, and then they just spiral downward until they hold a measly 20-30% of their original portfolio and realize they just made a bunch of other people rich :)

Most successful traders I've seen on here and in real exchanges like forex or stocks usually have bots assisting them in making calls... I think about 99% of manual day-traders I've seen eventually fall off the grid because they fail miserably and drop out of the market after losing 50%+ of their holdings after making a huge fuss about multiplying their initial investments by 5x+ with a few lucky manual trades.

Not to scare you or anything, when I first started I lost a lot of money, realized how naive I was for even trying to jump into a market full of sharks and expecting to dominate and refined my methods for years with play money before giving it another try and doing modestly well. I should also point out that I had good performance on my stock portfolio with long investments way before I even thought to day-trade.

tl;dr day trade if you want, but if you're going to use your real money and you've never traded before and have no finance knowledge, then use no more than 5-10% of your portfolio, and don't be greedy, don't be scared, and don't listen to other people in making decisions that will have no accountability if things go wrong i.e. board members. (Myself included!)

http://www.jamesaltucher.com/2010/11/8-reasons-not-to-daytrade/

I tend to agree with him. It sounds very attractive to day trade... what if you'd sold on $250 and rebought on $50, you'd have 5-tupled your bitcoin holdings! But in practice tops and bottoms are impossible to call reliably so you'll make a lot of mistakes and that will be frustrating. In addition to that, it is really stressful and takes a lot of time, and it borders on obsessive-compulsive behavior. And, like with online poker, most people lose in the longer run.

If you have to ask this question, definitely dont bother. Buy and hold, its a deflationary currency so theoretically you cant lose by holding.

I subscribe to the theory that there are only two likely long term outcomes: BTC becomes worthless or it becomes ridiculously valuable. Based on that I think buy and hold is a sensible strategy, provided you don't put too much money into it, and day trading isn't.

On the other hand, if everyone hoards their BTC, then it will never be used for real transactions and therefore won't become immensely valuable. If adoption grows, so will the exchange rate and at some point people will wisely start to cash out and adoption can increase even further. I think that if my small stash of BTC ever becomes worth $100k, I will sell 90% of it, if the remainder reaches $100k I will sell 90% of that and so on.

If the amount you've put into Bitcoin is more than you're comfortable holding for a decade or more, then you should sell off some of it until you are comfortable with it. You could time your sales, but I wouldn't buy anything, just try to offload your excess reserves near peaks in the exchange rate. Or even better, use the BTC to pay for goods and services, and maybe choose the timing for that wisely as well.

since when has it been stable enough to daytrade btc?

This.

Don't agree. It's much easier to trade 1 bitcoin and have more free mind to make decision when you are trading something worth 130$ than 13 000$. I'm quite comfortable in trading my few coins as it wouldn't make lot of change for me if I'd lose them all but I doubt I'd think like that if my coins are worth 50k-100k.

Bigger value bring more emotions if you're not pro and emotions often lead to wrong and/or bad timed decisions.

Yeah, it just deflated from $266 to $130, or that was the USD deflating?

If you daytrade, you are daytrading against me. Our algorithms enable us to churn about $100k monthly out of the casino OR increase our BTC denominated holdings by that amount.

I don't mean that you lose the money that I gain. Almost everyone makes money as the price rises this rapidly. But with noob skills, daytrading can only reduce your BTC holdings over time (and in the best case, significantly reduce risk - if you perceive holding USD is less risky than holding BTC).

For most, I suggest buy and hold, and work and earn, to buy and hold more.

Here is my take on it:


You could use rebalancing, which means you always have 50:50 in Bitcoin and USD. It isn't a very useful method for generating money, but makes risk aversity an option.

Basically: Bitcoins rise, you sell, Bitcoins go to valley, you buy. Trying to keep the ratio right.

You could do this with 90% of your Bitcoins. And keep most of these bitcoins in a secure wallet at home, not on the exchanges, if it is there, you WILL tempt yourself.

With the remaining 10%, you trade. See it is a game, where you play with it.

Read this book first though:
http://www.amazon.com/The-Disciplined-Trader-Developing-Attitudes/dp/0132157578/ref=sr_1_1?ie=UTF8&qid=1367153859&sr=8-1&keywords=the+disciplined+trader (http://www.amazon.com/The-Disciplined-Trader-Developing-Attitudes/dp/0132157578/ref=sr_1_1?ie=UTF8&qid=1367153859&sr=8-1&keywords=the+disciplined+trader)

This book does not give you any technique for daytrading or trading in general. It largely takes on the psychological side.
You see, I know my share of traders and investment bankers.

I am a psychologist by trade and we have usually worked with them on only one thing: Their attitude, their psychology.

Trading is partly about technical knowledge. But the psychology is more important, because you need to know when to act and stop doing things that you know are stupid. And you WILL do them.

I talked to an investment banker involved in complex derivative trading from the London City trading floors some time ago and asked him:

"How do you do it? Stay cool, when you hit a button and it just might blow a billion? With your managing director ready to send you off in no time and even sue you if things fuck up?"

His answer might be something to ponder:

"Because it is NOT MY MONEY. I don't give a fuck. We all don't. Our bonuses are paid by the bank, the customers leave their money here and they want to see results. So we don't give a fuck. If this was my money in the bank, MAN, I would piss my pants every time I send a trade. I'd get a heart attack when I turn 40 my friend. You see, I don't play with my money, I play with the money of others, that makes things easy."

Another friend of mine that is successful with daytrading, however with Forex, not derivatives, said the following being asked the same question:

"I just love the rush. I do the calculations, I do the technical things, I do my analysis. But then, when it comes to commit, that is like a fucking bungee jump. Im not gonna do this anymore when im 40, im gonna retire. But man, I love this thrill. But you gotta be able to be both: Do your calc, be really cold hearted, smart thinking and then just go nuts, go wild and go risky without looking back once you made your decision. And this is what is so stressful, you go from being the math nerd to being a crazed mofo sending off his whole fortune into the limbo of currency exchanges..."


So, the people who are doing this, largely have a trading mindset. Whatever their strategy is, they usually program some of it. I have seen guys do trading bots because they said hitting the button themselves every time is gonna make their heart blow once they hit 35 :D



Is this something you want to be in? If yes, read the book first. If you still want to be in there, get yourself info on really basic analysis charts and basic math. Play around with maybe litecoin or namecoin, something that isn't worth that much but could hurt a little when you loose it, to keep you in the feeling of "i lost money" when you fuck up.

Another thing to ponder: You will loose money sometimes even if you make the right decisions. I am not sure if you ever played poker a little more seriously before. Playing poker, you have a closed system of probabilities you can work with. You can, at every point in time, do math that will tell you the expected value of your next move. You might have gone with two aces on the flop. Probability tells you that you will win 80% of the hands. You raise, someone checks the raise and here comes the flop with two kings and a 2. You barrel another opening into the pot on the flop and the other guy just raises you with three times the amount. You have an 80% chance of winning before. The chance that the guy has the other king is now 2/48 and he might beat you with a 22 pair also. Are you willing to bet on that? Are you willing to put 10k in the pot?

A poker player does this and he looses in a lot of cases. And although he looses, he will gladly do it again, because he was right. Because the numbers will add up.

Trading is less deterministic, your systems will be more voodoo than most poker strategies and you will loose money even if you were right.

Can you stomach that? If yes, go for it. I got into the whole bitcoin thing because my trader friends told me that it is real fun, considering that the order fees are so small, that you can profit with minimal wins. He also said that the market manipulation by bigtime capital holders going on for BTC-E and Gox is so funny, because if it were done on an exchange, they would be gone for insider trading. In Cryptocurrencies, this is all allowed. And fun, if you can stomach it. If not, hold it and stay conservative. This isn't for everyone and you risk loosing EVERYTHING.

I seems some of you are very smart about it!  I am not sure I am that smart.  It seems more complicated than at first glance and I think the very successful one are like Schrankwand and have a methodical approach.

I did try day trading yesterday with just a few bucks.  I came out ahead with a little more BTC than when I started.  I think our best strategy will be to leave the bulk of BTC untouched and secure and then I can just play with a little for the fun of it.  I wish Bitfloor was still out there.  They would pay a small fee when a bid was accepted.  Mtgox charges a fee and that eats up any profit on small increments so it does not really make it worth while unless you can sell high, hope the market goes down and by low.  I wonder what the sweet spot is for actually making profit doing this on Mtgox?  I would think it is at least a $2 difference in price but I am not sure.  I could probably try to calculate it but math was never my favorite subject. ;)

Great post--it should be stickied somewhere

But it should have a disclaimer that I, at this moment in time, suck at trading. I just happen to hang around some traders and they pay me for business and life coaching.

Just for kicks I analyzed what would happen if you started with $100 2 years ago and rebalanced daily. The price was $3.5 then, which would give you 15.344 btc after 0.5% fees. Today you would have $478.80 and 3.546 BTC, for a total value of $957.60. If you kept the $50 and equivalent BTCs the total value would be $2121, which includes about $40 in saved fees.

So what's your strategy? I didn't think it was possible to hedge/do risk management with bitcoins, but maybe I'm wrong.

There is certainly a case to be made for trading, and more so for arbitraging across exchanges.

But the deal breaker for me, is that you are forced to leave funds and BTC on deposit on the exchanges to pursue any trading strategy.  None of the exchanges offers proof that they are not short BTC on a day to day (or even monthly!) basis.  Many exchanges have turned out to actually be short BTC and gone bankrupt leaving their depositors holding the bag.

Until they prove differently, I assume all exchanges are using deposited BTC to fund their operations.  

Thanks, good to know.  As I thought in a backtest it would eat up a ton of profits for felt security. But this is exactly what i mean. It isn't really a very good money to maximize returns, it only lightens your returns and risk if the asset you invest in blows up. Like lets say a crash from 130 to 3 dollars...

It works particularly well with a fixed combination of Exchange traded funds and governments bonds, where you never sell before you retire. You just rebalance the ratio of index funds to government bonds to keep it steady, buying low what lost in value.

I only see it's profitable when price crashes on gox, and even you time it right, yet probably not everytime, the profit is probably not 50x of investment like speculating on those alt-coins. LTC was 0.0022btc a few months back and now it has 10 times+ more value, and if it catches up with the 1/4 btc value (which is the upper limit resource-scarcity-wised. ), you'll be up like 100times by hoarding LTC since that time. I don't see how one could day trade btc on gox and get 10x profit in 3 months, especially when trading fee is in percentage.

I agree with this person's post.

Daytrading/swing trading is gambling.  And the house odds are stacked against you with the biggest variable... you!  It's too easy to be impulsive manually trading.  Sheesh, just a few weeks ago, I bought at 90 per BTC, it dropped to 70 for what seemed like eternity (but really only a few days).  I sold that purchase above 90, but not by much.  Hindsight is always 20-20 and hindsight clouds your future vision.  I think crypto currencies give all of us opportunities to make money...  but you have to be smart about it.

For me, I mine, earn, keep, and hope it continues to climb.  If not, I'm only out some hardware/power $$...  Otherwise, buy and hold and give yourself a sell price to watch for to sell and reap the profits. 

I do that (Sell at X and try to buy back lower.) Sometimes it works, sometimes the price goes up and gets away from you... Either strategy is gambling.

The bottom line is it's a gamble every time you buy or sell Bitcoins, the markets truly unpredictable. You can't make those kind of risks when you're dealing with a low amount of cash. You could end up rich, or you could end up broke. But there's a much easier place called The Casino that you can do that. The only way I would day trade is with Bots and if I had a lot of money to work with. It just isn't worth the risk especially with a couple BTC you would only be making a few $$ off of every buy and sell.

It's all about proper money management. One trade can wipe you out if you placed 100% of your trading capital into the trade.

There is also "death by a thousand cuts", where even if you practice solid money management, your strategy just does not work and you "go broke" slowly, over many loosing trades.

I disagree with most here.  Bitcoins were MADE for day trading.  The huge swings in price daily makes it hard NOT to make money. Most of my invesments are "buy and hold" or dividend income stocks on the TSX. They see an average swing of maybe 0.05% oer day of value. Bitcoin, at least on Mtgox swing HUGE...like 5-10%...EASY. That to me screams volatility and not "long-term investment". Day trade that mo-fo and profit on the swings...not the overall value in 20 years.

Its not about the "couple of dollars" its about the total Return on Investment (ROI). If you are playing a small amount and getting 30-40% returns, that is better than anywhere else. GIC's, HISA, and even some blu-chip stocks are only going to give you 2-4% return ANNUALLY. If you can net even 10% returns over a year's time in your Mtgox account, you are coming out ahead of not only all the major indexes, but also most of the world's money managers.

Yes, this.

If Forex did not exist I would trade BTC.  Its not rocket science to capture a couple percent here and there all day long and make an insane amount of money with BTC.

It trades in a nice wide range with various bands.  The outer band is 50-250.  Then 100-200, and on and on.  Sell at the top of a band when signals confirm, buy on the bounce off the bottom.

Yawn....

If you are almost always all in bitcoins (generally smart, as they appreciate in value so rapidly), you can with a small stash try the flashcrash strategy - sell into the flashcrash and buy back in 1-60 minutes at a few % cheaper. This will make you gain more bitcoins every time when executed properly.

Do this when it was overextended to the upside, so that if you blow it, you can forget about chasing the price (which would net a loss), and set an incrementally rising wall at below your price target (which in all likelihood will net you a partial profit, if not, then bitcoin has gone to the moon and stayed there, which makes your remaining bitcoins infinitely valuable and useless, since everybody has more money than he ever needs).

Congrats to your husband, a real investors, who buy to hold and wait it's value to rise.

Everybody should do this, but you have the "greedy speculator show" where a 5% of guys takes the money of the other 95% on daytrading.
Of course you can make money in this way, but you must be on the 5% "smartest" side; and be sure that you can take advantage of 15 years old guys trading for fun; but not from business men who really knows how to manipulate and control the market taking profit.


Anyway, if you still want to "try for fun", then I recommend BTC-e, send them half a bitcoin, and you can play echanging it for litecoin, PPC, TRC, or USD. You have much more options than MtGox. Vircurex is good but less volume, and Cryptonite is horrible because it uses g00gle auth to withdraw, making g00gle aware you are using cryptocurrencies.

Exactly.  Imagine when the REAL money guys get a hold of this stuff.  Right now, its almost too easy just due to the people involved.

I've only tried it a couple of times, and I tend to lose.

Most recently I sold at $95 and bought back at $90 for a small profit.

I decided to try it again, sold at $95 again, and then the price went to $120-$140 and hasn't come back down.  So now I can either buy back in at $145 or hold the dollars and wait for the next dip.  But currently the small profit I made on the first trade is totally obscured by the mistake of re-selling just before the price shot up a week or two ago.

That wasn't my point. You make a few dollars every time you flip the BTC. You won't care about ROI when you lose your entire investment because bitcoins drop 20% instead of jumping 20%. It's not even an investment it's gambling. With stocks you at least can have some idea what's going to happen with them, there is no long-term or even short term pattern with Bitcoins. The only way I would take day trading seriously is if I had a bot and 20+ Bitcoins to trade with, and even then it's going to be hard to combat a loss if they drop suddenly.


I personally will probably never buy a Bitcoin over $120, unless I trade for them. To much risk of it dropping like it always does. Even though it usually re-rises but I'm not looking to wait in some cases weeks to turn a profit, if any.

The vig charged by the exchanges makes it very likely that it is the exchanges which enjoy the bulk of the profits from day trading.  There are certainly people who do this successfully out there, and with the general trend toward the price going up sharply from time to time, there's probably profit to spread around.

However, the exchanges have a bad record of going down completely during flash crashes, or have periods where people are basically trading blind.

Until this becomes more stable, this is basically gambling.  It's a kind of gambling where the skilled trader has an advantage, probably, but you're gambling on more than the price.  You're gambling that you will be able to sell or buy even if you actually do know what direction the market is going, because the infrastructure, even "trusted" sites like Gox, is very unreliable.  It may go down exactly when you need it to work, leaving you stuck with a mountain of overpriced coin and needing to wait possibly months for it to get back to where you can turn a profit.

I don't think anyone who isn't a fool is risking amounts that would wipe them out and render their investment entirely worthless.  However, you may very well end up underwater for a lengthy period of time if you zig when you should have zagged.

As with all forms of gambling, don't "invest" anything in this way you can't afford to lose.  I still think, though, the worst that is likely to happen is you are knocked out of the game for a while and have to wait for the price to come back around.

No, you only "lose your entire investment" when Bitcoins drop to $0.  Do you see that happening?  And a loss doesn't actually happen until you sell.  So what if Bitcoin drops $25 in one day when it gains $45 two days later? A paper loss doesn't mean squat. I have dividend stocks that posted loss after loss for 12 straight months....I didn't panic because 1) I was getting dividends and 2) the business model was sound and the stocks eventually rebounded.

If you're the type that freaks out over a 48-hour period, then NO stock trading is good for you.

Obviously that was a figure of speech. I don't panic but if I am up 30% in profit and Bitcoins start to drop I'll sell them and take 10-20% profit instead of waiting for them to drop into the negative profit margin. I'm saying with low amounts of cash it's not worth day trading, because one mistake will mess up your whole business plan. You need more funds to recover from losses once they happen, because they will happen.

IF you are daytrading, it does not matter what price you have right now. The only thing that interests you is that the price moves, how far it moves and what signals tend to describe the movement.

Seriously, doesn't matter if it is 140 now and you sold at 95. Lets say you buy in at 133 and sell at 136 with 10BTC in your stock. Thats a 2.2% win right there. Minus 0.6 or 0.2% fees for each transaction. Now let us take this further, if you are at Gox or BTC-E you can carry out orders in ranges that are either just above 0.2 or 0.6%. That means that a buy and sell decision needs to net you more than 0.4% at BTC-E or more than 1.2% at GOX to make a winner. Now look how this market moves all day, and think about it: YOu only need to win 0,1% per trade and with 10 decisions a day, make 7 right ones and have about 0,7% in profits.

Add that up, because it is cumulative, if you do this. Lets say you trade 200 days and have all the time 0.7% profits a day, completely investing all the money you made back in there. 200 days would mean you quadruple the set money.

Right now this is still possible. The bots, that you see, are still in infancy. 1 billion market cap is interesting, but not interesting for major players. The day some crazy guy gets himself a few traders from the London circuit, sets up an investment fund selling 100 million in shares and lets loose on the Cryptocurrency world, this is going to go south.

Last night, a trader manipulated the LTC/USD market all by himself, moving sell walls and buy walls, crushing the value of the Litecoin from 4,18 down to 3,95. He moved a 0,5 million dollar sell wall further and further down, set his buy orders and let wall vanish. Instant profits.
Everyone who bet on the buy orders going down instantly won too, anyone who panic sold (Ridiculously many people) were burned.

So, it really does not matter if you cashed out at 90-95. It does not even matter what course the bitcoin takes. What does matter for a daytrader ios that there is constant movement that can be exploited.

EXACTLY.  Its not the price that matters...its the MOVEMENT in price. And getting 0.5-0.7% return on ANY investment per day is unreal.

Don't do it unless you are basically a professional or similar standard of experience, self-control and intelligence.

Trading is a zero-sum game and you need to be smarter and more self-controlled than the aggregate of the rest of the participants.

Perhaps I wasn't clear.. but I meant 'day-trade to make gains'  as the first risky strategy, and buy and hold as the other risky strategy. Both are gambling.

Exactly.  Buying and holding an unknown commodity/currency is VERY risky.  And IMO, more risky than day trading it.

I'm not sure what the reasoning on this is with Bitcoin.  What's going to cause it to go down long-term unless something actually breaks the entire technology?  If you know much about the technology involved, you know that's very, very unlikely to occur.

Your husband is right.  Nobody does well with day trading.

A winning trade is actually to your detriment because then you think you have a way to make money.  You keep at it till you lose and you end up losing more than you bet.  This happens to everyone.  It happened to me.

Bitcoin is not a safe bet.  Trading it makes it a guaranteed loss.


On the positive side.  Spouses can be very lucrative.  My wife made me sell several hundred bitcoins at about $250 each.  I paid off my daughter's student loans with that.  I made far more money working with my wife than I ever would have made trying to trade.  Then again even this was not easy.  We bought those bitcoins at about $20 way back in June of 2011.  We sat on a huge loss for over 18 months.  Then, almost without our noticing it, the price bounced into the hundreds, I finally agreed to sell when I could not think of any reason whatsoever for the world to throw so much money at bitcoins day after day.

Saying "nobody" is kind of an exaggeration.  But okay, not much of one.  Successful day traders are pretty rare. 

I think a much more sensible investment strategy is to hold in the middle or long-term, and sell at a good price point.  Where "day trading" might come in is if you manage to sell at the high and the price crashes.  Then it is a good idea to buy back in at the bottom and, again, hold for a while.  This is partly my personal preference, because I just don't have time to sit around all day watching the ticker.

Also, the exchanges all seem to have serious stability problems during high volume trading, something that will have to be fixed.

I believe once you count the exchange fees, trading is actually a negative-sum game.

It's only zero-sum if you consider the exchanges a "player" in the game.  I don't.  I consider them a house taking their rake.

You should learn to listen to your husband.

Avoid day trading. I am 10 btc poorer from day trading

Simple solution: split the money in two. You control one half, he controls the other. The one who wins the most gets to tease the other one afterwards  ;)

I don't trade BTC, but I do trade stocks. When I got into a few years ago, I read up on day-trading, long-term trends, market psychology, etc. I came to conclude that day-trading is much too risky. I assume that if I trade properly, I might get at least 10% ROI over a long period of time. By day-trading, I am putting much more on the line and I will greatly lose profits. Not worth it to compete against computers.

I say hold it. I also suggest you set an escape price or sell price at which you are comfortable. People who double down usually lose much more. And the more lemmings that sell off, the greater the price will fall. Might want to check out some books on market psychology to see the stupid things we do.

In general, if you have to ask, then no.

Having traded for over a decade on the (real) markets though, I will say that the cryptocurrency markets are more similar to the pre-2000 markets during the Internet bubble than today's algo-controlled markets. Much more directional, less (relative) churning, etc. It's a refreshing change of pace from the stock markets of today where robots fight over fractions of a penny and ignore everything else (in fact, "noise" is actually a weapon used by Wall street firms to confuse other firms), in part because exchanges that exist today suck too much for millsecond-trading platforms to possibly function at all.

Here's a nice picture of the crap the modern-day (human) traders have to deal with. Glad I'm no longer daytrading. http://www.metamute.org/editorial/articles/destructive-destruction-ecological-study-high-frequency-trading http://www.zerohedge.com/news/charting-unprecedented-hft-driven-rise-intraday-trading-volatility

This has been a pet peeve topic of mine and you are ABSOLUTELY RIGHT that it's dumb to just buy and hold if you don't have to.  If you are able to sit and watch the market at any time, it is just a really BAD strategy to just hold no matter what.  Risk and reward changes by the second and sometimes it's obvious you should sell (or buy back).

The most glaring example is the bubble run up to $230.  It peaked and then slowly dropped from there over many hours and if you were sitting there watching it, it would be crazy not to sell. It pretty much dropped in a straight line down over $100 in value. 

Of course if you sell at $200 and buy back at $50, then you end up with 4x as many BTC in the end.  And even if you can't time it perfectly you could easily doubled your position.

Some people say when BTC is $1000, it won't matter what you bought at but of course that is absurd.  IF you end up with 10x as much, it matters and also every dollar counts to some people.

Anyway I would start off by daytrading a small part of your position...say 10 or 20%.  Show your hubby that you can can grow it and also reduce risk and maybe he will go along with the plan.

I suggest you study the basics of technical analysis and charting...just the very basic will do wonders.  Good luck.

Post. Of. The. Thread.  +1

This is sort of like saying if you're the best poker player in the world, you should never turn down an option to play against the worst for your whole bankroll.  Most people aren't that person, though, and even the best get unlucky.

Yes, there are good day traders, just as there are good poker players, and some of these consistently make a profit.  However, when you're basically betting on hour-to-hour price shifts, and frequently buying and selling, you don't just have to beat the market.  You have to beat the combined transaction fees from the exchanges as well.  You don't just have to be better than the market, you have to be better than the market plus a constant stream of transaction fees.

This is basically the definition of a negative-sum game.  While those who make infrequent but large transactions also pay fees, they are basically negligible in comparison to the size of the transaction.  When you day trade, this overhead or "rake" becomes exorbitant.  While you only have to be reasonably intelligent to make money in the mid-term or long-term dealing in Bitcoin, which is likely to increase in value for the foreseeable future, you have to be way ahead of the curve to expect to profit as a day-trader.

I sold out some at $170 or so, when the price was spiking, and felt mildly foolish when it went to $266.  But if I'd waited for the peak, I probably wouldn't have even been able to sell when it started crashing, because most of the exchanges suspended trading or were simply too incompetent to maintain their operations with heavy trading (MtGox I'm looking at you).  There was a frenzy of panicked idiots basically trading blind with no reliable ticker value for the commodity.

Note, this is a problem you don't even see in normal day trading, but has happened during both major bubbles because the idiots running the exchanges are basically amateur hour assholes. 

I think in the current situation, being very cautious is better than trying to eke out every last cent of expected value, unless you are the best of the best at day-trading (with BTC this can basically be hour-trading or even minute-trading).  The vast majority of people aren't.

Those who are here and asking for advice almost certainly aren't.  If they were, they wouldn't even care about our opinions.

You are correct.

He is not correct, because if you want to count everything you have to count the people using the exchanges not for day trading, but just as exchanges, which is another flow (in and out) of money.

Well, I would say that the best poker player will often turn that down, considering that the other guy likely does not have any bankroll at all. And then again, using your whole bankroll... apart from a few maniacs, who would agree to that? The crazy australian and the swedish guy that dominates Omaha, those are the only two i could think of...




Which reminds me, I think I should get a few programmers and lawyers together for a group and run a startup that creates an exchange...



That is the actual beauty. The in and outflow makes for most of the fun. Day Traders against each other is a war, but the money coming in from the outside is what makes the game interesting.

What about running simulated trades for a day, a week, a month?

It's pretty common advice for anyone entering trading to work on a demo account for a few months before moving to live trading. There are real differences in psychology between a simulated trade and a live trade, but practicing your analysis and evaluating the quality of your decisions with 0 risk seems like a no-brainer.

Here is an article on setting up a forex trading journal: http://www.learntotradethemarket.com/forex-trading-tools/a-forex-trading-journal-to-track-your-trading-performance

Hope this helps. This is a great conversation.

I would have another suggestion: Buying a small amount of alt coins.

It is the feeling of "real" money, when playing the LTC/USD or NMC/BTC pair, but you can get in with a substantially low amount of money. I personally started with one litecoin.

I have learnt in poker that even having 4$ on the table in 0.01/0.02 on the table have been vastly different in terms of psychology. I dominated play money and lost my whole bankroll of 50$ within 2-3 weeks when I started out. People get greedy with the tiniest amount ;)

We were thinking of buying some Litcoins.  We are supposed to be getting a small amount of money back from the Bitfloor account because they closed suddenly.  Have not seen it yet.  Sigh.  Hopefully they follow through.  If they do, it will go straight to LTC.   Knowing our luck, it will be after MtGox adds it and the price will skyrocket before we get in. ;)  Oh well.  We really don't have much cash laying around right now. and it is painful to throw more money in, especially when BTC has been on a wild ride this past month. Granted we could sell BTC but husband wants to buy and hold, as I stated before.

Also, I tried day trading just $20 or so and did not make anything.  In fact, I lost a buck or two.  It is not as easy as it sounds at first glance.  Especially when I accidently put a sell order instead of an ask order on MtGox.  Trading is not for blonds.  ;)  Should I tell husband he was right?  He LOVES it when I say that.   :P

Which, of course, I did.


Using the exchanges just as exchanges, you only pay transaction fees on that exchange, not as in day trading, where you pay the fees again and again and again any time you make a trade, generally in the same commodity.  So instead of only paying fees once or twice, when you cash in or out, you're paying them repeatedly.  This can be hundreds of times in a year, especially if your basic strategy is trying to profit on very short-term trends, which in Bitcoin are often hour-by-hour or even minute-by-minute.

Well doesn't hurt to Dollar cost average it for example I was pondering selling at 130 my base is 90 now its dropping back to 100 but thinking back could have bought in at a lower price and then bought out at that higher price a few days back
But I valued my day trading potential gains in total bitcoins over buying at a lower price so it really depends on your preferences.
I don't really plan on selling either so I prefer making day trades.
A Weaker currency means more bitcoins to buy the same thing means deflation helps in the appreciation of net bitcoins if the currency appreciates again you have more bitcoins than before, but selling out for a profit is never a bad idea either my strategy is more risky if the price does not re-appreciate quickly and keeps dropping then my price is high compared to when i bought it. So really depends on your risk tolerance and investment horizon my two cents

i have increased my BTC holdings by 100% since i first bought litecoins earlier this year. 

my suggestion is to focus on trading alt currencies such as LTC, FTC.  convert a certain percentage of your BTC and diversify, that way you will continue to gain if LTC goes up and BTC goes down, etc. 

With the current volatility in the Bitcoin market, making profits in short-term trading is as easy as taking candy from a baby. 

A word of advice to anyone contemplating short-term trading is to try and forget about making simultaneous profits from long-term investment holding the coins, as the two strategies are generally mutually exclusive, the psychology one will interfere in the strategy needed for the other.

If you're good at it, yes.  But for every time someone takes candy from a baby, there's the baby getting the candy taken.  Those are the Greater Fools who bought in at $250, who suck at short-term trading.

Don't be the baby in the equation.

It's not just technology that is a risk, there are also a number of other unknowns with Bitcoin.

Government and banking regulations for one.  Competition from other cryptocurrencies - including currencies and systems that havent yet appeared on the scene. Some could potentially have large backers.

Where would this this leave the Bitcoin market? No one knows for sure.

One wrong move and you could be waiting for that drop that will never come and you will be left watching bitcoin increase all the while knowing that as it increases, you're loosing money. There is then the mental challenge of either cut your loss or wait for a drop. I did try trading back at ~$18 and lost over $1k (which is a lot to me). I sold and put a by order in which never came.

thing is how do you know what is the peak and what is the trough position. Easy when it's history, but in real time it's not so clear.

I guess you could recognize a bubble in the March/April appreciation of Bitcoin, but you still have to sell and buy back at the right time, or near enough.

And if you are day trading, you have to have iron determination NOT to re-enter the market when it's still overvalued.

From a community perspective, it's better to use bitcoins than to hoard them.

To win at day trading you need to either have an edge or to be lucky.

For it to be worth the time is even harder.

To trade technicals a bot will help.

To trade news you'll need to analyse better than the average person.

The best way to get more btc is offer a good or service for them.

I'm on record since november saying btc is on it's way to 1000.  I'm starting to lean towards a 10,000 price target.  But this will only happen if the currency is a living one.

It will be $250.00 by June just be patient.

 ;D  I so hope you are right!  I keep thinking it should move that direction. 

The question then is do we sell half our stash and then keep the other half and then have no money risked in our BTC?  Then if it drops again buy more?  That is what we are considering.  The only thing I don't like about that is that we end up with less BTC and if it does skyrocket, we will be upset with ourselves for doing that.  It is hard to decide.

Just take the money you can afford to lose, send it to an exchange and set your bids. Use that money to buy more coins when it's cheaper, less coins when it's more expensive.

Do not sell coins, one mistake and you end with less BTC - that's not how you win this game. Just hold on them, and let's see where we are in x years.

Just don't put money you cannot afford to loose, its too risky and you know it so you will end making mistakes driven by emotions.

Another thing you can do is sell on ebay, plenty of people will pay $1.00 for 0.001 (11 cents) Bitcoin all day long.

I have an ebay copyrighted selling logo, if you would like to use it. I will give you rights. I will change my avatar so you can see it.

That is worth a thought.  :)  I guess people are willing to pay more because they do not know how to get them otherwise?  It can be tricky getting funds into Mtgox.

I do daytrading I never lost once. My technique never sell if you gonna lose. Only sell if you make profits. Just wait for the proper time. I made 20 times my investment in just 3 months.

Wow!  Impressive!  It is hard not to get nervous when prices start moving up after I have sold BTC so I find I want to just jump back in even if it is at a small loss.  Do you just wait it out till it comes back down?  I assume it just takes patience then.

I chop up bit coins like cocaine and sling them on ebay, lol! they sell like hot cakes!

Exactly.  How CAN you lose when you day trade, unless you bought at $260? Buy it at one price, do not sell it (or dollar-cost-average) until it reaches a price HIGHER.  How is that hard?  Even if its only a $1.20 higher, that is ONE PERCENT gain....in like one or two days. In the REAL markets, you are doing great if you hit 7-9% gains for the YEAR.

I don't know where this thread went as I didn't read it, but an important note to remember is this..


If you start with $2000 don't expect to make $200 a day. Just remember on a good day if you make 1% or $20 you can lose a weeks worth of profit in 1 bad trade.

Or you just hold and wait it out worse to run out unless your certain it won't be back anytime soon

Depends on what you consider loosing. Almost nobody looses fiat with Bitcoin. It was at $14 at the beginning of this year. It was at $2 two years ago. If you invested for the first time ever in the last month and a half, maybe you lost some fiat. Otherwise, is just impossible.

That said, daytrade Bitcoin on a regular basis and you will very likely end with LESS Bitcoins you had at the beginning. Yes, you will have more fiat on your Gox account - but if you are not increasing your fiat AND your Bitcoin stash you are loosing big time in my book. At the end, you win this game with more BTC, thinking you are a great day trader just because you earn fiat with a commodity that went x10 in 4 months is just delusional.

I read a lot of newbies saying that is impossible to loose day trading Bitcoin. That reaping up profits is easy as taking a candy from a baby. The ones saying that are just delusional fools. Trading is a zero-sum game - you win the BTC somebody has lost. The ones saying that, are just clueless guys looking their fiat growing at Gox, and they are saying: "wow, I'm a smart-ass trader!". But they know shit. They are loosing BTC in the long term almost for sure, otherwise they won't say something that stupid. And remember you are fighting bots and automated algorithms.

Bitchick: if you want to win this game, forget about selling BTC to buy them back lower. Calling tops and bottoms seems easy - you will get it right ten times in a row, and the 11th time you will make a mistake, price will go up when you expected it to go down, you will wait for the correction a little longer, the correction will not come as you expected, and you will end up with less BTC than you had at the very beginning. You may end up with A LOT less BTC that you had at the beginning. Sure, at first sight your fiat winning will seem untouched and growing, because BTC will still be going up - but you will be loosing.

Repeating this does not necessarily make things truer.

There are many thinkable scenarios, where you would only be able to argue opportunity cost, not real cost, that has been incurred on the loosing side.

Such as you buying something at 100 after a rally from 80, then selling at 120 to someone who just wants to exchange to buy something. Technically, no one here has lost anything. You might argue the seller has lost 20 bucks, but those were opportunity costs.

The majority of people will end up with less BTC than he started with when daytrading Bitcoin. I think you will agree on that.

Yes I do. What I mean is that the zero sum game always assumes a more or less semi-open system. But people like me, who sometimes simply pay to convert USD to BTC to pay for somethign, or the other way round, aren't necessarily included.
Also several people "sharing" a rally aren't really included.

That does not mean anyone should go crazy daytrading now, since the chance of burning yourself is pretty much there.

You can use day trading to stabilize your position if you already have bitcoins. 
Say you have 100 BTC and they are worth $100 each.
Sell 20 BTC to keep cash in your trading account for the SOLE PURPOSE of re-buying if the price drops.
Then when it crashes again and you purchase 20 cheaper bitcoins, you have successfully "revived" 20% of the loss you would have had if you were only holding bitcoins.
The icing on the cake: If it ever goes back up to $100, you will be UP.

The only way you can lose with this strategy is if the price keeps going UP after you sell 20 BTC and never comes back down.
Oh well, your 80 BTC shot up in the meanwhile so you're still up.

It's really a win-win situation if you have bitcoins sitting around anyway.

haha basically this.

you should just have cash parked into the exchanges (Mt. gox, for cash) with a limit order at a favorable price.