Bitcoin Forum

Howdy,

I have been in BitCoins for about a month now but I can't help but feel like I am relying too much on blind luck when making my buy/sell orders. What tools and information should I consider in order to increase my chances of success when trading at the BitCoin exchanges?

To be sure, I am very inexperienced; for instance, I have heard that a person should study the volume and market depth although I am not sure I know the difference between depth and volume, at this point. Are there different sources of information that would be worth studying, as well?

Any help would be appreciated. Thank you very much.

There is of course http://en.wikipedia.org/wiki/Technical_analysis . But most of it is just nonsense.

Volume is the total size of trades that have occurred over some period, usually 24hr with bitcoin stuff. Depth refers to the total size of outstanding buy and sell orders.

Why are you buying and selling?

You need to figure out what your edge is, there isn't just free money available to everyone who trades.  

by not playing?

The thing to know about this is that if it was foolproof any simpleton could apply it make vast wealth. Maybe there is some way to profit on average by reading charts, but if people were able and willing to write that way down for you the opportunity would already be gone.

Technical analysis.

An understanding of the charts and technical indicators will make for better trading. IMO I personally use EMAs and bollinger bands along volume to help make my decisions.

Download sierra charts - Google indicators eg Bollinger bandwidth, macd.

Enjoy :)

MACD, Candlesticks, depth, etc... BitcoinCharts is an ok source.

Silly speculator, people only make money in this game when someone else is losing it.  So clearly nobody here would want you to know how to be good at it.

Fundamental analysis.

A good place to start is by not selling lower than you bought them.

Some people on here don't seem to get that one right.

My advice: don't try to "trade" the market. It's pure gambling and you're just as likely to impoverish yourself.

Buying bitcoins and holding them is ENOUGH of a speculative activity as is. If Bitcoin succeeds, and you can get a hold a few hundred of them now, then you'll be well-rewarded. Trading these things daily is a silly distraction, unless you do it purely for fun (and there is legitimate value in that).

Anyone who figures out trading strategies that work will not tell you about them for many obvious reasons. Anyone telling you a trading strategy is probably full of crap, because if it worked reliably they'd milk it 24/7 and wouldn't risk new entrants decreasing their gains.

buy long and create a really awesome bitcoin service that will make more people want to use bitcoin thus increasing the value of the bitcoins you own ;D

Just do what all the trolls and shills here say. Sell when it drops to $12, because it then means it'll proceed to go below $10.

do you mean that if I bought BTC at 30$ I must keep and wait until the price raise again above 30$ ?
This may be or may be not a good strategy...
In general,  trading strategies that prescribes rules of action based on the price you paid are wrong.
The price you paid is the past and you cannot change it. Trading is a bet on the future.
The only things that counts is your prediction about future prices.
The general strategy for trading is this: start with half of your capital in BTCs and half in dollars.
When you feel like it's time to bet on the increase in price of BTC, move some of the capital from dollars to BTCs, viceversa if you want to bet on the decrease of price.
The amount of capital that you move must be proportional to the estimated probabiliy of increase or decrease of the price.
If you you can't tell what the future will be, keep your capital split equally between BTCs and dollars, that is equivalent to not betting.
How you can predict that future price and the probability of it, is another story....

Yes, that is exactly what I mean. I am pretty sure that at *some* point in time, the exchange rate will come above $30 - so it would in my opinion be dumb to sell under that price if you paid $30 for your BTC and want to speculate with it.

Best strategy to win money is to use money you can afford to lose.

This is a good one.

Seriously, all you have to do is sell higher than you buy.  It as simple as that. 

Exactly, or even use services that others have created. circulation creates demand which makes btc more valuable

Increase your money.  If you put say, $100,000USD into your account and start buying, the price will go up.

I find that to be a particularly bad piece of advice.



You're ignoring the fact that I may be long dead before that happens. The price *may* return to $30 at *some* point in time, but my life span is finite, and I'd rather earn some money before my 60s-70s so I can enjoy it from then on.

Thanks for all the good advice, everyone. The bolded portion in particular is something I intend to implement.

Researching technical analysis made me curious, specifically about practical application of Bollinger bands. Let's look at a chart from BitCoin charts:

http://dl.dropbox.com/u/3652019/bands_July_14.png

Things I know about Bollinger bands:
1.) The wider apart the blue lines are, the more volatile the price of BitCoins
2.) When the brown line, (moving average), is above the uppermost blue line, the price is high.
3.) When the brown line falls below the lowermost blue line, the price is low.
4.) One good strategy is to buy when the price touches the lowermost blue band and sell when the price hits the moving average line in the middle.


My question is: what predictive indication does any of this give me about how the prices trending right now? How can I get BitCoins Charts to zoom in and show me a narrower slice of time? Does BitCoins Charts update in real time or do I have to keep clicking the refresh button?

Thank you. All of this has been very informative.

Bump for more knowledge about how to effectively use BitCoin Charts.