Bitcoin Forum

Hello, I started trading yesterday, I purchased 1 bitcoin from localbitcoins @ $325 and sent it to btc-e, I was waiting for an increase in market capitalization, given that the bitcoin went so high this last week, and I was expecting to sell my bitcoin @ $400+.

Today the price started to fall, and some users on the btc-e chat started mentioning that the bitcoin was going to crash to about $100, in panic I sold my bitcoin @ $275.

I don't have a lot experience trading, how can I know with a minimal amount of conviction in which direction the price is going to move in short and long timescales, can anyone show me the way not to make such a stupid trade again?

1. don't ever listen to the btc-e trollbox
2. Bitcoin has always trended upwards in the long run, so holding onto your bitcoin will likely save you from short term losses.
3. Bitcoin has spikes where everyone thinks it is going to 10x in a month, it won't

So, when bitcoin hasn't changed price for a few days: buy some, hold... sell when you would be happy with the profits.

It's only going to get harder to produce bitcoins so I'm not sure why people panic sell.

Even if you could buy a 50Gh/s BFL Miner today (which you can't, there's a long wait) it would take 143days to make a return at BTC $400.

It might help if instead of 1 Bitcoin you think of it as 100,000,000 Satoshis!  ;)

Thanks for your reply, I will surely follow your advice, but in the meantime, is there any easy way to read and interpret financial charts and indicators?

When presented with these charts, I really have no idea what I'm supposed to take into consideration with regards to wether it is an appropriate time/price to buy or sell.


In my opinion, believe is irrelevant, I mean, I do share the conviction that bitcoin will become increasingly more successful in the future, but obviously I'm looking at it more as a short/medium term financial investment, where I can achieve some profit by purchasing cheap bitcoins and selling them at a higher price.

The thing is that I don't have any trading knowledge and experience and I would like to know how to learn to read financial indicators rather than be influence by some trolls panicking in the btc-e chat board.

That only works in a long term timeframe.

Also, why is it that the most successful traders own their success to a constant trade off of their assets?

A good comparisson for this are the betfair trading markets, the people making big money there are not the ones who purchase and hold, they are the ones who persistently trade their capital for a higher profit.

Yes, I'm considering buying now, but it will still be a loss of $60 to the original price or purchase, do you think the price will stabilize @ the $300+ again or it has a tendency to drop again?

Are u joking? The richest man in the world Warren Buffet made his fortune from buy and hold.

The only people who make money from quick trades are the exchanges!

Yes, buy and hold.  The diff will go up and with that, the price!

Maybe you should just trade on paper instead of trading actual bitcoins. It will save you a lot money.

Oh, and all those people who you believe when they say they know what they are doing ... they also don't have clue, they are just pretending.

Take a look at this chart:

http://bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25zvzl

Had you bought and held at any point before three days ago and just held you would be in profit.

I have tried trading and it's too difficult to avoid acting on emotions.

Selling when it's obviously crashing like you did is not a bad idea - just make sure you buy in cheaper. Btc-e is ~$265 now so you could do that.

A good tactic if possible when the price drops is to buy in again, lowering you average cost.

Dude, just trading 1 BTC isn't really called trading, It's just called selling.
NEVER, EVER listen to the BTC-e chat box.  It's called a trollbox for a reason.

no way it's going back to $100, unless something catastrophic happens. every time it has a big rally, it goes to heights it has never reached before.. and doesn't come back. this is at least based on historical trends. it would be unlikely that we will see it drop below $150ish again.

i think it's best to absorb as much info as possible. it's good to get someone else's perspective, but you have to first vette and agree with their reasoning before making a decision.

You did exactly what most people do: panic sell.

FTFY

Trading just to make your results appear better is a mistake. If you don't have a solid well-researched plan, then it is better to do nothing.

I also bought at around $340 and immediately afterwards the price plumetted but I didn't sell. I'm waiting for it to go back up and I'm thinking about buying more now that it is cheaper but I need to wait for the wire transfer next week  :-\

Fair point, but I would say Bitcoin is a well-researched plan.

Look at the log chart I posted - how can you dispute that it wouldn't be a profitable tactic?

Reading financial indicators won't help you with roller coasters.

Bitcoin is not plan, it is what you are trading.

Anyway, what you wrote will work if the price always rises to new highs. That's fine, but a person should never have sold in the first place if that is really what they believe.

As for your chart, the problem with basing future actions on historical behavior in such a simplistic manner is that you are assuming that nothing has changed and nothing will change. That is a pretty naive assumption.

Ok, I understand what you're saying, crypto currencies are still very volatile and regular financial indicators cannot be trusted to measure market trends.

Perhaps I approched this topic in an incorrect manner, what I meant to inquiry about is this. It is a fact that many people are making hundreds of thousands or even millions of dollars by investing in these markets with insanely minimal amounts, and my question is, how are they making their money?

Yes, of course I do understand that many of them wait for market capitalization of the BTC or LTC markets and sell at a higher price assets that they purchased at a lower price, but surely this isn't all there is.

I've heard about people that during this last year have gone from a net amount of $100 to over $50.000 by dwelving into these markets. Obviously I'm oblivious to the specifics and to which manner they profit from it, but the fact is that they do, and I would like to know how could I take a piece of that pie.

The people that have made "hundreds of thousands or even millions of dollars by investing in these markets with insanely minimal amounts" are doing just that. They are not trading, they are investing. They bought or mined BTC several years ago and they either used it to build businesses or they just sat on it.

As for the people that turned $100 into $50,000, you'll just have to ask them (assuming that they actually exist).

Just buy another and wait for it to be worth $1,000,000,000 MMMMWUUHAAHAHAHA

http://i41.tinypic.com/23ija6o.jpg

Maybe in a few lifetimes.

Hi, long time reader.. thought it was time to make an account

like you said, I would assume that when people have taken hundreds of dollars and turned them into 10s of thousand that they have just bought the BTC (ill use BTC in this example) very early in the year and have decided just to sit on it. There would be a very low percentage of people that would have made that kind of money trading the ups and downs of the market. In my view theres no real way to foresee the ups and downs and where the price of btc will go so its mostly just luck. Imagine in January if someone told you that BTC would be worth $400 by the end of the year, you would have laughed in their face haha

Ive also come to realise that here is a lot of people who like to "talk it up" so to speak when it comes to how much they've made so I don't beat myself up too badly about it :)

I see, so, a simple question, if we take into consideration the assumption that the price of BTC will continue to rise exponentially, what would be the best investment of my money per dollar, mining or long term trading?

I have a moderate computer, I have no way to compete with those beasts that mine @ 1000+ GH/s, but I do see many companies online renting their computer power to mine for bitcoins. If I were to invest let's say $400 today I would likely purchase a little over 1 bitcoin at current price, by investing that same amount on a mining service how many potential bitcoins could I get?

Im in no way an expert in BTC investment as Ive been only doing it for about 4-5 months

but the way I look at it is if you wanted a "safer" and I use the term loosely.. I would buy the btc and hold it for the coming months/years..

if you want to multiply your BTC, best way I can think of atm is investing in a mining company.. The share price could easily multiply within weeks (depending on who you put your money with) or on the other hand it could be worth nothing if the company fails.

No one got rich being too safe

Best advice:

Do not bet on one horse !
Always keep some of your budget open to buy more if it drops, this causes your average buying price to be lower, making it easier to sell with profit if it rises again.

And never invest more than you can afford to lose. Just be prepared to lose it all in the worst case.

Now this is buy and hold...


http://www.washingtonpost.com/blogs/the-switch/wp/2013/11/09/the-11-million-in-bitcoins-the-winklevoss-brothers-bought-is-now-worth-32-million/

These are the guys who sued Facebook to get rich, if you don't already know that. ;)

Well I wouldn't say you took a big loss! A big loss would be half or all. Reading charts takes a lot of practice and feel. I predicted 24hrs before last big drop that it would drop $100 > it did (BFL forum). If you want to learn about charts google "incrediblecharts" there you will find basic and advanced stuff. Buy and hold with Bitcoin? No way... Too risky. It just takes something scary to completely spook the market... Could take years to recover. Investing in Apple and Google and Co maybe buy and hold. Get the idea? Direction of Bitcoin? Hitting resistance at 350$... Each time it then drops. I'm looking at getting in at 275$-285$ (Also not fixed). I missed my own boat last time....Only invest what you can afford to lose. Somebody said "Only the exchanges make money" this statement is incorrect. Savvy people who can judge the market... Short and long term make money. You can make money in a down trend trading shorterm. Buying on one exchange and selling on another in times of Volatility is somewhat dangerous and greedy. We are not dealing in $$'s here but a very risky volatile "Tulip Culture". Have a play get burned and learn... It's just like investing in a very speculative stock..... Nothing more. Hope this helps.

Buy and hold, trading is madness, nobody can call the vol right consistently

Unlikely that we will even see sub-$200 again

Unlikely...? Quite possible I would say. Keep this in mind and you shouldn't get hurt too much. Reasons? A technical hitch. Whole system breakup... Leading to total lack of trust in Crypto currencies. A super hacker wanting fame and notoriety "I broke Bitcoin!". Governments feeling threatened that Dollar and Co are starting to take a sideline. Loss of legitimate taxes.. The list is endless! All I'm saying is have fun and "dabble" but don't get too involved. Here $40 there $10... Lose $27... Gain $106... But don't put you life savings in.

Never panic sell. If you can't trade, then  buy and hold.

Eventually bitcoin mining will cease (run out) and there value will skyrocket as difficulty increases. With the upcoming mining rigs taughting >1.2TH/s, I don't think the price will fall too much. I would hold on to them for about 6 months, sell 50% to be safe, then hold the rest for an additional 12 months. This way you always have your finger in the pot and never cash out while at the same time retaining the ability to profit.

buying it at $290-$310 still a good period

Man buys Flat with 4 year old stash of Bitcoins

http://news.sky.com/story/1161340/bitcoin-man-buys-flat-with-forgotten-fortune

Yeah, people gotta stop thinking in terms of Bitcoins but instead in terms of Satoshis.

1 Bticoin is 100,000,000 Satoshis.

In the end, every day folk will be spending Satoshis (The name sake of the Bitcoin Inventor), not Bitcoins.

Only the Elites will trade whole Bitcoins.  ;)

hopefully 100 USD agian :D

Why would you listen to trollbox dood?

Just hold bitcoin long term, and you will make a profit.  I bought back in late 2011 and have mined since then, never sold or panic.

You don't say?
Maybe once 1000 bilion flows into the market.

Is it expected to come below 280 anytime in upcoming quarter ?

ok

No it is not. Doesn't seem like a bubble now.

It was 206 a few weeks ago.  Choose an exchange and set a limit order for whatever price you want, and wait.

Sometimes the price only touches for a second before it bounces back up.  If you have your order set now, it's more likely to get filled on a downtick.

Your analysis needs to be deeper than this if you want to trade this market. Be aware that most traders will lose. If you are going to trade, keep in mind that for inexperienced traders, dollar-cost averaging is likely the best way to take advantage of market movements.

This is also correct. You never know what might happen.

Lesson learned. Do not listen to anyone's prediction. There is no such thing as predicting the price, just guessing.