IMO, bitcoin is not a good fit for a purely quantitative/technical approach.
i can agree with you here. many more things than strict technical analysis go into my decision-making. using this forum as a sentiment gauge works really well, actually. |
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trends DO yield information on 'expectation value'; in a perfect-information market it would not happen, but in real markets price has momentum. and thus scaled derivatives and oscillators are useful in identifying trends (and their limits -- tops, bottoms).
There is a problem using this as a general rule on markets. The more traders follow this rule, the more true it becomes -- but a trader that simply dampens oscillations will ultimately eat all those who follow trends too much. In such a situation, it's those who break trends who get the money of those who followed them. As always, the market will compete to eradicate any pattern that gives information on the expectation value of the price. Depending on the time-scale, profits, and complexity of the pattern it might take a while though. agreed, it's very much the Red Queen's Race; but with a little effort i can try to constantly trade ahead of the market. it's not a guaranteed system, just one that is currently working for me, for the bitcoin economy. |
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bitcoin is indeed quite UNDERVALUED right now, on the long-term.
What gives you that idea? Or do you not believe in perishable gold? the text you clipped from my quote answers your question...  Not completely... some details/assumptions would be nice. there was about as much money in the economy on the eve of the supposed $8 RALLY as there was at the peak of the summer bubble.  |
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Volume has been very low lately also.
weekend syndrome |
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The statements on forecasts use additional assumptions, which seem to boil down to trends giving nonzero information on expectation value. This should not be the case normally, and is not a generally correct mathematical concept. also THIS. this is the point. trends DO yield information on 'expectation value'; in a perfect-information market it would not happen, but in real markets price has momentum. and thus scaled derivatives and oscillators are useful in identifying trends (and their limits -- tops, bottoms). |
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look on mtgoxlive. see the jagged cliffs on the ask side? that entire mass was put up since the last dump and hasn't budged. all manipulated.
that leaves but 30k btc back to $6.50 and beyond!
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IMO, arepo's claims are wrong about calculus in general but correct on the manipulation and correct on the part that the method implied could be used to make money from October to now.
In each of the cases, there is a statistical argument in it. The statements on forecasts use additional assumptions, which seem to boil down to trends giving nonzero information on expectation value. This should not be the case normally, and is not a generally correct mathematical concept. However, reading Goomboo's posts, trends have a strange tendency to continue more than expected on some markets, very especially on Bitcoin in the last year.
On big instead of small players acting on the market: all we get is few large movements instead of many small ones. This doesn't really change the general nature of the market, just gives it a little more noise on larger scales. There is no magical power in money that enables one to manipulate others. Sure, you can place a few manipulative large orders, but only if you accept the fact that they may be filled, because there's always a player around who could to that if he wanted. Okay, people who are overly manipulated by far-away orders can be manipulated, true, but that behavior is asking for it.
Claiming that the market is controlled by the large traders only is overdoing it. There's also little reason to assume their psychology and objectives being much different from smaller traders.
+9000 i think you and i agree on more than you think. you've very masterfully stated what i've been griping about for a while about "the Manipulator". you've also pointed out that my method does work, and works via the tendency of markets to swing from overbought to oversold (see: trends have a strange tendency to continue more than expected...) however, i don't understand your point about any "generally mathematical concept". The only general concept used here is the fundamental theorem of calculus: that the derivative of a [continuous] function is equal in magnitude to the slope of the function at any point. The function P(), the price function, is just whatever the price is: that function is equivalent, mathematically, to the function that the market mechanism is computing. as traders you are aware that this is a wildly erratic function: many economists (Elliot) believe it to be infinitesimally complex, i.e. a fractal! But it can be smoothed and slopes can be figured, trends can be identified, and profit can be made because trends have a strange tendency to continue more than expected.... i hope i have clarified my previous points |
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Calculus is powerful, and I've likely known about it longer than you've been alive. But you know what determines bitcoin price at this stage in the game? Big players /manipulatorS, with $50k+ BTC/$250k+ USD, and when they choose to enter or exit the market. Predict what they're going to do, and you'll know where the game is headed. Your charts have more in common with tea leaves than with a predictive model of bitcoin prices.
i've addressed this before. in fact, i've made a whole thread about it. briefly: manipulated movements are large, sudden, unpredictable, and unprofitable except by luck. also, "THE MANIPULATOR" is a hypothesis. most of the volatility we see is from leveraging on bitcoinica, and there is still an underlying trend formed by the collective movement of everybody else's trades. in other words, manipulators move the market, charts show and predict how the market reacts to the movement. |
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interestingly enough, anti-FUD aside, we still haven't broken the long-term trendline. a correction to $5.50 is the lowest we can go, and by my analysis this is more and more looking like a bottom.
Not to take anything away from your analysis, but we have heard this before. It might take selling a whole lot of coins to make it happen—but it can happen. An honest assessment of risks is generally more useful than misplaced optimism. As for myself, I go to great lengths to ensure that I am estimating risks as accurately as possible. when i make predictions, it is obvious. i was making no prediction, as i agree that there is significant risk at this stage in the game. only commenting on trends... my benevolent advice? hedge both ways right now, until a stronger trend emerges. but don't short... im not counting on sub-$5.00 BTC any time soon  |
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tl;dr put your money where your mouth is; i've been trading on my analysis since october and am up 50%, while, though i am not one to believe everything i read, you just got 'goxed'.
So, you've been doing this since October, when we hit rock bottom pricing of $2 per BTC (and we hit that again in Dec.), and since then BTC has increased roughly three fold and you're up 50%. That's not very good, as basically luck alone and guessing you should invest when we hit $2 would have given you much greater returns. did you know in october that the price was going up? nice hindsight bias, dumbass. |
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because our signal isn't continuous
Exactly, even if calculus was predictive, it can not be applied to discontinuous data. You can only apply it to projections of that data, and each projection has it's own biases. calculus isnt predictive, it just describes how, for instance, crossovers can predict reversals. when the slope of a function is zero, at its maximum/minimum, the slope changes sign; in price terms, a reversal. if one were watching the function graph over time, as we watch the price function, if we were also keeping an eye on the derivative/point slope, we would be able to anticipate a reversal even among the noise of the market (stemming largely from the discontinuity of price data, as has been pointed out). and your good points are why good traders don't just use one chart. they are all approximations and models. almost similar to predicting weather. when a whole bunch of signals agree, however, one should take note. rather like meteorology is awful for predicting daily weather, but we know the direction whereto our climate is going (global warming, &c). fantastic post. I dont think Ive seen this much nonsense in a single post in a long time. since you can differentiate this function, why not just use the function itself to see where the price is going? guaranteed profits, like stealing from a baby. fantastic post; i haven't such blatant lack of knowledge of calculus in a single post since the person to whom i was responding when i wrote the post you quoted. so let's see: if we have a function (discontinuous, mind you), and we want to know if its "very next" value will be higher or lower than its present, you want to know if it has a positive or negative slope. the problem, however, is a single point in a discontinuous function is NOT differentiable. so your above challenge is impossible. HOWEVER, using charts can be almost exactly described by this intent. if one smooths the data using averages, for instance (even the data you look at when you look at price charts has been smoothed, usually by boxplots), and then graphs the derivative of this now-continuous function, you might get an idea of what kind of trend is occurring. in fact, this is extremely easy, and can be done by just about anyone during a strong trend. long-term PVT and Accumulation/Distribution Line will both be increasing, and thus the Chaikin Oscillator ('momentum' or scaled-slope of the ACC/DIST) will be relatively constant and positive. guaranteed profits, like stealing from a baby! identifying tops and bottoms (protecting those guaranteed profits) is more difficult. using indicators that also look at volume is helpful, as price and volume are the two core pieces of "data" that are free, information-wise, in a market, and should always both be considered. also looking at oscillators which are slightly different than indicators that just act as scaled derivatives is helpful because they try to track the 'momentum' of price moves -- that is, the tendency of markets to swing from 'overbought' to 'oversold' -- which are signals of a market reversal. tl;dr put your money where your mouth is; i've been trading on my analysis since october and am up 50%, while, though i am not one to believe everything i read, you just got 'goxed'. |
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interestingly enough, anti-FUD aside, we still haven't broken the long-term trendline. a correction to $5.50 is the lowest we can go, and by my analysis this is more and more looking like a bottom.
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The manipulator or manipulators (at any given moment) are those active bitcoiners with a value of $500,000 or 100,000 bitcoins. Simply having $1 mill can move us up to $8 or simply having 100,000 bitcoins can move us down to $4. It does take rocket science to know that 1% of us have that kind of money  What does it matter if it's one person or a thousand with smaller amounts, all that matters is that it moves and you're on the right side of it. [/thread] It matters because the actions of a thousand are a lot easier to anticipate than the actions of one person. is that so much the case? |
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I am beginning to wonder if $5 is the new $2. When we were trading in the $2-$3 range everyone was saying how they were waiting for sub $2 and $1 Bitcoins. Well then we took off to 7 in a matter of days so who knows what is going on here. Those who are waiting for sub $5 Bitcoins this time might not see them again.
good call. i agree. it looks low, and terrible, so everyone's upset. this is called pessimism. if we're lucky there will be no panic, and the bull market can start up again. congratulations, sir, you identified a market bottom using sentiment alone I have found sentiment to be the most accurate indicator of all. When everyone is screaming rally we are due for a correction and when everyone is screaming crash its time for a rally. +1 |
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It is obvious that bitcoin is getting killed lately, and can potentially take a huge dive back down the the $2.00 range.
Everything is pointing towards a drop, the days before the drop were also very obvious with the low volume.
One thing that I noticed from watching bitcoins fall from $30's, is that bitcoin has never failed to make new lows, no matter how much I even think otherwise.
So what is going on here now? The manipulator really pushed the price up high. However, it looks like he has not been able to push higher than $7.2, now it looks like he is not able to even maintain the prices. He put up his bidwalls, but they have failed. Today I saw the $5.4 bidwall go from 9000 coins, to 38,000 coins, then back down to 10,000 coins, all within 20 minutes. Wonder what he is up to.
Is this a controlled drop, to suck up bitcoins cheap again. Then a push to higher prices, to dump them?
has he just failed to keep the price high because it is just to expensive to subsidize the price of bitcoins?
Has his bidwalls been taking too many dumps, where he decides that it is not worth it to buy all the bitcoins people are dumping? I have noticed in the past that when many of his bidwalls get sold into within a short period of time, he usually pulls out of the market for a while. This is what I think is happening now.
So whats up? Just recently you guys were all talking about double digits, bitcoins going to the moon, it was like 95% optimistic people, now everyone is changing their mind.
When most everyone is consolidated behind a bearish sentiment, this is the time to look out for upward spikes. There are fundamental reasons for this... Get a clue. haha +1,000,000 i just quoted your wonderful support/resistance chart in my falling knife thread where i was challenged to call the bottom. we definitely already bottomed out, and we won't see sub-$5 again. the ask side on mtgoxlive is obviously shamefully manipulated, and it is thanks to your charts that i know this. seriously, they are invaluable in my analysis. i love it when i see It is obvious that bitcoin is getting killed lately, and can potentially take a huge dive back down the the $2.00 range.
Everything is pointing towards a drop, the days before the drop were also very obvious with the low volume. just makes my day |
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I don't really care much about rallies. I am very interested on what methods to use to forecast a new drop. Like, where is the top, where the bottom might be etc..?
For me, rallies seem erratic, with no algorithm. But falls, falls I think follow a pattern. Can you help?
you're wrong. technical analysis yields a strong handle on both. |
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I am beginning to wonder if $5 is the new $2. When we were trading in the $2-$3 range everyone was saying how they were waiting for sub $2 and $1 Bitcoins. Well then we took off to 7 in a matter of days so who knows what is going on here. Those who are waiting for sub $5 Bitcoins this time might not see them again.
good call. i agree. it looks low, and terrible, so everyone's upset. this is called pessimism. if we're lucky there will be no panic, and the bull market can start up again. congratulations, sir, you identified a market bottom using sentiment alone |
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so you guys said the manipulator(s) was gonna bring that bitch down to 3$ again
where is my 3$ ??
clearly listening to the wrong people |
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I just looked at goxlive, and it looked a bit bullish on price action, looked like a short term rising wedge might be forming. I thought maybe we could be heading back up. Then I checked RSI hasn't bottomed OBV/PVT are still tanking. I think its a bull trap.
If we break to the upside It won't hold, it might push through 5.50 to get everyone on board, but it will top out at 5.70 and then look for new lows.
This medium term correction has to run its course, my money is still on retest of ~2.20. If we test 2.20 and it holds then that will become e early strong support level. Any lower and people will be all at sea again wondering what do.
i think you're wrong. this movement was preceded by a few short-term indicators turning bullish. also, this: Intraday update.  the depth at mtgoxlive is manipulated. we don't have nearly that much support on the ask side. the bottom was when we bounced off $5.05. $5.00 will hold. i was wrong; there was no panic. maybe we're all a little more mature as traders now  |
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new breaking signal!
10-day Money Flow Index just crossed strongly positive after being oversold yesterday. we may be bottoming out yet.
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