Emotion is your enemy. Remember that. The only medicine I have for emotion is a plan, because I am unable to think clearly and objectively while emotional. It does no good to pretend you are not emotional.

I am sure you will not, but I recommend you get rid of the android app. The absolute best thing that happened for me earlier this year was losing net access at home. At the end of each work day I slaved over the charts, drew up a plan, and took appropriate action. I checked daily movement on my phone (very expensive from my location) and if prices moved against my plan, I either sat it out (relying on stops and orders I had previously set) or reluctantly skied several kilometers into town. I spent a few weekends studying analysis. I now make more money and sleep better.

Long bulls, who believe we are currently experiencing a correction in a major progression since $2, must accept that the drop from $3.13 yesterday displays an impulsive five waves. As of this morning (4 Dec), the fifth wave is truncated (the subwaves during the same day overlap). This implies either an extension down or reversal. None the less, zig-zags are the only corrective waves that begin with five subwaves. I estimate a B wave up to $2.9 (a half retracement to a very well established resistance), followed by another roughly equal five waves down, to about $2.4, certainly below the wave A low of $2.61.

Unfortunately, it's not a good time to make a definitive case for either the bulls or bears going forward. The bulls can make a good case for a truncated fifth and bottom ($2, 14-18 Nov), an impulsive first wave ($3.14, 2 Dec), and an on-going zig-zag second wave correction this week. Only a price below $2 would truly invalidate this scenario. A rise above $2.9 without first crossing below $2.61 would be a rally signal.

Rather than a zig-zag, bears would expect an extra two waves down. The A-B-C of the zig-zag would be indistinguishable from the 1-2-3 of the regressive impulse. Regardless of your labeling, both of these counts carry the same short term message (5 down, 3 wave correction, 5 down) and should be profitably traded. However, the wave that follows would be very different. The bulls would expect an impressive rally, while the bears would expect a small correction followed by another low toward and likely below $2.

Caston, make a plan BEFORE you trade. And stick to the plan. Your plan must include confirmation and invalidation. If the price does X, I do A. If the price does Y, I do B, if it changes above/below Z, I will do C.

I recommend that you start trading on paper first. Then if you believe your strategy works, trade with small amounts of money. It's always harder for real, getting the price you intend and actually following the plan equanimously; There is no lying to the balance sheet. Keep records of your plans, your rational, and your success and failure. Guard against lying to yourself - I'm serious. I post much of my rationale publically (to hell with dissenters) precisely to keep myself honest.

Never trade more than you can afford to lose and do not risk your entire basket on one trade.



These two contradict. Your natural instincts are your emotions. Both are your cunning enemy.

I doubt anyone here is invested in educating you personally. It's not like these are obscure methods. How's your German? Carl Jung, "Psychologische Typen", Zurich, 1921. Otherwise, start with Wikipedia and follow the citations if you're still interested.

http://en.wikipedia.org/wiki/Myers-Briggs_Type_Indicator
http://en.wikipedia.org/wiki/Personality_type

Similar type of abstraction, well respected in psychology:
http://en.wikipedia.org/wiki/Big_Five_personality_traits

Thanks, I'll look into it.

BTW, Zhou. The new Bitcoinica is amazing. A few of the buttons confused me for no more than a minute, but wow. Excellent. The only thing I have left to complain about is having nothing left to complain about. Damn! I think you've implemented every single one of our suggestions ^2. Make'n money's never been so easy. Tusind tak skal du have!

thanks guys, you made my crash day

@Meelba: I did not watch it live, but 40K was roughly the size of the bid wall at $2.9. If you are presenting a conspiracy theory, it's certainly interesting and I'd like to discuss it elsewhere, but I'm afraid it's completely off topic here (Elliott waves).


The latest drop certainly looks impulsive. The first wave ($3.13 - $2.9) is roughly the same size as the third ($2.99 - $2.75). Therefore, one can expect either the third or the fifth to extend much lower. Of course, the drop may have only been corrective (perfect zig-zag), and then our fourth wave is really the beginning of a rally to new heights. That's also a reasonable position because even after three waves, bitcoin is still in the price territory of the fourth wave of the previous impulse of the same degree; In other words bitcoin has not yet dropped below the green bar. However, the pattern should be familiar to any bitcoin trading veteran, sharp second wave, a long sideways fourth triangle, followed by a collapse. The gamble is yours, but if it's bed time, you might want to place your stops and orders below $2.65 or above $2.98, depending on your bet.

On bigger scales, I have counted a major expanded 3-3-5 flat correction since ($2.1, 14 Nov): A ($2.6, 16 Nov), B ($2, 18 Nov), C ($3.14, 3 Dec) although wave C, while certainly impulsive, only counts three strictly valid waves (extended third beginning ($2.17, 21 Nov). A drop below the magenta wave i ($2.5, 20 Nov) without a progressive correction would paradoxically invalidate yesterday's valid count, but honestly, I'd just accept the invalid count from earlier in the week and call $3.14 the fifth wave peak since 14 Nov.

This count is strictly valid (at least as far as the numbers labeled), but what is valid on these tiny scales, with huge spreads and light volume? Magenta iii ($3.14, 1 Dec) might have been the peak as in my previous green count (and would be be re-labeled II.z.C.v.5), otherwise we can expect a small jump up for the real magenta v (anything over $3.14) before returning to $2.9 and likely falling lower.

The price drop to $2.9 had not been very informative. It falls nicely within the previous suggested fourth waves (green and gold (and magenta) bars). So either way, if we do see a new v peak or prices immediate collapse under $2.9, we can expect the price to first correct to about this same price territory. A price below $2.65 at any time would seriously discourage hope of a rally, continue the monthly downward trend, and I would expect prices to drop to $2 and perhaps below.

Are you telling me that the original seven paragraphs with randomly placed commas and some diatribe about domain names was in fact related to my two line summary?

Similarly, whenever a bunch of people short, does Bitcoinica buy on Mt Gox?

If the wall represents one major player, is there a rational and greedy strategy for holding that price? Does it build up seller sentiment and make a crash greater? Or is he asleep?

Wait. I said maybe. While I was joking, now I am not. MAYBE Bitcoinica IS insolvent. Maybe my mom is... maybe.

Hi Bit-pay. I hear ya, but maybe that's exactly the impression the new user should have, no? This transaction is not (yet) to be trusted.

Come on! If the jest was not blatantly obvious I'd reneg. I'm sure Zhou is making enormous amounts of money, like 10% on every damn trade.

The wall is not moving (in price) but it is getting eaten slowly. I damn need to get into Bitcoinica to celebrate the short party!

The cause is the cause of the cause of an effect. In a feedback loop, the initial cause is often completely lost and irrelevant. The market reacts to itself. Price movement is its own cause. Ever seen a woman cry because she is crying?

Seriously? Maybe it's insolvent and Zhou is locking out his most profitable customers. ... ...  ...

I have to agree with the cat snuggling tit's guy. His icon always distracts me. Better yet, I'll tell you what I thought and hoped this thread would be about:

How cool would it be if the bitcoin blockchain were a git repository? Each commit is a block. Both systems already SHA-hash the entire tree. Both systems are already decentralized, distributed. Both systems assume branching and trusted sources. You could just clone/pull from anywhere, easily verify the latest commits/blocks from peers, and rollback (reorg) from any point in the chain/tree.

Bitcoinica site is down. I wonder if it is executing orders... could get very expensive

Interesting, Pent. I've seen a similar pattern (each of the cyan blue are also broken into roughly three rhythmic patterns):




I esrever the effect and cause, but you otherwise agree with I. For example, no matter what the outcome of the Mt. Gox French court case, something will happen in the market and we will attribute the action to the case. The market reacts if bitcoin is a currency or it reacts if bitcoin is not a currency. Which way? It matters not. But the waves and sentiment do.

The market is like a woman. It does not matter if the conversation is positive or negative, if it's logical or beautiful. What matters is that the she-market is engaged, intimate, liquid, and emotional. If you read her emotions and react rationally though empathetically, she can be manipulated but never controlled. Money helps.