Follow-up to
this post of yesterday. For the whole post, see the
DASH thread.
For you, I am extracting from it the ...
WOB explanations pt2Let me motivate the summing scheme:
Imagine what a
buy order means:
I am locking my BTC into the order - I cannot spend it anymore for ice cream, or helicopters.
Even if I hope to get DASH at a really low price - my order-locked BTC is not only showing
my "price hope" - but it is also showing the absolute amount of real money that I had been
willing to lock into orders.
Same for
sell orders:
Transfering my DASH to an exchange is risky, I give up my property in exchange for an IOU.
And I declare that I want to sell them. Might be at a really high price only - but I show my
willingness to sell them, not using them to buy something, or fund projects, or save for my
children - but by offering them in a sell order.
And as
both sides get totalled in the same way, we CAN actually compare them.
Or rather: We DO compare them ;-)
My own scepticism got smashed when I did cross-comparisons of different coins.
They do differ in this new WOB indicator, and they differ much. I suggest you start
observing it over time, for 3 very different coins - and you might find out that it will
help you to assess how "long-term realistic" the current price of a coin is, compared to
our quotient of totals of the (most of the) biggest, available order books world-wide.
I am querying 30+ exchanges! With our current
"bittrex bleutrade bter ccex exmo livecoin poloniex yobit" in BTC and 2 fiat currencies
- am I sampling enough of
your field? [i.e. DASH]
Anecdote:
When I tried my simple base calculation for the first time, about 1.5 years ago, and
only with the orderbooks of poloniex ... I was surprised to see that LTC stayed totally
OB-balanced over a very long period of time - and with varying current prices.
As if the total order book volumes ("the whole market"), and the current marketprice
("the day traders") are well-coupled - at least for those "relaxed systems" with high
volume, and long past - like Litecoin. (Right now, the situation of LTC looks less rosy,
actually. But the better is the enemy of the good, I guess.)
...
I am interested to see which other knowledge our newbies & pros will be compiling
collectively - about all of the most advanced & really successful currencies ... once
our 8-steps system is complete. Read the whitepaper & medium blog if you want to.
And simply start using the beta already.
May it help your trading!
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http://www.newbium.com/preview 
Although we strive to build Newbium on simplicity & ease of use the above showcase the complexity of our visualizations.
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