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1101  Economy / Speculation / Re: Reversal! on: February 17, 2013, 05:30:36 PM

as always, if you used my analysis to your benefit in any way, please contribute and i will continue to post publicly, free of charge. i do put a lot of effort into my work and subscription-only analysis leaves a bad taste in my mouth.


link ?

... to what? i post the conclusions of my analysis here. if you have any questions or special requests i'll be more than happy to elaborate.
1102  Economy / Speculation / Re: Reversal! on: February 17, 2013, 05:14:29 PM
you guys are so silly. just as bad as the first irrational bulls on the way up the 2011 bubble. do you think you all are going to be rich? do you really think that an exponentially increasing number of people will pour money into your pockets every day? pyramidal hierarchies are unsustainable and we haven't had a red candle on the weekly scale for almost two months.

in two words: zero-sum

That's a silly and narrow minded argument to make regarding BTC. Zero-sum only applies to a closed market, and a closed marked would require a saturated market cap, which is quite obviously not the case with BTC.

Also, pyramidical hierarchies are unsustainable, sure, but there will always be an underlying pyramidical profit hierarchy in BTC adopters until we get closer to market cap saturation.

both of these are very good points, and have been brought up elsewhere as well.

as for an update for this thread -- anyone seen the btc price lately? this is exactly what i was expecting. i want to wait for the candle to close before i post any more analysis though. have fun trading the swings and i hope someone out their heeded my call and made some money off of the latest knife!

as always, if you used my analysis to your benefit in any way, please contribute and i will continue to post publicly, free of charge. i do put a lot of effort into my work and subscription-only analysis leaves a bad taste in my mouth.

arepo
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1103  Economy / Speculation / Re: Technical analysis is total bunk. on: February 17, 2013, 05:06:21 PM
TA ain't bunk, but there is also the maxim: "Just because something is true doesn't means it's always useful."

Provided you believe in Bitcoin's potential, trying to trade on volatility in this market, even with the advantage TA can provide, strikes me as incredibly piggish. 1000% growth every 18 months not good enough for ya? There's such a thing as being too smart for your own good.

holy hindsight bias, batman!

-facepalm-
1104  Economy / Speculation / Re: Technical analysis is total bunk. on: February 17, 2013, 05:05:19 PM
@OP


[snip]

Make some TA predictions in advance so we can be in awe of your future predicting abilities. It's easy, all you have to do is say up, down or trade in a range and there will be a good chance that you will pick the right one. 1 of 3. TA is bunk. If it's not, prove it.

[snip]

since my reputation is on the line...

this was a good one,

and this bearish divergence predicted the flattening of prices (=trading within a range, as opposed to continuing the trend).

and i may be wrong in my new call. but that doesn't disprove TA either. it obviously can't predict the future because markets are anti-inductive and some irrational or large players or big news events can add additional pressures to the underlying market forces. but the fact is, we're overdue for a correction. the indicators all agree.

and it's certainly better than 50/50 though, i can tell you that. you do need to understand stochastic calculus for that point, though.

also, are you going to respond to any of my points? do you understand the basic principle that momentum changes before price, at least?

i just want to thank you for the spectacular timing of this post. i can now add my most recent call to the above list. even if technical analysis is bullshit -- which it is not -- you really put your foot in your mouth with this one.
1105  Economy / Speculation / Re: Price holding super-steady: launchpad formation or thin ice? on: February 17, 2013, 05:00:33 PM
im impressed. creating proprietary indicators that work is indeed an accomplishment.

i wasn't trying to get bites, but you made a blanket statement that was just incorrect. lagging indicators are not useless just because they represent an echo.

the whole point of indicators is simply to visualize data that isn't accessible through conventional means. a price figure and historical graph and volume bars by period hide so much information.

if you don't like the MACD, that's fine. i don't like a lot of indicators that are "tried and true".

and anyway, i, too am enjoying watching BTC trade. mainly because i feel vindicated after all the flaming and derision about my bearish predictions...
1106  Economy / Speculation / Re: Price holding super-steady: launchpad formation or thin ice? on: February 17, 2013, 04:31:33 PM
BTC could drop by 75% tomorrow, that's not impossible in a fickle small cap market.  But personally, I only intend to sell if and when the newsflow indicates that Bitcoin has hit a wall of insurmountable problems.  I don't think that charts patterns are an optimal guidance mechanism at this stage of Bitcoin's adoption curve.

this is a terrible misconception that just about everyone has. charts are not meant to predict the influence of news, but rather make observations about market forces like the behavior of an asset that is overbought.

as price goes up, the incentive to take profit goes up. if an asset were incredibly overbought and an influx of new money began flowing into it, market forces may prevent the 'obvious' rally from happening because selling pressure would increase in proportion.

kind of like what is happening right now, in spite of the reddit announcement.

charts will never predict single movements by large actors, or anything like that, and no one is claiming that they have the power to.
1107  Economy / Speculation / Re: Price holding super-steady: launchpad formation or thin ice? on: February 17, 2013, 04:25:42 PM
I've said over and over if price violates my trendlines then I switch my tack. But lets move past the "screw you bull/bear" part of the conversation.

I know what moving averages are. They lag price. I also know what MACD is, and being composed of lagging inputs, also lags price. They also normalize price action and "smooth" it, to make things a bit more comprehensible to the trader.

This still doesn't remove the fact that they are - LAGGING indicators that do little else but mimic price movement. This, among other reasons, is why they are completely decorative and shouldn't be used to prognosticate about anything.

trendlines are subjective and are not superior to charting but should be taken on equal footing for a more complete picture.

by your definition, all indicators are lagging indicators. the MACD goes 'up and down' as an echo to price but there's more to it. sometimes the price makes new highs but the MACD fails to. other times, the opposite happens. the crossovers of the slower and faster moving averages also represent information about the rate of change in price compared to its historical rate of change. these are all very important observations. indicators do much, much more than mimic price movement. have you checked out chart school? i don't mean to be condescending, but you don't seem to know much about the MACD.
1108  Economy / Speculation / Re: Technical analysis is total bunk. on: February 17, 2013, 04:13:25 PM
Yeah, TA is the same as a coin toss - but only if the coin would generate similar results for everybody tossing at the same time. So what Puppet said - instead of being 50% random, TA gives the edge of knowing when to enter / exit the market because of herd mentality, markets are all about herds actually.

Not always right, but even more than 50% is good enough.

technical analysis works in ways other than simple herd behavior. this point has been addressed in this thread already. in fact, the most objective comment is by far this one:

Technical analysis is based on one assumption:  that there exists time-correlations in market prices.

If someone manages to formally prove the existence of these correlations, that would settle it for me.

I've seen very complex attempts at extracting these correlations, through artificial intelligence algorithms such as high-dimensional support vector methods. These algorithms can find extremely complex correlations in the data that would be very hard for us humans to grasp, or completely unintuitive. If these methods fail at detecting correlations, I have a hard time with the credibility of "toy functions" used in classical TA.

My 2 bitcents. I could be completely wrong and thats fine.

(note: finding correlations amounts to predicting the price better than random. Of course, random can be right sometimes, but it's predictive power is useless.)

i also added my own 2 cents about the relationship between technical analysis and calculus, which i believe is why it is effective.
1109  Economy / Speculation / Re: Price holding super-steady: launchpad formation or thin ice? on: February 17, 2013, 04:10:38 PM
And just because I made my account here at that time doesn't mean I've not been around longer..
I'm annoyed with your flood of posts indicating that you've sold off and asking the rest of us here to follow the same old boring price pattern bitcoin has always been making.
Anyway, let's give it some time and see what happens..

edit: typo

i'm not saying anything about how long you've 'been around'. there is inherent risk in purchasing or even holding an asset that has made 500% gains in under a year. you seem adamant in ignoring this fact. the incentive to take profit grows with the price.

also, i'm annoyed that you assume i'm just some troll who's sold off and is trying to herd some lemmings. if that were the case i'd have a subscription service so that i could literally control a bloc of speculators. i post my analysis publicly for everyone's benefit. i called the knife and i hope at least one other person also profited off of it.

and i'm seeing what's happening right now. i'm not trying to be standoffish here, i'm just responding to the dismissive attitude i've been faced with since i started seeing divergences. like i said, if nobody wants a bearish perspective ever, fine. i'll stop wasting my time. i post publicly to try to help newer investors hear something other than moon-trajectories, so maybe they'd be able to respond properly to the correction that i've been forecasting that is happening as we speak.

1110  Economy / Economics / Re: Bitcoin's first major deflation event, and its consequences on: February 17, 2013, 11:11:53 AM
why is it so difficult to see why this, too, has a negative impact on the adoption of bitcoin? this is all i've been trying to say this entire thread.

Because it makes zero sense: Hey people, we have a problem!! Many people will want to use Bitcoin so bitcoins are going to become very valuablevolatile therefor no one will want to use it!!!11

I mean, I don't know what more to say to this.

FTFY. you continue to respond to a point that i'm not making, and ignore the one that i am. i don't really know what more to say to this.

try again? reread the post i linked last. seriously. i don't even mention the words deflationary spiral. it's all about bad behavior. please, please, please put the effort in if you're going to post again. otherwise just don't bother.


;tldr: "The economy must grow" <- I'm sick of that shit. In a deflationary spiral "the economy would grind to a halt" <- I seriously doubt that.


i know the OP is about this. but the discussion has moved way past this dead horse. no one is arguing that the economy will grind to a halt... i didn't even say that in the OP. i referenced the mechanism of the deflationary spiral as a way to explain recent price rises. i feel it's also an example of predatory speculation, which will lead to newcomers having a bad time.
1111  Economy / Speculation / Re: Price holding super-steady: launchpad formation or thin ice? on: February 17, 2013, 11:06:29 AM
All you people have been staring at the charts way too much the last couple of years. Everybody here seems to think that a "healthy" correction is due. And I bet that $27 sounds expensive to most of you who have a base price of say $5. You guys need to cut off that linear thinking. Everything right now is pointing at bitcoin becoming widely adopted on the internet and when that happens, $27 for a bitcoin is NOTHING. Real bitcoin adoption is not going to adhere to some silly indicator saying that we're overbought. I'm fully convinced that this is the last stop for everybody who wanted to make a quick buck to get out.

it's not charting, the charts reflect knowledge that traders should have. you joined these forums when prices were already on their way towards $10. i first started following bitcoin at around $2.50 / btc. i'm sure there are some people who are still holding onto these cheap coins. at some price-point or another, they're going to figure the risk of someone else selling first is too great for the profit opportunity and sell themselves. this is what drives corrections. we haven't had a green weekly candle in almost two months. take the bulls out of your ears.

The problem with most indicators is they're usually normalized price fluctuations - and therefore, complete crap.

Look at the MACD, and the rest of it. Hey, it goes up when price goes up, and goes down when price goes down. Seems like trying to trade off an echo, eh?

Ridiculous.


the MACD tracks moving averages. the fact that these averages have peaked recently, and that the shorter-term moving average is now BELOW the longer term moving average are both really important pieces of information about the rate of change in price compared to its historical rate of change. right now, we're underperforming the growth that we've seen the the past month. how isn't this important?

seriously, just because you're a bull and i'm showing you bear tracks on the charts doesn't mean that charts are worthless... sometimes charts give false signals, you know. you should probably argue for that instead.
1112  Economy / Speculation / Re: Price holding super-steady: launchpad formation or thin ice? on: February 17, 2013, 08:13:33 AM
to me it looks like bulls gathering breath before breaking an all time high. but it may not happen immediately, won't be surprised if we correct to ~$21 first (you can see strong support there).

this is a healthy and realistic target.
1113  Economy / Speculation / Re: if you're not buying on: February 17, 2013, 08:12:27 AM
everyone buying BTC become rich

everyone cannot become rich.


In a debt based fiat money system, it is a zero sum game, your saving comes from another people's debt, so your conclusion is correct


it's a zero-sum game regardless.

say bitcoin were a closed system. no more fiat influx, constant market cap. any gains any trader makes will be another traders' loss. someone selling coins they bought for $5 last summer for $27 picks $22 out of every pocket which bought coins at higher prices.

however -- and this is niko's point as well -- since the market cap is small compared to the potential market cap, there is an influx of fiat which might allow for huge amounts of deflation on the long term which means anyone holding btc now who is still holding btc then will get a really, really good return on that investment.

but even in this case, everyone will not become rich. if you mean everyone who has btc now, then sure, but that's a pitifully small number compared to the amount of people and fiat required to really blow the price that high, and the last ones to 'convert to bitcoin' will be the ones whose money we're taking.
1114  Economy / Speculation / Re: why I sold my bitcoins.... on: February 17, 2013, 07:56:15 AM
Now, faith. The best indicator of faith is price, in case of bitcoin. The price is growing, and that's the indicator that people have more and more faith in bitcoin.

this is true only under certain circumstances. be careful.
1115  Economy / Speculation / Re: Technical analysis is total bunk. on: February 17, 2013, 05:55:52 AM
i dont want to derail the thread. but let me clarify:

you suggested a formulation that might take a parameter like "number of large players". i am more in favor of a (mental) model of the price that looks like a taylor expansion and which acts like a polynomial with local minima and maxima that can be anticipated by tracking the derivative, or rate of change (price 'momentum' in trader terms). it wouldn't actually be a good method to try to model price as far as fitting of a curve.

in other words, it was merely an example to show that the idea of tracking the derivative of a much simpler polynomial can be applied to tracking the momentum of the 'price function'. a thought experiment, if you will.
1116  Economy / Speculation / Re: Technical analysis is total bunk. on: February 17, 2013, 04:59:00 AM
If you're going past x^4 and you don't have a damn good reason you are overfitting.  Why would you try to model price like that?

i wouldn't. i was contrasting a taylor expansion-style price estimator with a function that takes multiple parameters.
1117  Economy / Speculation / Re: Reversal! on: February 17, 2013, 04:44:02 AM
On the other hand, bears are not selling despite the bid walls at 27.15 and 27. $27 should give bears a decent profit no matter what price they bought. Instead, the bid wall at $27 is keep strengthening.

Conclusion: The bull has run for over a month and needs some rest. Plenty of USD on the bid wall waiting for the next knife (read: pig)

you can't rule out a downwards breakout just because it hasn't happened yet... the market depth isn't that asymmetrical. the market is still unsure. if it doesn't happen for a long enough time, the market depth will begin to reflect the support you mentioned above. it's still too soon to call.
1118  Economy / Speculation / Re: Technical analysis is total bunk. on: February 17, 2013, 04:15:39 AM
Quite easily...

and the award for completely sidestepping valid points goes to........

you. not me. Tongue

hint: how many algebraic terms do you think one would need to construct a polynomial function that estimates price?

That's because I agree with your points about calculus, volume, and momentum. Tongue

It depends on how much information you have.  If you knew everything you could likely reduce it to a very small number of variables (ie big players).  If you are trying to tease it out of a bunch of noisy signals, quite a few.  Your example was just a quadratic shifted linearly.  I've seen those before.

i'm glad we agree on something Cheesy

im not sure if your formulation would work though. i'm talking about a function that traces the actual path of the price, which could be estimated by a function of only one variable with a really, really large taylor expansion (c1 x^n + c2 x^(n-1) + c3 x^(n-3) ... + cn x + C) rather than one which solves for price given multiple parameters f(n, V, N) where n= number of large players, V=daily volume, n=good news or something like that.

the beauty of taylor approximations is that they're possible. any differentiable function of one variable can be estimated by a polynomial to any arbitrary precision.

but that's besides the point. the original example was a mixed cubic. its derivative was a mixed quadratic. good on you that you know that it has a basic cup-shaped graph but you wouldn't be able to, for instance, immediately tell me what its intercepts and minimum value were without a little bit of math. if you have the graph in front of you, these things are immediately obvious.

but this explanation is mostly for other readers anyway, as it seems we are in agreement as to why representing the data graphically is advantageous.
1119  Economy / Speculation / Re: Reversal! on: February 17, 2013, 04:00:10 AM
There is a bid wall at $27 waiting for you. Have you sold everything? This is your last chance!

there is an ask wall at $27.50. have you any usd left? this is your last chance for sub-$50 coins!!!111!!

but of course you don't have usd left. no one does.

anyway, this is normal market depth for a deeply consolidating market after a large move. it's what keeps the price within such a tight range and builds pressure for a breakout.
1120  Economy / Speculation / Re: Technical analysis is total bunk. on: February 17, 2013, 03:53:34 AM
Make some TA predictions in advance so we can be in awe of your future predicting abilities. It's easy, all you have to do is say up, down or trade in a range and there will be a good chance that you will pick the right one. 1 of 3. TA is bunk. If it's not, prove it.


And his call might be right. This time. But TA is the same as flipping a coin. Sometimes you guess correctly. It's not because the squiggly lines predicted the future. It's not because you are a TA guru. You just guessed correctly. This time.

whoa, are you going to let me try to prove it or are you going to stick stubbornly to your assumptions? if nothing i say will change your mind, i'm not going to waste my time. but since my reputation is on the line...

this was a good one,

and this bearish divergence predicted the flattening of prices (=trading within a range, as opposed to continuing the trend).

and i may be wrong in my new call. but that doesn't disprove TA either. it obviously can't predict the future because markets are anti-inductive and some irrational or large players or big news events can add additional pressures to the underlying market forces. but the fact is, we're overdue for a correction. the indicators all agree.

and it's certainly better than 50/50 though, i can tell you that. you do need to understand stochastic calculus for that point, though.

also, are you going to respond to any of my points? do you understand the basic principle that momentum changes before price, at least?
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