how to purchase: small quantity a time?

[zhangweiwu]

Hello. I was wondering how do you do purchase and sales. The way I do is:

In the case of purchase, I devide my purchase task into 10 pieces of the pie, and for each piece:

1. Check the lowest price today, and the current price, and bit to buy the middle value between current price and lowest.
2. Sleep a night.
3. The next day, see if the order is filled. If yes, repeat 1-2 for the next piece. If no, get nervous and buy the piece at current price.

If I sell, I do the opposite.

My question:

1. I thought buying this way I can often catch the lower price than market average, but if I am really so correct, everybody else would have been doing this already, and there must be some losers, so perhaps this method isn't so working after all.

2. I wouldn't know if it worked! There is no way to verify if my method did work better than other people's, unless I know how others buy.

3. Even if this method works, it perhaps needs to be improved, e.g. bid 2 pieces at a price bewteen last 24-hour lowest and average, and if it is not filled in 24 hours, reduce to buy 1 piece, and if it is filled, buy 3 pieces. Or, vary the wait-time from 24-hours to 48-hours depeneding on whether the previous order is filled. Anyway, someone must have studied these methods. What is the keyword to search for other people's algorithm? I more or less believe my little invention doesn't work. If there is an often-good way to buy, they would have been offered by market operators like MtGox as a service, and they didn't, so this doesn't work.

[comakut]

Usually I buy on an scheduled basis and don't care much about the price. If the price is going down fast, then I will wait for some time until it stabilizes.

In general, I think that minor price differences will not matter in the long term.

[Foxpup]

I thought buying this way I can often catch the lower price than market average,

You won't if the prices are going up. In that case, your method forces you to wait 24 hours before buying, by which time the prices are even higher. But if the prices are going down, you should wait longer than 24 hours to buy, otherwise you're stuck with the higher price, so that's no good either. In order to buy at a lower price than average, you need to know whether the price tomorrow is going to be higher or lower than it is today. But you don't, so you can't. You just have to accept that day-to-day fluctuations mean you can't always get the best price.

If you're in it for the long term, you shouldn't bother even caring about day-to-day fluctuations at all. If the price goes to $1000 or even higher, what difference does it make whether you bought at $124 or $125 or whatever?