Floors 'R Us

[Kazu]

I believe Mtgox may already be secretly doing something of this nature. If not, I propose the creation of a legion of Floor Makers who will stabilize the BTC price as such:

Step 1: Pick value for floor.



You buy Bitcoins at the floor to stabilize their value (and get cheap Bitcoins).

Step 2: Pick a soft ceiling. The soft ceiling would have a 45% angel.  The idea would be to fill up this wedge with asks. You would add in asks or remove asks from the market as other people add/remove their own asks that would cause it to go above or blow the 45% angel line.

This would prevent bubbles and make sure there is real demand (and reduce your exposure risk to Bitcoins).



Step 3: As each bitcoin is sold you recycle the money (plus the bonus from ceiling/wall spread) back into the floor making it more stable.

Step 4: When another 'natural' wall begins to grow ahead of the floor, you move the floor up as the old floor has likely been obsoleted.

So my question is:
1. Do you think mtgox is already doing this?
2. Do you think this strategy would actually make money resulting in a larger floor each time or would the price increase of Bitcoins erode the size of the floor over time more than price volatility would grow it?
3. Do you think some people doing this would be a net benefit to Bitcoin, or would it detract from the currency?


(obviously you'd need to have a better definition of where to put the "floor" and where to put the "ceiling" but this is just for demonstration purposes. All I'm saying is you'd hook onto areas of high resistance for floors and areas of low resistance for ceilings.

[BookofNick]

Isn't this what traders do already to make profits? Set a price at what they're willing to buy at and sell when they can turn a profit? Why do we need to do this conspiratorily?

[Qoheleth]

Plus or minus certain implementation details, I've been doing this for months.

[Kazu]

Isn't this what traders do already to make profits? Set a price at what they're willing to buy at and sell when they can turn a profit? Why do we need to do this conspiratorily?

I dont see why it is a conspiracy.

The idea would simply be to smooth the ask curves while making more walls on the bid side, while currently it is pretty much the opposite. A bunch of people doing it together just makes everything line up better.

The issue is here that things like the media, or MtGox screwing up, cause all the bears to be lined up, while the buyers come in at a more steady pace. The result is huge swings, which a group with a fair amount of Bitcoins could not only help damp, but make more BTC while doing it.

[notme]

This is what successful traders do.

However, if you try to coordinate different actors to work together at particular price points, eventually someone will go rogue and screw everyone else.

[Kazu]

This is what successful traders do.

However, if you try to coordinate different actors to work together at particular price points, eventually someone will go rogue and screw everyone else.

How would they screw over everyone else? Wouldn't they just buy into a ceiling or sell into a floor? Unless that person more than half the money, I don't see how that would work.

[notme]

This is what successful traders do.

However, if you try to coordinate different actors to work together at particular price points, eventually someone will go rogue and screw everyone else.

How would they screw over everyone else? Wouldn't they just buy into a ceiling or sell into a floor? Unless that person more than half the money, I don't see how that would work.

Set their floor $0.01 highe and their asks 0.01 lower.  They would get all the volume until they had enough to buy up everyone's asks and leave them behind.

[Kazu]

This is what successful traders do.

However, if you try to coordinate different actors to work together at particular price points, eventually someone will go rogue and screw everyone else.

How would they screw over everyone else? Wouldn't they just buy into a ceiling or sell into a floor? Unless that person more than half the money, I don't see how that would work.

Set their floor $0.01 highe and their asks 0.01 lower.  They would get all the volume until they had enough to buy up everyone's asks and leave them behind.

How would that screw over the other people? I can always look at the current highest bid and put one for 0.01 higher. That doesn't mean I somehow screwed over the person just below me.

[b!z]

This is what successful traders do.

However, if you try to coordinate different actors to work together at particular price points, eventually someone will go rogue and screw everyone else.

How would they screw over everyone else? Wouldn't they just buy into a ceiling or sell into a floor? Unless that person more than half the money, I don't see how that would work.

en.wikipedia.org/wiki/Prisoner's_dilemma

[Le Happy Merchant]

I make floorz and dumpz. Who am I?

Manipulator

[hubbabubbabaker]

Is a dynamic version of that chart available online?

[oakpacific]

This is what successful traders do.

However, if you try to coordinate different actors to work together at particular price points, eventually someone will go rogue and screw everyone else.

How would they screw over everyone else? Wouldn't they just buy into a ceiling or sell into a floor? Unless that person more than half the money, I don't see how that would work.

en.wikipedia.org/wiki/Prisoner's_dilemma

Exactly, actually if you know what everyone else is thinking, you can either anticipate the price movement or are doing insider trading.

[jubalix]

This is what successful traders do.

However, if you try to coordinate different actors to work together at particular price points, eventually someone will go rogue and screw everyone else.

How would they screw over everyone else? Wouldn't they just buy into a ceiling or sell into a floor? Unless that person more than half the money, I don't see how that would work.

en.wikipedia.org/wiki/Prisoner's_dilemma

Exactly, actually if you know what everyone else is thinking, you can either anticipate the price movement or are doing insider trading.

There's no such thing as insider trading

[bzzard]

Is a dynamic version of that chart available online?

http://btccharts.com - after registering you will get 2h free trial

[Kazu]

This is what successful traders do.

However, if you try to coordinate different actors to work together at particular price points, eventually someone will go rogue and screw everyone else.

How would they screw over everyone else? Wouldn't they just buy into a ceiling or sell into a floor? Unless that person more than half the money, I don't see how that would work.

en.wikipedia.org/wiki/Prisoner's_dilemma

Exactly, actually if you know what everyone else is thinking, you can either anticipate the price movement or are doing insider trading.

There's no such thing as insider trading

We're all doing insider trading. We are trading Bitcoins, while we have more knowledge of it than the public at large.

[600watt]

This is what successful traders do.

However, if you try to coordinate different actors to work together at particular price points, eventually someone will go rogue and screw everyone else.

How would they screw over everyone else? Wouldn't they just buy into a ceiling or sell into a floor? Unless that person more than half the money, I don't see how that would work.

en.wikipedia.org/wiki/Prisoner's_dilemma

Exactly, actually if you know what everyone else is thinking, you can either anticipate the price movement or are doing insider trading.

There's no such thing as insider trading

We're all doing insider trading. We are trading Bitcoins, while we have more knowledge of it than the public at large.

that´s the point ! we should start talking about mbtc now, to open cheap ways to participate for all those out there who would love to join, but scared of paying 1600,- $ for "just" 10 btc. mbtc is the future. our future...