Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[julian071]

I received a PM asking for some clarification on my trading system. I figured I'd add the reply here, in case others might find it of some interest. First, the question, then the clarification:

Hey!

Sorry to bother you,I'm kind of a trading newbie(just got in the market mid-july) but i'd like to ask a few questions about your trading method.

I've seen that you sell x amount of btc on every 250$ it rises and buy y amount of btc every 250$ it falls.

Could you please explain it further?
 How should I set my buy/sell orders?( With 1BTC as the starting amount for example)

As I got it, it looks something like this:
You have 1 BTC, the price is 10 000$.
Once it hits 10250, you sell 0.1BTC for example
You have 0.9 BTC+ 1025$
BTC price falls back to 10 000$, you buy 1025/10000=0.1025
You have 1.025 BTC
 But what if you sell 0.1 every 250$, price is at 12500$ and you are all in fiat, out of BTC?
If BTC would have a bull run above 12,5k, i'd be sitting on the sidelines all in fiat. Is the solution to this is that you keep using your profits to buy/sell at a higher price scale?

I'd love to hear your opinion or technic on this!

Thanks,

Hi -
You've got the basics. However, you correctly have detected a risk in such trading. If your trades at each increment are a significant percentage of your total holdings, then you risk running out of Bitcoin before the price rises very high. You will run out of Bitcoin when the Bitcoin price is (interval * 1/percentage) + price_at_start.

The solution, of course, is to make your trade at each interval a smaller percentage of your overall holdings.

For example, if you start today to trade one-onethousandth (0.1%) of your base at each interval, you won't run out of Bitcoin until the Bitcoin price is ($250 * 1/0.1%)+~$12000 = ~$262,000.00 per Bitcoin*.

If we ever get that high (I would not be particularly surprised), you'll be selling your last tenth-Bitcoin for $26,200. Not too bad.

*Actually, if you take your profits on the Bitcoin side rather than the $ side, this is a worst-case scenario. The volatility between today and the time we hit $250,000 will result in additional profit in the form of additional Bitcoin. This will extend the upper range at which you will run out of Bitcoin. Will it extend it to $300,000? $500,000? $1M? Interminably? No way of knowing in advance. But safe to assume it will extend it somewhat.

I suggest running out a bunch of scenarios in Excel, playing around with interval, percentage, and volatility profit, and map out a scenario with which you feel comfortable.

I'm not sure whether or not this is the 'best' trading strategy. However, it removes the need to be prescient in where the market is going. As long as the overall direction of the market is up, it will return consistent profits. It can also generate profits in down markets (that's when you build your Bitcoin holdings). It also maximizes return on market volatility. And the Bitcoin market is famously volatile. Most importantly, it is automatic. It removes the mistakes you might make due to overexuberance or panic.

It may be worth mentioning that I leave many open orders on both the buy side and the sell side. This has two benefits:
1) It ensures that quick market moves will not outrun my ability to enter new orders.
2) It reduces my trading costs.
To explain 2) further, exchanges charge a fee for trading - that's how they profit and are able to stay in business. Different exchanges have different pricing structures. Each exchange allocates fees to each side of the trade. This can be allocated to the buyer and seller roles, or it can be allocated to the maker and taker roles. I do this trading at an exchange that charges only the taker side of the deal. Limit orders (the type of orders I enter) are the 'maker' role, so there is no fee for this trade.

Of course, leaving open orders on the exchange requires you having value locked up on the exchange. Many exchanges 'have been hacked' (sometimes probably a synonym for 'owners ran away with everybody's money'), leaving their customers Bitcoin-less. This counterparty risk is something you need to be comfortable with.

Of all the exchanges available to Americans, I trust GDAX the most as far as counterparty risk. Further, their price structure is 'free to maker'. For these two reasons, GDAX is where I do this trading. YMMV.

Thank you! Very clear explanation, helpt a newbie friend with it.

[1714165227]

1714165227

[1714165227]

1714165227

[1714165227]

1714165227

[User705]

I received a PM asking for some clarification on my trading system. I figured I'd add the reply here, in case others might find it of some interest. First, the question, then the clarification:

Hey!

Sorry to bother you,I'm kind of a trading newbie(just got in the market mid-july) but i'd like to ask a few questions about your trading method.

I've seen that you sell x amount of btc on every 250$ it rises and buy y amount of btc every 250$ it falls.

Could you please explain it further?
 How should I set my buy/sell orders?( With 1BTC as the starting amount for example)

As I got it, it looks something like this:
You have 1 BTC, the price is 10 000$.
Once it hits 10250, you sell 0.1BTC for example
You have 0.9 BTC+ 1025$
BTC price falls back to 10 000$, you buy 1025/10000=0.1025
You have 1.025 BTC
 But what if you sell 0.1 every 250$, price is at 12500$ and you are all in fiat, out of BTC?
If BTC would have a bull run above 12,5k, i'd be sitting on the sidelines all in fiat. Is the solution to this is that you keep using your profits to buy/sell at a higher price scale?

I'd love to hear your opinion or technic on this!

Thanks,

Hi -
You've got the basics. However, you correctly have detected a risk in such trading. If your trades at each increment are a significant percentage of your total holdings, then you risk running out of Bitcoin before the price rises very high. You will run out of Bitcoin when the Bitcoin price is (interval * 1/percentage) + price_at_start.

The solution, of course, is to make your trade at each interval a smaller percentage of your overall holdings.

For example, if you start today to trade one-onethousandth (0.1%) of your base at each interval, you won't run out of Bitcoin until the Bitcoin price is ($250 * 1/0.1%)+~$12000 = ~$262,000.00 per Bitcoin*.

If we ever get that high (I would not be particularly surprised), you'll be selling your last tenth-Bitcoin for $26,200. Not too bad.

*Actually, if you take your profits on the Bitcoin side rather than the $ side, this is a worst-case scenario. The volatility between today and the time we hit $250,000 will result in additional profit in the form of additional Bitcoin. This will extend the upper range at which you will run out of Bitcoin. Will it extend it to $300,000? $500,000? $1M? Interminably? No way of knowing in advance. But safe to assume it will extend it somewhat.

I suggest running out a bunch of scenarios in Excel, playing around with interval, percentage, and volatility profit, and map out a scenario with which you feel comfortable.

I'm not sure whether or not this is the 'best' trading strategy. However, it removes the need to be prescient in where the market is going. As long as the overall direction of the market is up, it will return consistent profits. It can also generate profits in down markets (that's when you build your Bitcoin holdings). It also maximizes return on market volatility. And the Bitcoin market is famously volatile. Most importantly, it is automatic. It removes the mistakes you might make due to overexuberance or panic.

It may be worth mentioning that I leave many open orders on both the buy side and the sell side. This has two benefits:
1) It ensures that quick market moves will not outrun my ability to enter new orders.
2) It reduces my trading costs.
To explain 2) further, exchanges charge a fee for trading - that's how they profit and are able to stay in business. Different exchanges have different pricing structures. Each exchange allocates fees to each side of the trade. This can be allocated to the buyer and seller roles, or it can be allocated to the maker and taker roles. I do this trading at an exchange that charges only the taker side of the deal. Limit orders (the type of orders I enter) are the 'maker' role, so there is no fee for this trade.

Of course, leaving open orders on the exchange requires you having value locked up on the exchange. Many exchanges 'have been hacked' (sometimes probably a synonym for 'owners ran away with everybody's money'), leaving their customers Bitcoin-less. This counterparty risk is something you need to be comfortable with.

Of all the exchanges available to Americans, I trust GDAX the most as far as counterparty risk. Further, their price structure is 'free to maker'. For these two reasons, GDAX is where I do this trading. YMMV.

Thank you! Very clear explanation, helpt a newbie friend with it.

Except all of this implies a buy at some sort of relative bottom. If 20k was top and your first buy is in high teens you might just sit and stare at your screen for the next two years.  A good strategy is to also set aside a specific dollar amount to buy into at regular dropping intervals.  So for example every 500-1k drop from 10k you buy x dollar amount.  If it keeps dropping you’ll keep accumulating more and more BTC.  On the way down take profit in BTC on the way up if we get past ATH take profit in fiat.

[OWZ1337]

Making (life changing) profits is nice but it should not be youre main focus. A lot of projects comming oure way to achieve financial freedom.

Fck banksters, Fck goverments, Fck this rotten financial fiat debt slave pyramid ponzi slave system, Fck Roger Ver and his shills.

Bitcoin gives the power back to the people that is by orders of magnitude more important.

^occupy wall street :-D we never forget..we never forgive...expect BTCBTC    haha

[adaseb]

Stumbled upon the Digital Goods section of Bitcointalk and there are people asking 1 BTC for Bittrex, Bitfinex, Poloniex and Binance accounts.

Is it really true that you can't even open an account with any crypto-only exchange these days?


Also stumbled upon my local Craiglist and people asking $400 for an R9 280X and $500 for an R9 290 GPUs. Also people asking $1000 for an Antminer S5.


If so, this bubble is far far away from bursting...

[OWZ1337]

Stumbled upon the Digital Goods section of Bitcointalk and there are people asking 1 BTC for Bittrex, Bitfinex, Poloniex and Binance accounts.

Is it really true that you can't even open an account with any crypto-only exchange these days?


Also stumbled upon my local Craiglist and people asking $400 for an R9 280X and $500 for an R9 290 GPUs. Also people asking $1000 for an Antminer S5.


If so, this bubble is far far away from bursting...

government clamp down is obvious :-D  ~any real money is not going to be poured into anonymous exchanges...stop and think.

[User705]

Stumbled upon the Digital Goods section of Bitcointalk and there are people asking 1 BTC for Bittrex, Bitfinex, Poloniex and Binance accounts.

Is it really true that you can't even open an account with any crypto-only exchange these days?


Also stumbled upon my local Craiglist and people asking $400 for an R9 280X and $500 for an R9 290 GPUs. Also people asking $1000 for an Antminer S5.


If so, this bubble is far far away from bursting...

Gear was never a good indicator.  I remember first ASICS going for 30k on eBay.  Heck some friends even bought a few.  80% of bitcoin has been mined.  It would be hard to deduce anything from ASKING prices anyways.

[R0mi]

http://finance.weissratings.com/crypto/

What do we make of this?

I’ve never heard of Weiss.

Weiss and his father performed independent financial analyses on banks for many years.  They were conservative in their appraisals, and by that I mean that didn't count squishy items like "goodwill" for very much.  They published their own "Weiss ratings" for thousands of banks.  You could check on any single bank you were interested in, or subscribe to their service.  They sold the business but I guess the son still speaks on behalf of the business.  It was a legit business so this interests me.

[jbreher]

Except all of this implies a buy at some sort of relative bottom. If 20k was top and your first buy is in high teens you might just sit and stare at your screen for the next two years.  

I think I understand your point. Yes, if your trading funds are all crypto and no fiat, you need to find some way to fund the buy side.

If you have both Bitcoin and fiat on hand, no problem. You fund the sell side by entering sell orders at your chosen interval, starting at the next interval above the current price. You fund the buy side by entering buy orders at your chosen interval, starting at the next interval below the current price. * Your system is now set up for up market or down market.

Of course, if you don't have fiat to start with, you cannot enter buy orders. If the market first tends down, you get antsy waiting for the price to raise to your first sell.

The solution of course is to sell some Bitcoin at current market price to get fiat to fund the buy side.

Case study: When I set my daughter up on this system, she was starting Bitcoin-rich and fiat-poor. We decided to place about 4% of her total crypto holdings into the trading system. Of this, we sold ~1/3 at market price, and used the resulting USD to fund the buy side. Easy Peasy.

Of course, the buy side funded through this mechanism it was not quite enough to carry the entire December - Jan volatility. She's been in the system, fallen off the low end (all sell orders, no fiat to buy) when the price tanked, back in the system (orders both sides) when the price rebounded, and fallen back off the low end when the price dropped again. Currently waiting for price to again rise to hit her lowest sell in the system.

But in the meantime, she's accumulated some additional Bitcoin**, and even some additional cash profit from when price reversals and human latency led to additional $ profit.

* You need to leave a gap of one interval near the current price. Can be either a missing sell or a missing buy. Think about the first few trades after setting up the system - if you understand the system, you'll see why this is necessary.

** Used to extend where the high side of the system 'tops out' - a sell at the next interval above that previously funded.

[Last of the V8s]

[itod]

Except all of this implies a buy at some sort of relative bottom. If 20k was top and your first buy is in high teens you might just sit and stare at your screen for the next two years.  

I think I understand your point. Yes, if your trading funds are all crypto and no fiat, you need to find some way to fund the buy side.

If you have both Bitcoin and fiat on hand, no problem. You fund the sell side by entering sell orders at your chosen interval, starting at the next interval above the current price. You fund the buy side by entering buy orders at your chosen interval, starting at the next interval below the current price. * Your system is now set up for up market or down market.

Of course, if you don't have fiat to start with, you cannot enter buy orders. If the market first tends down, you get antsy waiting for the price to raise to your first sell.

The solution of course is to sell some Bitcoin at current market price to get fiat to fund the buy side.

Case study: When I set my daughter up on this system, she was starting Bitcoin-rich and fiat-poor. We decided to place about 4% of her total crypto holdings into the trading system. Of this, we sold ~1/3 at market price, and used the resulting USD to fund the buy side. Easy Peasy.

Of course, the buy side funded through this mechanism it was not quite enough to carry the entire December - Jan volatility. She's been in the system, fallen off the low end (all sell orders, no fiat to buy) when the price tanked, back in the system (orders both sides) when the price rebounded, and fallen back off the low end when the price dropped again. Currently waiting for price to again rise to hit her lowest sell in the system.

But in the meantime, she's accumulated some additional Bitcoin**, and even some additional cash profit from when price reversals and human latency led to additional $ profit.

* You need to leave a gap of one interval near the current price. Can be either a missing sell or a missing buy. Think about the first few trades after setting up the system - if you understand the system, you'll see why this is necessary.

** Used to extend where the high side of the system 'tops out' - a sell at the next interval above that previously funded.

I think I understand your system now, thanks for explaining it, appreciated. Have three questions, if you don't mind answering them:

- Assuming you use an exchange with taker/maker fee policy and pay 0 fees, how big is your yearly gain in BTC in percentage?

- Are maker fees given to you by exchange significant in total amount or are they negligible?

- Is this possible to do without a bot? Placing all these orders dependent on the market moves looks like a lot of work to me.

[STT]

http://finance.weissratings.com/crypto/

What do we make of this?

I’ve never heard of Weiss.

Weiss and his father performed independent financial analyses on banks for many years.  They were conservative in their appraisals, and by that I mean that didn't count squishy items like "goodwill" for very much.  They published their own "Weiss ratings" for thousands of banks.  You could check on any single bank you were interested in, or subscribe to their service.  They sold the business but I guess the son still speaks on behalf of the business.  It was a legit business so this interests me.

Nice, seems a positive they would even appraise crypto coming from tradational finance.   That alone seems a pretty big thumbs up.   

[BitcoinNewsMagazine]

January 16 bitcoin price bounced off the weekly 20 MA. You can see this has happened before and the bull market stayed intact.



Bulls snapped up bitcoin under $10,000 as this might be the last time you see four digit bitcoin prices.

[thrax]

https://uk.reuters.com/article/us-global-bitcoin-france-germany/france-germany-to-make-joint-bitcoin-regulation-proposal-at-g20-summit-idUKKBN1F728X?il=0
looks like we're going to have to fight them on the beaches again

Not the beaches again. Grrr. i was kinda hoping for the hills this time.

Germany hasn't had a proper government for ages, and without one it can't implement joint bitcoin regulations, or any other new regulations. France wants to make all sorts of new EU rules, but can't until Germany forms a government. If Germany can't agree on a coalition soon it will have to have another election, and that's likely to end in stalemate again.

[jbreher]

I think I understand your system now, thanks for explaining it, appreciated. Have three questions, if you don't mind answering them:

- Assuming you use an exchange with taker/maker fee policy and pay 0 fees, how big is your yearly gain in BTC in percentage?

Percentage of what? Total holdings? Not much. Amount I have allocated to my 'trading stash'? Much better. It's still not a get rich quick scheme. More of an increment your wealth slowly and steadily. I'm not going to divulge specific numbers further than that which I have already. You can model it in something as simple as Excel using historical data to figure out what you would have made if you had been using it up to now.

- Are maker fees given to you by exchange significant in total amount or are they negligible?

As posted earlier, GDAX charges 0% to the maker. One of the two main reasons I use GDAX for this type of trading. Other exchanges are more suitable for other trading styles.

- Is this possible to do without a bot? Placing all these orders dependent on the market moves looks like a lot of work to me.

Yes, it can certainly be done without a bot. As an existence proof, I do not run a bot. However, in this scheme, my trading is very systematized. It would surely be relatively simple to code up a bot to execute the system. I prefer to run it manually. It requires intermittent attention, but not much effort.

As divulged earlier, I no longer get my panties in a knot if the market moves faster than I do. I have learned it does not have a huge negative impact on results to run it on my own schedule. Mind you, I'd be at the computer for hours each day whether or not I was engaging in this form of trading. If your line of work or your hobbies would interfere with being internet connected most of your waking hours, you might want another form of trading, or a maybe even just bot that you can trust.

[JayJuanGee]

Going down again. The 12k didn't last. Might go now down to 8k according to many forecasts...

Maybe my last limit buy will trigger?
At least until I get some fresh burnable fiat...

Poor d_eddie - you also might not get the opportunity to have such said "last limited buy order" filled in this round of correction(s)   


I'm currently considering up to be 52% and down to be 48%, give or take 1.5% (gotta give myself a bit of leeway, here, in my attempts at Nostradamus BTC price prediction proclamations).

[Torque]

First official e-commerce transaction with Lightning Network? Sounds like it:

https://www.reddit.com/r/Bitcoin/comments/7ras1y/ladies_and_gentlemen_its_official_joe_sixpack/

File this one next to the pair of 10k btc pizzas. 

[Elix9]

First official e-commerce transaction with Lightning Network? Sounds like it:

https://www.reddit.com/r/Bitcoin/comments/7ras1y/ladies_and_gentlemen_its_official_joe_sixpack/

File this one next to the pair of 10k btc pizzas. 

Why only 4 comments? You'd think it would have more attention.

[jojo69]

fake news

[El duderino_]

Breaking 24777$ prediction game      FINAL LIST       

27/12/2017 bikerleszno
29/12/2018 cAPSLOCK 
30/12/2017 digithusiast
31/12/2017 Raja_MBZ
01/01/2018 elg
02/01/2018 wachtwoord
03/01/2018 JimboToronto
04/01/2018 d_eddie 
05/01/2018 BTCMILLIONAIRE
06/01/2018 HanvanBitcoin
07/01/2018 ghandi
08/01/2018 savetherainforrest
09/01/2018 explorer
10/01/2018 bicoinpsycho
11/01/2018 Bitcoinaire
12/01/2018 speedwheel
13/01/2018 undeadbitcoiner
14/01/2018 northypole
15/01/2018 ivomm
16/01/2018 maca068
17/01/2018 bitcoinvest
18/01/2018 last of the v8s
19/01/2018 mfort312
20/01/2018 1982dre
21/01/2018 flamast2
22/01/2018 RealMachasm
23/01/2018 willope
24/01/2018 kartala
25/01/2018 orpington
26/01/2018 rolling
27/01/2018 LFC_bitcoin
28/01/2018 jojo69
29/01/2018 CristiTCM
30/01/2018 rayX12
31/01/2018 realsteelboy
01/02/2018 twocorn
02/02/2018 mancroofer
03/02/2018 True Myth
04/02/2018 poolminor
05/02/2018 itod
06/02/2018 scheptan
07/02/2018 vapourminer
08/02/2018 alexeft
09/02/2018 siera
10/02/2018 AlcoHoDL
11/02/2018 Dunkelheit667
12/02/2018 yonton
13/02/2018 Wekkel
14/02/2018 Thekool1s
15/02/2018 starmman
16/02/2018 Globb0
17/02/2018 leveldkrypto
18/02/2018 olesh
19/02/2018 BitCoinBurger
20/02/2018 Paashaas
21/02/2018 flynn
22/02/2018 icygreen
23/02/2018 erisdiscordia
24/02/2018 phil_s
25/02/2018 sirazimuth
26/02/2018 Arriemoller
27/02/2018 yonton
28/02/2018 Muttley
01/03/2018 bones261
02/03/2018 heater
03/03/2018 soullyG
04/03/2018 InvoKing
05/03/2018 Notme
06/03/2018 sa_94
07/03/2018 NUFCrichard
08/03/2018 Imbatman
09/03/2018 Roombot
10/03/2018 STT
11/03/2018 badream
13/03/2018 erre
14/03/2018 julian071
15/03/2018 podyx
17/03/2018 fragout
18/03/2018 fabiorem
21/03/2018 dakustaking76
23/03/2018 nikauforest
31/03/2018 vroom
01/04/2018 somac.
02/04/2018 kurious
04/04/2018 fluidjax
05/04/2018 bitcoinbunny
08/04/2018 tyler1890
10/04/2018 ludwigvon
11/04/2018 hairymaclairy
16/04/2018 practicaldreamer
18/04/2018 free-bit.co.in
27/04/2018 drbrockoin
01/05/2018 sprinkles
02/06/2018 oblox
07/07/2018 IntroVert
03/08/2018 toxic2040
28/08/2018 bitserve
15/10/2018 Yefi
05/11/2018 mikenz
31/12/2018 melman2002
01/01/2019 Spaceman_Spiff_Original
12/02/2019 FractalUniverse
21/04/2019 gentlemand
20/02/2020 romneymoney
18/12/2021 luckygenough56

UPDATE     AND GOOD LUCK

WONDERING WHERE WE GOING

[TERA2]

The daily shows some modest support but does not show any kind of reversal pattern.