is NOT realized until the asset is cashed out.
Bitcoin *IS* cash.
So much of this. Bitcoin is better cash than fiat even.
Come on folks, each one has his Ultimate Object of Desire, and "realizes the gains" when he gets hold of that.
If your goal is dollars, you have "realized" when you converted to dollars. If your goal is gold, you "realized" whe you exchanged the dollars for gold. If your goal is marriage, you "realized" when you exchanged the gold for marriage.
The ad said 4 oz gold for my new Hungarian wife
I think the idea is to buy when the price is going down and to sell when the price is going up..
Actually, the idea is to buy when the price is about to go up and to sell when it is about to go down.
(But, admittedly, there are practical difficulties in the implementation of that theoretical principle.
)
YES... the practicality of real world prediction gets in the way.
In this regard, NO one really wants to sell at $500, for example, and then in the next few days the price goes up 50% (to $750) or some other large amount. Also, NO one really wants to buy at $500 and then the price goes down to $250 in the next few days.. Therefore, a lot of people end up staggering their buys and their sells in order to approximate some kind of systematic skill in their best guesses... some guess better than others and some have more money than others to throw at the situation.
Financial market prices have momentum, quite like physical objects affected by the natural Laws governing motion, velocity, etc. The momentum is caused by the fact that the market isn't a perfectly balanced equilibrium, where sellers share an exact consensus with buyers about when & at which prices to transact, change trends, etc. If it was so, it would be because there is no greed, no fear, no psychology involved in the market's trades - as soon as asset prices reached the 'agreed-upon' level, there would be a massive sell-off, propelling prices down to agreed-upon lows where everyone would buy back at in freakish harmonious sync.
But as we all know, that's not how markets work. So thanks to human psychology, price movements exhibit what appears as 'inertia', 'momentum', causing a successful trader to require judicious patience & balance when trying to time when to exit & enter positions - you can't just press SELL the minute it's reached a decent high price. It won't stop there. Chances are it'll keep going back & forth in a small range, as people who get scared (of missing out on locking-in their nice profit then & there) get off the bus, yet are balanced by other, late-comers who suddenly wake up to the scent of "OMFG the price moved so much I wanna get on the bus too WAIT FOR ME". Then, after a variable length of time, it will finally retrace, where you would expect to make your profit (having sold high). When buying, same concept, it'll take some time to 'slow down' after having dropped for a while, as more & more people panic and/or get in on some greedy shortsell positions, in a price-fall-accelerating effect before it can finally run out of bear steam & retrace up.
What this means is you don't actually, in fact, want to buy when 'it's going down' & sell when 'it's going up'. You can have more trust in the self-evident price discovery mechanism of traded markets than that. Rather, you'd want to buy
after it's mostly done going down as can reasonably be expected from market conditions, and sell
after it's mostly done going up. One should not need to stagger trade entries & exits THAT much, which I find to be more of a hindrance on important 'clarity' (to be able to make the most clear, effective decisions) of acct / trading management than anything. Ideally one could stagger 1-3 buy entries & 1-3 sell exits, seperated by relatively large price %'s, given that
price movement momentum will cause them to get hit more often than not. In investment management, it is more valuable to spread out your diversification & risk losing on 'price opportunity' & 'focus of investment opportunity' both in terms of the variety of assets invested into, and of the price of entries/exits taken on them, than it is to try to unrealistically maximize one's profit potential by being too greedy/too hasty in the spread of staggered price points which dramatically raises risk.
It's also essential to make the distinction between
market price fundamentals and
bitcoin infrastructure/technology fundamentals. All those great news about ever-expanding merchant services & integration don't really affect the exchange price. It's announcements about legal/tax/developments regarding the exchanges themselves that have been near-singlehandedly affecting the exchange prices, as well as news in general from china ; and not all the 'Crypto is the Future of Money' headlines.
Poll
