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

[Erdogan]

Trading works. A trader can be successful, and what is needed, is to be able to anticipate the future. This is the basis of free market capitalism. If you are good at anticipating, you win, if you are bad, you lose. If you consistently lose, you are out out of the game and your capital is transferred to others, who are better. This is how all investing works, and what is to be anticipated, when all is said and done, is the demand for the different consumer goods. If you are good, you take part in forming the capital structure to produce the most consumer goods with the best balance between the different types of consumer goods.

What we the traders and holders do, is to increase the value of bitcoins, therefore we direct capital to the miners, who build the magnificent bitcoin mining network, and to the service companies. We anticipate that this is advantageous for traders of all goods and services, and therefore ultimately advantageous for the consumers.

The method we use to predict, is not important. Charting, fundamentals, logic or feelings, it does not matter any more than the reasons a gene has, when it chooses to mutate into a variant. It doesn't choose, in fact it does nothing consciously, because it has not the capability to think, but still a gene's code  can either adapt and prosper, or die.

Just as with the genes in the nature, you can never declare a final winner. You can declare a tentative winner, by sampling the world's gene pool and find the gene which is most numerous.

In investing, your status is always temporary. You may have a lot of value at a certain point, but the asset that you own, can depreciate. You can sell out, but then you have money, which can still depreciate. And your competitor might in the mean time find a winner asset that appreciate more than your's. That is why capitalists sometimes say, the one who has the most when he dies, wins. But death is also not definitive, because a fortune can outlive one individual, and living a prosperous life in your own psychical understanding of that concept, is also on the scale.

In bitcoin, it is difficult to predict, because it is a fundamentally new thing, and the liquidity on the market is not known. Liquidity here is the ease with which you can sell, or convert to other money or goods. The daytraders or other traders buy and sell, but in the long term they hold, on average, a number of coins which is not changing, and thus does not add real liquidity. You would think that you could easily sell 30K coins over a few weeks, when the daily trade volume is hundreds of thousands of coins. But apparently, that didn't work. The guy with 30K coins might think, when the price was 600, that his wealth was equal to 18 mill USD. But because of low liquidity, he could not convert at that price. Who could have known? Well now we know.

Daytraders could in theory take advantage of the resulting volatility, but they could not know what was in the head of the 30K seller, when and how much he would sell. It is not good enough to know afterwards, you have to know in advance, and I propose that nobody can know the daily variations.

Therefore a daytrader, as opposed to a long time, fundamentalist trader, can not know what he is doing, and his decisions are random, and produce random wins and losses. Now the big point: To be a daytrader, you have to sometimes have fiat, sometimes bitcoin, and sometimes a mix. So when there is a general uptrend, the daytrader is overall only half invested. A long time holder is fully invested. Therefore, a daytrader can not win as much as a holder. In a downtrend he will lose less, but in the long run, we will not have a downtrend. That is the holders prediction.

Some good points in this.

A lot of words, I should have slept instead. Pearls before swine.

[ChartBuddy]

Explanation

[oda.krell]

I'd prefer if a competent member of this community would put a bit more effort before forming convictions, on the other hand.

You're making unwarranted assumptions about my background.

True. There's the other option as well: you've spent enough time and intellectual resources on the topic, but you still arrive at a conclusion that, at least in the extremely reduced way you presented it here ("trading = gambling"), completely misses the mark.

Perhaps it's a matter of semantics, though.

Do you consider a competent poker player a "gambler"? If yes, I'm okay with calling the act of trading that as well: both are (risk controlled) finite resource bets on a stochastic process, based on the limited ability to predict future outcomes of that process.

If, on the other hand, a competent poker player is not a gambler, while a trader is, I would like to hear what makes predictions of the 'poker' process different from predictions of the 'market' process. Or, if both of them are gamblers, but neither of them has a chance to be EV+ in your view, then I'd like to see an explanation of why a competent poker player beats an incompetent time after time, (almost) independent of the cards that have been dealt. Been there myself, lost some money in the process :D

[octaft]

I'd prefer if a competent member of this community would put a bit more effort before forming convictions, on the other hand.

You're making unwarranted assumptions about my background.

True. There's the other option as well: you've spent enough time and intellectual resources on the topic, but you still arrive at a conclusion that, at least in the extremely reduced way you presented it here ("trading = gambling"), completely misses the mark.

Perhaps it's a matter of semantics, though.

Do you consider a competent poker player a "gambler"? If yes, I'm okay with calling the act of trading that as well: both are (risk controlled) finite resource bets on a stochastic process, based on the limited ability to predict future outcomes of that process.

If, on the other hand, a competent poker player is not a gambler, while a trader is, I would like to hear what makes predictions of the 'poker' process different from predictions of the 'market' process. Or, if both of them are gamblers, but neither of them has a chance to be EV+ in your view, then I'd like to see an explanation of why a competent poker player beats an incompetent time after time, (almost) independent of the cards that have been dealt. Been there myself, lost some money in the process

It's a game of skill with an element of chance, which means it's definitely gambling, but the best will get the money in the long-term. I think that could apply to either poker or trading.

[N12]

Bitstamp criminals only have until Thursday to buy and GTFO before funds are seized by the UK.

[Thomas-s]

Shorters about to get destroyed.

[spooderman]

ron paul gif

[oda.krell]

It's a game of skill with an element of chance, which means it's definitely gambling, but the best will get the money in the long-term. I think that could apply to either poker or trading.

That was the point I was trying to make: either 'gambling' is just a way of saying "chance + skill", in which case, it applies to both poker and trading, and I'm okay with that. Or, if 'gambling' is supposed to mean "pure chance" (which is how justusranvier intended it, as far as I can tell), then empirical observations beg to disagree.

[justusranvier]

Do you consider a competent poker player a "gambler"? If yes, I'm okay with calling the act of trading that as well: both are (risk controlled) finite resource bets on a stochastic process, based on the limited ability to predict future outcomes of that process.

If, on the other hand, a competent poker player is not a gambler, while a trader is, I would like to hear what makes predictions of the 'poker' process different from predictions of the 'market' process. Or, if both of them are gamblers, but neither of them has a chance to be EV+ in your view, then I'd like to see an explanation of why a competent poker player beats an incompetent time after time, (almost) independent of the cards that have been dealt. Been there myself, lost some money in the process

Poker is not a pure game of chance in the same way that a slot machine is a pure game of chance. (I've added enough disclaimers about cheating in prior posts, so mentally insert them where appropriate)

I don't know exactly what mechanism makes trading a game of pure chance, but the evidence shows that it must be.

The first way we know is that because if a strategy existed which consistently resulted in EV+, then one single entity could follow it and eventually own the entire market, at which point it's no longer market. Markets continue to exist, therefore no EV+ strategy exists.

The other way we know it's a game of pure chance is because when enough data is collected on the lifetime behavior of all traders, the results are consistent with playing a game of chance, with about the number of outliers one would expect given the sample size (every once in a while 20 random coin flips will come up all heads in a row).

[spooderman]

Is there any gambling which is just pure chance? Russian Roulette? Most gambling refers to activities which are a combination of luck and skill. Things which are mainly skill are referred to as sport if I'm not mistaken.

[hd060053]

look at dat buying pressure on okcoin

[fonzie]

CHOOO CHOOO

[LFC_Bitcoin]

$351.93 on Coinbase right now

[fonzie]

$351.93 on Coinbase right now

Cheap coins, grab em!

[hd060053]

no coins after 2200 left on huobi

[spooderman]

All we have to do is break through the resistance at 360, 370, 380, 390, 395, 400, 410, 420 (blaze it), 430, 440........1100, and then I can miss the opportunity to dump again!

[LFC_Bitcoin]

$353.29 choo choo

[ChartBuddy]

Explanation

[podyx]

Really low volume...

[LFC_Bitcoin]