Husband does not want me to Day Trade BTC but it works well for some, right?

[favelle75]

I disagree with most here.  Bitcoins were MADE for day trading.  The huge swings in price daily makes it hard NOT to make money. Most of my invesments are "buy and hold" or dividend income stocks on the TSX. They see an average swing of maybe 0.05% oer day of value. Bitcoin, at least on Mtgox swing HUGE...like 5-10%...EASY. That to me screams volatility and not "long-term investment". Day trade that mo-fo and profit on the swings...not the overall value in 20 years.

Yes, this.

If Forex did not exist I would trade BTC.  Its not rocket science to capture a couple percent here and there all day long and make an insane amount of money with BTC.

It trades in a nice wide range with various bands.  The outer band is 50-250.  Then 100-200, and on and on.  Sell at the top of a band when signals confirm, buy on the bounce off the bottom.

Yawn....

Exactly.  Imagine when the REAL money guys get a hold of this stuff.  Right now, its almost too easy just due to the people involved.

[dooglus]

So my question is, have many of you successfully increased your BTC numbers day trading?  And what is your best strategy in doing so?

I've only tried it a couple of times, and I tend to lose.

Most recently I sold at $95 and bought back at $90 for a small profit.

I decided to try it again, sold at $95 again, and then the price went to $120-$140 and hasn't come back down.  So now I can either buy back in at $145 or hold the dollars and wait for the next dip.  But currently the small profit I made on the first trade is totally obscured by the mistake of re-selling just before the price shot up a week or two ago.

[Wardrick]

The bottom line is it's a gamble every time you buy or sell Bitcoins, the markets truly unpredictable. You can't make those kind of risks when you're dealing with a low amount of cash. You could end up rich, or you could end up broke. But there's a much easier place called The Casino that you can do that. The only way I would day trade is with Bots and if I had a lot of money to work with. It just isn't worth the risk especially with a couple BTC you would only be making a few $$ off of every buy and sell.

Its not about the "couple of dollars" its about the total Return on Investment (ROI). If you are playing a small amount and getting 30-40% returns, that is better than anywhere else. GIC's, HISA, and even some blu-chip stocks are only going to give you 2-4% return ANNUALLY. If you can net even 10% returns over a year's time in your Mtgox account, you are coming out ahead of not only all the major indexes, but also most of the world's money managers.

That wasn't my point. You make a few dollars every time you flip the BTC. You won't care about ROI when you lose your entire investment because bitcoins drop 20% instead of jumping 20%. It's not even an investment it's gambling. With stocks you at least can have some idea what's going to happen with them, there is no long-term or even short term pattern with Bitcoins. The only way I would take day trading seriously is if I had a bot and 20+ Bitcoins to trade with, and even then it's going to be hard to combat a loss if they drop suddenly.


I personally will probably never buy a Bitcoin over $120, unless I trade for them. To much risk of it dropping like it always does. Even though it usually re-rises but I'm not looking to wait in some cases weeks to turn a profit, if any.

[darkmule]

The vig charged by the exchanges makes it very likely that it is the exchanges which enjoy the bulk of the profits from day trading.  There are certainly people who do this successfully out there, and with the general trend toward the price going up sharply from time to time, there's probably profit to spread around.

However, the exchanges have a bad record of going down completely during flash crashes, or have periods where people are basically trading blind.

Until this becomes more stable, this is basically gambling.  It's a kind of gambling where the skilled trader has an advantage, probably, but you're gambling on more than the price.  You're gambling that you will be able to sell or buy even if you actually do know what direction the market is going, because the infrastructure, even "trusted" sites like Gox, is very unreliable.  It may go down exactly when you need it to work, leaving you stuck with a mountain of overpriced coin and needing to wait possibly months for it to get back to where you can turn a profit.

I don't think anyone who isn't a fool is risking amounts that would wipe them out and render their investment entirely worthless.  However, you may very well end up underwater for a lengthy period of time if you zig when you should have zagged.

As with all forms of gambling, don't "invest" anything in this way you can't afford to lose.  I still think, though, the worst that is likely to happen is you are knocked out of the game for a while and have to wait for the price to come back around.

[favelle75]

The bottom line is it's a gamble every time you buy or sell Bitcoins, the markets truly unpredictable. You can't make those kind of risks when you're dealing with a low amount of cash. You could end up rich, or you could end up broke. But there's a much easier place called The Casino that you can do that. The only way I would day trade is with Bots and if I had a lot of money to work with. It just isn't worth the risk especially with a couple BTC you would only be making a few $$ off of every buy and sell.

Its not about the "couple of dollars" its about the total Return on Investment (ROI). If you are playing a small amount and getting 30-40% returns, that is better than anywhere else. GIC's, HISA, and even some blu-chip stocks are only going to give you 2-4% return ANNUALLY. If you can net even 10% returns over a year's time in your Mtgox account, you are coming out ahead of not only all the major indexes, but also most of the world's money managers.

That wasn't my point. You make a few dollars every time you flip the BTC. You won't care about ROI when you lose your entire investment because bitcoins drop 20% instead of jumping 20%. It's not even an investment it's gambling. With stocks you at least can have some idea what's going to happen with them, there is no long-term or even short term pattern with Bitcoins. The only way I would take day trading seriously is if I had a bot and 20+ Bitcoins to trade with, and even then it's going to be hard to combat a loss if they drop suddenly.


I personally will probably never buy a Bitcoin over $120, unless I trade for them. To much risk of it dropping like it always does. Even though it usually re-rises but I'm not looking to wait in some cases weeks to turn a profit, if any.

No, you only "lose your entire investment" when Bitcoins drop to $0.  Do you see that happening?  And a loss doesn't actually happen until you sell.  So what if Bitcoin drops $25 in one day when it gains $45 two days later? A paper loss doesn't mean squat. I have dividend stocks that posted loss after loss for 12 straight months....I didn't panic because 1) I was getting dividends and 2) the business model was sound and the stocks eventually rebounded.

If you're the type that freaks out over a 48-hour period, then NO stock trading is good for you.

[Wardrick]

The bottom line is it's a gamble every time you buy or sell Bitcoins, the markets truly unpredictable. You can't make those kind of risks when you're dealing with a low amount of cash. You could end up rich, or you could end up broke. But there's a much easier place called The Casino that you can do that. The only way I would day trade is with Bots and if I had a lot of money to work with. It just isn't worth the risk especially with a couple BTC you would only be making a few $$ off of every buy and sell.

Its not about the "couple of dollars" its about the total Return on Investment (ROI). If you are playing a small amount and getting 30-40% returns, that is better than anywhere else. GIC's, HISA, and even some blu-chip stocks are only going to give you 2-4% return ANNUALLY. If you can net even 10% returns over a year's time in your Mtgox account, you are coming out ahead of not only all the major indexes, but also most of the world's money managers.

That wasn't my point. You make a few dollars every time you flip the BTC. You won't care about ROI when you lose your entire investment because bitcoins drop 20% instead of jumping 20%. It's not even an investment it's gambling. With stocks you at least can have some idea what's going to happen with them, there is no long-term or even short term pattern with Bitcoins. The only way I would take day trading seriously is if I had a bot and 20+ Bitcoins to trade with, and even then it's going to be hard to combat a loss if they drop suddenly.


I personally will probably never buy a Bitcoin over $120, unless I trade for them. To much risk of it dropping like it always does. Even though it usually re-rises but I'm not looking to wait in some cases weeks to turn a profit, if any.

No, you only "lose your entire investment" when Bitcoins drop to $0.  Do you see that happening?  And a loss doesn't actually happen until you sell.  So what if Bitcoin drops $25 in one day when it gains $45 two days later? A paper loss doesn't mean squat. I have dividend stocks that posted loss after loss for 12 straight months....I didn't panic because 1) I was getting dividends and 2) the business model was sound and the stocks eventually rebounded.

If you're the type that freaks out over a 48-hour period, then NO stock trading is good for you.

Obviously that was a figure of speech. I don't panic but if I am up 30% in profit and Bitcoins start to drop I'll sell them and take 10-20% profit instead of waiting for them to drop into the negative profit margin. I'm saying with low amounts of cash it's not worth day trading, because one mistake will mess up your whole business plan. You need more funds to recover from losses once they happen, because they will happen.

[Schrankwand]

So my question is, have many of you successfully increased your BTC numbers day trading?  And what is your best strategy in doing so?

I've only tried it a couple of times, and I tend to lose.

Most recently I sold at $95 and bought back at $90 for a small profit.

I decided to try it again, sold at $95 again, and then the price went to $120-$140 and hasn't come back down.  So now I can either buy back in at $145 or hold the dollars and wait for the next dip.  But currently the small profit I made on the first trade is totally obscured by the mistake of re-selling just before the price shot up a week or two ago.

IF you are daytrading, it does not matter what price you have right now. The only thing that interests you is that the price moves, how far it moves and what signals tend to describe the movement.

Seriously, doesn't matter if it is 140 now and you sold at 95. Lets say you buy in at 133 and sell at 136 with 10BTC in your stock. Thats a 2.2% win right there. Minus 0.6 or 0.2% fees for each transaction. Now let us take this further, if you are at Gox or BTC-E you can carry out orders in ranges that are either just above 0.2 or 0.6%. That means that a buy and sell decision needs to net you more than 0.4% at BTC-E or more than 1.2% at GOX to make a winner. Now look how this market moves all day, and think about it: YOu only need to win 0,1% per trade and with 10 decisions a day, make 7 right ones and have about 0,7% in profits.

Add that up, because it is cumulative, if you do this. Lets say you trade 200 days and have all the time 0.7% profits a day, completely investing all the money you made back in there. 200 days would mean you quadruple the set money.

Right now this is still possible. The bots, that you see, are still in infancy. 1 billion market cap is interesting, but not interesting for major players. The day some crazy guy gets himself a few traders from the London circuit, sets up an investment fund selling 100 million in shares and lets loose on the Cryptocurrency world, this is going to go south.

Last night, a trader manipulated the LTC/USD market all by himself, moving sell walls and buy walls, crushing the value of the Litecoin from 4,18 down to 3,95. He moved a 0,5 million dollar sell wall further and further down, set his buy orders and let wall vanish. Instant profits.
Everyone who bet on the buy orders going down instantly won too, anyone who panic sold (Ridiculously many people) were burned.

So, it really does not matter if you cashed out at 90-95. It does not even matter what course the bitcoin takes. What does matter for a daytrader ios that there is constant movement that can be exploited.

[favelle75]

So my question is, have many of you successfully increased your BTC numbers day trading?  And what is your best strategy in doing so?

I've only tried it a couple of times, and I tend to lose.

Most recently I sold at $95 and bought back at $90 for a small profit.

I decided to try it again, sold at $95 again, and then the price went to $120-$140 and hasn't come back down.  So now I can either buy back in at $145 or hold the dollars and wait for the next dip.  But currently the small profit I made on the first trade is totally obscured by the mistake of re-selling just before the price shot up a week or two ago.

IF you are daytrading, it does not matter what price you have right now. The only thing that interests you is that the price moves, how far it moves and what signals tend to describe the movement.

Seriously, doesn't matter if it is 140 now and you sold at 95. Lets say you buy in at 133 and sell at 136 with 10BTC in your stock. Thats a 2.2% win right there. Minus 0.6 or 0.2% fees for each transaction. Now let us take this further, if you are at Gox or BTC-E you can carry out orders in ranges that are either just above 0.2 or 0.6%. That means that a buy and sell decision needs to net you more than 0.4% at BTC-E or more than 1.2% at GOX to make a winner. Now look how this market moves all day, and think about it: YOu only need to win 0,1% per trade and with 10 decisions a day, make 7 right ones and have about 0,7% in profits.

Add that up, because it is cumulative, if you do this. Lets say you trade 200 days and have all the time 0.7% profits a day, completely investing all the money you made back in there. 200 days would mean you quadruple the set money.

Right now this is still possible. The bots, that you see, are still in infancy. 1 billion market cap is interesting, but not interesting for major players. The day some crazy guy gets himself a few traders from the London circuit, sets up an investment fund selling 100 million in shares and lets loose on the Cryptocurrency world, this is going to go south.

Last night, a trader manipulated the LTC/USD market all by himself, moving sell walls and buy walls, crushing the value of the Litecoin from 4,18 down to 3,95. He moved a 0,5 million dollar sell wall further and further down, set his buy orders and let wall vanish. Instant profits.
Everyone who bet on the buy orders going down instantly won too, anyone who panic sold (Ridiculously many people) were burned.

So, it really does not matter if you cashed out at 90-95. It does not even matter what course the bitcoin takes. What does matter for a daytrader ios that there is constant movement that can be exploited.

EXACTLY.  Its not the price that matters...its the MOVEMENT in price. And getting 0.5-0.7% return on ANY investment per day is unreal.

[supert]

Don't do it unless you are basically a professional or similar standard of experience, self-control and intelligence.

Trading is a zero-sum game and you need to be smarter and more self-controlled than the aggregate of the rest of the participants.

[lowlevel]

I do that (Sell at X and try to buy back lower.) Sometimes it works, sometimes the price goes up and gets away from you... Either strategy is gambling.

The bottom line is it's a gamble every time you buy or sell Bitcoins, the markets truly unpredictable. You can't make those kind of risks when you're dealing with a low amount of cash. You could end up rich, or you could end up broke. But there's a much easier place called The Casino that you can do that. The only way I would day trade is with Bots and if I had a lot of money to work with. It just isn't worth the risk especially with a couple BTC you would only be making a few $$ off of every buy and sell.

Perhaps I wasn't clear.. but I meant 'day-trade to make gains'  as the first risky strategy, and buy and hold as the other risky strategy. Both are gambling.

[favelle75]

I do that (Sell at X and try to buy back lower.) Sometimes it works, sometimes the price goes up and gets away from you... Either strategy is gambling.

The bottom line is it's a gamble every time you buy or sell Bitcoins, the markets truly unpredictable. You can't make those kind of risks when you're dealing with a low amount of cash. You could end up rich, or you could end up broke. But there's a much easier place called The Casino that you can do that. The only way I would day trade is with Bots and if I had a lot of money to work with. It just isn't worth the risk especially with a couple BTC you would only be making a few $$ off of every buy and sell.

Perhaps I wasn't clear.. but I meant 'day-trade to make gains'  as the first risky strategy, and buy and hold as the other risky strategy. Both are gambling.

Exactly.  Buying and holding an unknown commodity/currency is VERY risky.  And IMO, more risky than day trading it.

[darkmule]

Exactly.  Buying and holding an unknown commodity/currency is VERY risky.  And IMO, more risky than day trading it.

I'm not sure what the reasoning on this is with Bitcoin.  What's going to cause it to go down long-term unless something actually breaks the entire technology?  If you know much about the technology involved, you know that's very, very unlikely to occur.

[sgravina]

Your husband is right.  Nobody does well with day trading.

A winning trade is actually to your detriment because then you think you have a way to make money.  You keep at it till you lose and you end up losing more than you bet.  This happens to everyone.  It happened to me.

Bitcoin is not a safe bet.  Trading it makes it a guaranteed loss.


On the positive side.  Spouses can be very lucrative.  My wife made me sell several hundred bitcoins at about $250 each.  I paid off my daughter's student loans with that.  I made far more money working with my wife than I ever would have made trying to trade.  Then again even this was not easy.  We bought those bitcoins at about $20 way back in June of 2011.  We sat on a huge loss for over 18 months.  Then, almost without our noticing it, the price bounced into the hundreds, I finally agreed to sell when I could not think of any reason whatsoever for the world to throw so much money at bitcoins day after day.

[darkmule]

Your husband is right.  Nobody does well with day trading.

Saying "nobody" is kind of an exaggeration.  But okay, not much of one.  Successful day traders are pretty rare. 

I think a much more sensible investment strategy is to hold in the middle or long-term, and sell at a good price point.  Where "day trading" might come in is if you manage to sell at the high and the price crashes.  Then it is a good idea to buy back in at the bottom and, again, hold for a while.  This is partly my personal preference, because I just don't have time to sit around all day watching the ticker.

Also, the exchanges all seem to have serious stability problems during high volume trading, something that will have to be fixed.

[darkmule]

Trading is a zero-sum game and you need to be smarter and more self-controlled than the aggregate of the rest of the participants.

I believe once you count the exchange fees, trading is actually a negative-sum game.

It's only zero-sum if you consider the exchanges a "player" in the game.  I don't.  I consider them a house taking their rake.

[IveBeenBit]

You should learn to listen to your husband.

[Amitabh S]

Avoid day trading. I am 10 btc poorer from day trading

[bitleif]

Simple solution: split the money in two. You control one half, he controls the other. The one who wins the most gets to tease the other one afterwards  

[phillyj]

I don't trade BTC, but I do trade stocks. When I got into a few years ago, I read up on day-trading, long-term trends, market psychology, etc. I came to conclude that day-trading is much too risky. I assume that if I trade properly, I might get at least 10% ROI over a long period of time. By day-trading, I am putting much more on the line and I will greatly lose profits. Not worth it to compete against computers.

I say hold it. I also suggest you set an escape price or sell price at which you are comfortable. People who double down usually lose much more. And the more lemmings that sell off, the greater the price will fall. Might want to check out some books on market psychology to see the stupid things we do.

[jimhsu]

In general, if you have to ask, then no.

Having traded for over a decade on the (real) markets though, I will say that the cryptocurrency markets are more similar to the pre-2000 markets during the Internet bubble than today's algo-controlled markets. Much more directional, less (relative) churning, etc. It's a refreshing change of pace from the stock markets of today where robots fight over fractions of a penny and ignore everything else (in fact, "noise" is actually a weapon used by Wall street firms to confuse other firms), in part because exchanges that exist today suck too much for millsecond-trading platforms to possibly function at all.

Here's a nice picture of the crap the modern-day (human) traders have to deal with. Glad I'm no longer daytrading. http://www.metamute.org/editorial/articles/destructive-destruction-ecological-study-high-frequency-trading http://www.zerohedge.com/news/charting-unprecedented-hft-driven-rise-intraday-trading-volatility