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

[tclo]

This has been a pet peeve topic of mine and you are ABSOLUTELY RIGHT that it's dumb to just buy and hold if you don't have to.  If you are able to sit and watch the market at any time, it is just a really BAD strategy to just hold no matter what.  Risk and reward changes by the second and sometimes it's obvious you should sell (or buy back).

The most glaring example is the bubble run up to $230.  It peaked and then slowly dropped from there over many hours and if you were sitting there watching it, it would be crazy not to sell. It pretty much dropped in a straight line down over $100 in value. 

Of course if you sell at $200 and buy back at $50, then you end up with 4x as many BTC in the end.  And even if you can't time it perfectly you could easily doubled your position.

Some people say when BTC is $1000, it won't matter what you bought at but of course that is absurd.  IF you end up with 10x as much, it matters and also every dollar counts to some people.

Anyway I would start off by daytrading a small part of your position...say 10 or 20%.  Show your hubby that you can can grow it and also reduce risk and maybe he will go along with the plan.

I suggest you study the basics of technical analysis and charting...just the very basic will do wonders.  Good luck.

[favelle75]

This has been a pet peeve topic of mine and you are ABSOLUTELY RIGHT that it's dumb to just buy and hold if you don't have to.  If you are able to sit and watch the market at any time, it is just a really BAD strategy to just hold no matter what.  Risk and reward changes by the second and sometimes it's obvious you should sell (or buy back).

The most glaring example is the bubble run up to $230.  It peaked and then slowly dropped from there over many hours and if you were sitting there watching it, it would be crazy not to sell. It pretty much dropped in a straight line down over $100 in value. 

Of course if you sell at $200 and buy back at $50, then you end up with 4x as many BTC in the end.  And even if you can't time it perfectly you could easily doubled your position.

Some people say when BTC is $1000, it won't matter what you bought at but of course that is absurd.  IF you end up with 10x as much, it matters and also every dollar counts to some people.

Anyway I would start off by daytrading a small part of your position...say 10 or 20%.  Show your hubby that you can can grow it and also reduce risk and maybe he will go along with the plan.

I suggest you study the basics of technical analysis and charting...just the very basic will do wonders.  Good luck.

Post. Of. The. Thread.  +1

[darkmule]

This has been a pet peeve topic of mine and you are ABSOLUTELY RIGHT that it's dumb to just buy and hold if you don't have to.  If you are able to sit and watch the market at any time, it is just a really BAD strategy to just hold no matter what.  Risk and reward changes by the second and sometimes it's obvious you should sell (or buy back).

The most glaring example is the bubble run up to $230.  It peaked and then slowly dropped from there over many hours and if you were sitting there watching it, it would be crazy not to sell. It pretty much dropped in a straight line down over $100 in value.

This is sort of like saying if you're the best poker player in the world, you should never turn down an option to play against the worst for your whole bankroll.  Most people aren't that person, though, and even the best get unlucky.

Yes, there are good day traders, just as there are good poker players, and some of these consistently make a profit.  However, when you're basically betting on hour-to-hour price shifts, and frequently buying and selling, you don't just have to beat the market.  You have to beat the combined transaction fees from the exchanges as well.  You don't just have to be better than the market, you have to be better than the market plus a constant stream of transaction fees.

This is basically the definition of a negative-sum game.  While those who make infrequent but large transactions also pay fees, they are basically negligible in comparison to the size of the transaction.  When you day trade, this overhead or "rake" becomes exorbitant.  While you only have to be reasonably intelligent to make money in the mid-term or long-term dealing in Bitcoin, which is likely to increase in value for the foreseeable future, you have to be way ahead of the curve to expect to profit as a day-trader.

I sold out some at $170 or so, when the price was spiking, and felt mildly foolish when it went to $266.  But if I'd waited for the peak, I probably wouldn't have even been able to sell when it started crashing, because most of the exchanges suspended trading or were simply too incompetent to maintain their operations with heavy trading (MtGox I'm looking at you).  There was a frenzy of panicked idiots basically trading blind with no reliable ticker value for the commodity.

Note, this is a problem you don't even see in normal day trading, but has happened during both major bubbles because the idiots running the exchanges are basically amateur hour assholes. 

I think in the current situation, being very cautious is better than trying to eke out every last cent of expected value, unless you are the best of the best at day-trading (with BTC this can basically be hour-trading or even minute-trading).  The vast majority of people aren't.

Those who are here and asking for advice almost certainly aren't.  If they were, they wouldn't even care about our opinions.

[supert]

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.

You are correct.

[hugolp]

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.

You are correct.

He is not correct, because if you want to count everything you have to count the people using the exchanges not for day trading, but just as exchanges, which is another flow (in and out) of money.

[Schrankwand]

This is sort of like saying if you're the best poker player in the world, you should never turn down an option to play against the worst for your whole bankroll.  Most people aren't that person, though, and even the best get unlucky.

Well, I would say that the best poker player will often turn that down, considering that the other guy likely does not have any bankroll at all. And then again, using your whole bankroll... apart from a few maniacs, who would agree to that? The crazy australian and the swedish guy that dominates Omaha, those are the only two i could think of...

This is basically the definition of a negative-sum game.  While those who make infrequent but large transactions also pay fees, they are basically negligible in comparison to the size of the transaction.  When you day trade, this overhead or "rake" becomes exorbitant.  While you only have to be reasonably intelligent to make money in the mid-term or long-term dealing in Bitcoin, which is likely to increase in value for the foreseeable future, you have to be way ahead of the curve to expect to profit as a day-trader.

Which reminds me, I think I should get a few programmers and lawyers together for a group and run a startup that creates an exchange...

He is not correct, because if you want to count everything you have to count the people using the exchanges not for day trading, but just as exchanges, which is another flow (in and out) of money.

That is the actual beauty. The in and outflow makes for most of the fun. Day Traders against each other is a war, but the money coming in from the outside is what makes the game interesting.

[Tejsei3]

What about running simulated trades for a day, a week, a month?

It's pretty common advice for anyone entering trading to work on a demo account for a few months before moving to live trading. There are real differences in psychology between a simulated trade and a live trade, but practicing your analysis and evaluating the quality of your decisions with 0 risk seems like a no-brainer.

Here is an article on setting up a forex trading journal: http://www.learntotradethemarket.com/forex-trading-tools/a-forex-trading-journal-to-track-your-trading-performance

Hope this helps. This is a great conversation.

[Schrankwand]

It's pretty common advice for anyone entering trading to work on a demo account for a few months before moving to live trading. There are real differences in psychology between a simulated trade and a live trade, but practicing your analysis and evaluating the quality of your decisions with 0 risk seems like a no-brainer.

I would have another suggestion: Buying a small amount of alt coins.

It is the feeling of "real" money, when playing the LTC/USD or NMC/BTC pair, but you can get in with a substantially low amount of money. I personally started with one litecoin.

I have learnt in poker that even having 4$ on the table in 0.01/0.02 on the table have been vastly different in terms of psychology. I dominated play money and lost my whole bankroll of 50$ within 2-3 weeks when I started out. People get greedy with the tiniest amount

[BitChick]

We were thinking of buying some Litcoins.  We are supposed to be getting a small amount of money back from the Bitfloor account because they closed suddenly.  Have not seen it yet.  Sigh.  Hopefully they follow through.  If they do, it will go straight to LTC.   Knowing our luck, it will be after MtGox adds it and the price will skyrocket before we get in.   Oh well.  We really don't have much cash laying around right now. and it is painful to throw more money in, especially when BTC has been on a wild ride this past month. Granted we could sell BTC but husband wants to buy and hold, as I stated before.

Also, I tried day trading just $20 or so and did not make anything.  In fact, I lost a buck or two.  It is not as easy as it sounds at first glance.  Especially when I accidently put a sell order instead of an ask order on MtGox.  Trading is not for blonds.    Should I tell husband he was right?  He LOVES it when I say that.   

[darkmule]

He is not correct, because if you want to count everything you have to count the people using the exchanges not for day trading, but just as exchanges, which is another flow (in and out) of money.

Which, of course, I did.

This is basically the definition of a negative-sum game.  While those who make infrequent but large transactions also pay fees, they are basically negligible in comparison to the size of the transaction.  When you day trade, this overhead or "rake" becomes exorbitant.  While you only have to be reasonably intelligent to make money in the mid-term or long-term dealing in Bitcoin, which is likely to increase in value for the foreseeable future, you have to be way ahead of the curve to expect to profit as a day-trader.

Using the exchanges just as exchanges, you only pay transaction fees on that exchange, not as in day trading, where you pay the fees again and again and again any time you make a trade, generally in the same commodity.  So instead of only paying fees once or twice, when you cash in or out, you're paying them repeatedly.  This can be hundreds of times in a year, especially if your basic strategy is trying to profit on very short-term trends, which in Bitcoin are often hour-by-hour or even minute-by-minute.

[freedomno1]

Well doesn't hurt to Dollar cost average it for example I was pondering selling at 130 my base is 90 now its dropping back to 100 but thinking back could have bought in at a lower price and then bought out at that higher price a few days back
But I valued my day trading potential gains in total bitcoins over buying at a lower price so it really depends on your preferences.
I don't really plan on selling either so I prefer making day trades.
A Weaker currency means more bitcoins to buy the same thing means deflation helps in the appreciation of net bitcoins if the currency appreciates again you have more bitcoins than before, but selling out for a profit is never a bad idea either my strategy is more risky if the price does not re-appreciate quickly and keeps dropping then my price is high compared to when i bought it. So really depends on your risk tolerance and investment horizon my two cents

[saddambitcoin]

Hi.  I have had some debates with my husband over this.  We have invested several thousand into BTC and he is of the mindset to just "buy and hold." (Unfortunately, we did not purchase them super low.  The average price we paid for them is $120)  I have been trying to convince him that we would be better off trying to sell some, wait for it to drop a little, then we will have the buying power to buy even more if we repeat this a few times.  He thinks we will just get burned and it is better not to play that game.  He said it is like his friends that go to Vegas.  They leave with $2000 then come home with $500 and brag that they won $500, bun in reality they lost $1500.  But I disagree that it is entirely a gamble. I think many of you have seemed to do very will with day trading.  For me, it would be the only way we could increase our small BTC stash since we do not have the money to buy any more. 

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 have increased my BTC holdings by 100% since i first bought litecoins earlier this year. 

my suggestion is to focus on trading alt currencies such as LTC, FTC.  convert a certain percentage of your BTC and diversify, that way you will continue to gain if LTC goes up and BTC goes down, etc. 

[ripple]

With the current volatility in the Bitcoin market, making profits in short-term trading is as easy as taking candy from a baby. 

A word of advice to anyone contemplating short-term trading is to try and forget about making simultaneous profits from long-term investment holding the coins, as the two strategies are generally mutually exclusive, the psychology one will interfere in the strategy needed for the other.

[darkmule]

With the current volatility in the Bitcoin market, making profits in short-term trading is as easy as taking candy from a baby.

If you're good at it, yes.  But for every time someone takes candy from a baby, there's the baby getting the candy taken.  Those are the Greater Fools who bought in at $250, who suck at short-term trading.

Don't be the baby in the equation.

[bitbadger]

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.

It's not just technology that is a risk, there are also a number of other unknowns with Bitcoin.

Government and banking regulations for one.  Competition from other cryptocurrencies - including currencies and systems that havent yet appeared on the scene. Some could potentially have large backers.

Where would this this leave the Bitcoin market? No one knows for sure.

[ABitBack]

One wrong move and you could be waiting for that drop that will never come and you will be left watching bitcoin increase all the while knowing that as it increases, you're loosing money. There is then the mental challenge of either cut your loss or wait for a drop. I did try trading back at ~$18 and lost over $1k (which is a lot to me). I sold and put a by order in which never came.

[bitbadger]

This has been a pet peeve topic of mine and you are ABSOLUTELY RIGHT that it's dumb to just buy and hold if you don't have to.  If you are able to sit and watch the market at any time, it is just a really BAD strategy to just hold no matter what.  Risk and reward changes by the second and sometimes it's obvious you should sell (or buy back).

The most glaring example is the bubble run up to $230.  It peaked and then slowly dropped from there over many hours and if you were sitting there watching it, it would be crazy not to sell. It pretty much dropped in a straight line down over $100 in value. 

Of course if you sell at $200 and buy back at $50, then you end up with 4x as many BTC in the end.  And even if you can't time it perfectly you could easily doubled your position.

thing is how do you know what is the peak and what is the trough position. Easy when it's history, but in real time it's not so clear.

I guess you could recognize a bubble in the March/April appreciation of Bitcoin, but you still have to sell and buy back at the right time, or near enough.

And if you are day trading, you have to have iron determination NOT to re-enter the market when it's still overvalued.

[melvster]

Hi.  I have had some debates with my husband over this.  We have invested several thousand into BTC and he is of the mindset to just "buy and hold." (Unfortunately, we did not purchase them super low.  The average price we paid for them is $120)  I have been trying to convince him that we would be better off trying to sell some, wait for it to drop a little, then we will have the buying power to buy even more if we repeat this a few times.  He thinks we will just get burned and it is better not to play that game.  He said it is like his friends that go to Vegas.  They leave with $2000 then come home with $500 and brag that they won $500, bun in reality they lost $1500.  But I disagree that it is entirely a gamble. I think many of you have seemed to do very will with day trading.  For me, it would be the only way we could increase our small BTC stash since we do not have the money to buy any more. 

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

From a community perspective, it's better to use bitcoins than to hoard them.

To win at day trading you need to either have an edge or to be lucky.

For it to be worth the time is even harder.

To trade technicals a bot will help.

To trade news you'll need to analyse better than the average person.

The best way to get more btc is offer a good or service for them.

I'm on record since november saying btc is on it's way to 1000.  I'm starting to lean towards a 10,000 price target.  But this will only happen if the currency is a living one.

[FeatherLite]

It will be $250.00 by June just be patient.

[BitChick]

It will be $250.00 by June just be patient.

   I so hope you are right!  I keep thinking it should move that direction. 

The question then is do we sell half our stash and then keep the other half and then have no money risked in our BTC?  Then if it drops again buy more?  That is what we are considering.  The only thing I don't like about that is that we end up with less BTC and if it does skyrocket, we will be upset with ourselves for doing that.  It is hard to decide.