Trading 101

[Andrew Vorobyov]

You must understand that these limit buy/sell orders on the exchanges do not mean a lot. It's merely protection from big price fluctuations. They can (will) be deleted when any news arrive. They only good indication for price direction is volume.

If price goes up and volume increase - strong buy signal.
If price goes up and volume decrease - sell signal.

If price goes down and volume increase - strong sell signal.
If price goes down and volume decrease - buy signal.

Hope it helps someone...

[StewartJ]

You must understand that these limit buy/sell orders on the exchanges do not mean a lot. It's merely protection from big price fluctuations. They can (will) be deleted when any news arrive. They only good indication for price direction is volume.

If price goes up and volume increase - strong buy signal.
If price goes up and volume decrease - sell signal.

If price goes down and volume increase - strong sell signal.
If price goes down and volume decrease - buy signal.

Hope it helps someone...

Andrew,

Thanks for the insight. 

I am new to trading and bitcoins.

I have learned lots in the last month by just playing around in Tradehill.

Any additional lessons would be welcome. The fundamentals, buy/sell signals, love that stuff!

Stew

[marvinmartian]

I challenge you to create a strategy using what you suggest below and implement (eg., backtest) it on any major stock market index.  

You might find it harder than you think to make those simple rules work (eg., be correct more often than not).

You must understand that these limit buy/sell orders on the exchanges do not mean a lot. It's merely protection from big price fluctuations. They can (will) be deleted when any news arrive. They only good indication for price direction is volume.

If price goes up and volume increase - strong buy signal.
If price goes up and volume decrease - sell signal.

If price goes down and volume increase - strong sell signal.
If price goes down and volume decrease - buy signal.

Hope it helps someone...

[Andrew Vorobyov]

Unfortunately TradeHill is only one clean place left.

EVERY FUCKING market is being manipulated now by people who are in power to print money..
They can swing it as they want...

Read this for example - http://gccmarketanalytics.blogspot.com/2010/12/dont-fight-fed-especially-when-theyre.html

This is why I love Bitcoin - you can't print money to control it.

The most challenging part will be when we will enter into era of sell short trading for Bitcoin - this will be game changer.

Short selling suppose lending bitcoins and this will be tricky part

[Matarael]

The most challenging part will be when we will enter into era of sell short trading for Bitcoin - this will be game changer.

Oh god, Can you imagine the number of spam posts on the forum.

BITCOINS IS CRASHING> SELL SELL SELL!

[Vandroiy]

So it's guys like you who do these positive feedback loop trend parties. Nice to meet you, I think it's not sane, but if you're on earlier than the others who do it the same way, you may make good money.

But think about those heeding your advice. Volume increases, people follow trend, volume increases further, more people follow trend... SUDDENLY! Volume runs out, trendbreak. Repeat the opposite direction. Welcome to June 12th, where they sell at 11 and then buy at 25. Yeeaaaa, smart.


@marvinmartian: being correct in trend direction "more often than not" is not sufficient for being profitable. Take a simple trend. Everyone knows the direction it's going, yet that doesn't usually help to make money. Because a trend is a trend until it stops, and when it does, it's likely to turn around hard.

More mathematically speaking: change the skew, look at the expectation value -- guess what, no change.

[Ellen Alemany]

More mathematically speaking: change the skew, look at the expectation value -- guess what, no change.

Just to avoid confusion, it is possible to change the skewness without changing the expectation however it is not true in general.

Example: Assume you can always predict the direction of the price, now you can't lose money. Another example is when you're wrong 1/100, if you don't lose 99/100 when that occurs you will make money.

[nmat]

I'm thinking about buying a few bitcoins, but I am new to trading. I took a look at a few charts and, although I know what candle sticks mean, I can't really take any semantic conclusions from them. The last couple of weeks just seem horizontal to me...

So I was wondering if anyone has any suggestions of where to start. Should I study analysis techniques used in forex? Or is the bitcoin market too recent/unstable and I should just go for it with guts or some other made up strategy?

I was thinking of something in the short/medium term (days/weeks).

[AyeYo]

I'm thinking about buying a few bitcoins, but I am new to trading. I took a look at a few charts and, although I know what candle sticks mean, I can't really take any semantic conclusions from them. The last couple of weeks just seem horizontal to me...

So I was wondering if anyone has any suggestions of where to start. Should I study analysis techniques used in forex? Or is the bitcoin market too recent/unstable and I should just go for it with guts or some other made up strategy?

I was thinking of something in the short/medium term (days/weeks).

This market is too unstable, low volume, and easily manipulated to trade reliably.  If you're interested in learning the basics of technical trading, PM me and I'll shoot you a link to a good site.

[Disposition]

why not just share the link so everyone who bother to do research will benefit?

[nmat]

This market is too unstable, low volume, and easily manipulated to trade reliably.  If you're interested in learning the basics of technical trading, PM me and I'll shoot you a link to a good site.

Yes, I'm interested. If you have suggestions, I will gladly hear them

[opticbit]

so what happens when bitcoin margin, shorting and options come in to play?

looks like no naked shorting/options currently, but soon?

[Fireball]

so what happens when bitcoin margin, shorting and options come in to play?

looks like no naked shorting/options currently, but soon?

There is bitoption for options trading already, and we're working on a new trading platform which would support both currency exchange and futures contracts (with margin trading support).