How to predict crash?

[imrer]

How to predict crash in bitcoin price or any bubble in general? It's not all random and some guys seem to guess right when that happen. Any tips or insights?

[fattypig]

How to predict crash in bitcoin price or any bubble in general? It's not all random and some guys seem to guess right when that happen. Any tips or insights?

Well, you can't..

[p2pbucks]

How to predict crash in bitcoin price or any bubble in general? It's not all random and some guys seem to guess right when that happen. Any tips or insights?

I prefer to predict the crash of fiat currency

[Jabbatheslutt]

You can't predict the market trends for certain, but you can make an informed guess.

[imrer]

So how do make a well informed guess with probability of happening over 50%?

[Birdy]

So how do make a well informed guess with probability of happening over 50%?

You read/get the news about some catastrophic event for Bitcoin and react fast.
But you will have to confirm that it's true and that this event most likely has an enormous impact within minutes (more time, if you got this as insider).
That's the only way to reach such a good probability.

[sukiho]

first you need a bubble and I dont think we have one yet

[600watt]

when you find posts here stating that bitcoin has doubled in the last few days faster and faster and that it will take another few days for singularity to occur...

[Roy Badami]

How to predict crash in bitcoin price or any bubble in general? It's not all random and some guys seem to guess right when that happen. Any tips or insights?

It's a game of poker.  It's psychology - you have to guess when everyone else will start selling.  But there's no way to know what everyone else is thinking.  And since by that point everyone knows it's a bubble, sentiment can change very rapidly - once people think the bubble is bursting, they try to get out with their profits, making the crash a self-fulfilling prophesy.

Judging when a bubble will burst is notoriously difficult, and requires a lot of luck - for each person who guessed right there will be a dozen who guessed wrong.

roy

[goxed]

Check the charts on a constant basis.

http://bitcoincharts.com/charts/bitstampUSD#rg360zigWeeklyztgSza1gSMAzm1g7za2gEMAzm2g14zxzi1gUOzi2gMACDzi3gRSIzi4gCCIzvzl

[wopwop]

Use quantum theory

[imrer]

Use quantum theory

Quantum theory? How?

[RationalSpeculator]

So how do make a well informed guess with probability of happening over 50%?

You are asking the right question.

To make a well informed guess you must be well informed. In order to be well informed you must inform a lot. Reading a lot about bitcoin here, on reddit. Be also well informed about the broader economy, cycles, money, banking, markets, politics, psychology, entrepreneurship, investing, innovation, history etc. Ie: a vivid curiosity for knowledge and understanding is required.

Then your probability calculation will be better informed.

Capital allocation strategy is also crucial. It does not make sense to go all out on a probability of only 60% for a correction. Use the Kelly criterion to scientifically calculate how much you should bet on a certain odd.

And learning from your mistakes. When you end up losing money, was your probability calculation correct looking back on it? And did you scale the capital correctly? Or did greed or fear influence your probability estimation or allocation decision?


After you did all that you may decide it ain't worth it and switch to a simple buy and hold.

[Xer0]

then return and post here 

[prophetx]

Proven method

[fattypig]

Proven method

What is this?

[Xer0]

What is this?

Magic 8-Ball

something like that:

[zeroday]

Buy as much bitcoins as possible, then wait a year without looking at charts. After that you will get more profit than those who spend sleepless nights "predicting" crashes and bubbles.

P.S. Even those who bought at $266 in April 2013 will have significant profit a year after if they were patient enough and didn't sell with loss.

[prophetx]

Buy as much bitcoins as possible, then wait a year without looking at charts. After that you will get more profit than those who spend sleepless nights "predicting" crashes and bubbles.

This is good advice.

I wish I could do that but I am a grad student at the moment and my income is rather sporadic so I place orders at way below market value, and wait patiently

[Marbit]

i follow a couple of solid analysts and try to get a feel for the market..... and then since i can't crystal ball, i just do dollar costs averaging and set limit orders up and down to take advantage of price movement.