BTC at $205? Should I buy into a rally?

[rpietila]

In my opinion that trend line is unsustainable and arbitrary. 10k by jan 2015?  Some unforeseen event(s) of ridiculous magnitude would have to occur. Maybe by 2020. But not by 2015.

No, it isn't. There is only one way to use the least squares method, and it is depicted above. You, on the other hand, seem to pull numbers from your sleeve, and good luck trading systematically with that approach.

How is the squares method not arbitrary?

Please, i don't have time for this. Find out if you honestly don't know. In the thread where this is derived, there are links and all.

Look you have informative posts, but you were also claiming in may that we would be in moderate 4 digits by the end of this year.

What are going say if that trend line falls way off of the mark in 2014?  What reason will you come up with then? That chart is not a "method". It's a supposition.

I meant that you should employ at least the same amount of background work presenting a better alternative, instead of saying that

In my opinion that trend line is unsustainable and arbitrary.

You have been registered for all of 6 weeks, right? It is enough time to form an opinion, but there are already so many of those having an opinion but not backing. This would be much fun if among the 153,000 forum members even 5 would care to research economic matters with the same precision as I do. Woe to the would-be trader that actually cares about your opinions! (Sorry.)

The trendline is constructed of 58 datapoints currently. If the dataset changes, such as when November is added, the trendline is redrawn using the original method. It changes very little to take into account the latest addition. Also if better data is retrieved from the early months.

My earlier attempts of constructing a trendline were defective due to the lack of data from the early days of Bitcoin. That's why you should just discard the Mt.Gox price hand-drawn trendlines unless you have very solid research backing it.

"Unsustainable" is an unmathematical concept, which you apply incorrectly. As recently as 1999 something completely unsustainable did happen in stock market and I lost a fortune. There are actual unsustainables, but they are further away than most believe. Google black swan.

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[BitchicksHusband]

Dude, this guy has more money than you will ever have and he got it by making well-researched investments.  You might be smarter to listen to him rather than argue.

The lack of early data and the April run-up made the least squares method a bit too bullish at the time, but over time it gets more accurate because of more data.  The data says that not only is this sustainable but virtually inevitable.

This is why rpietila tells everyone to buy, buy, buy with whatever you can afford and hold long term no matter how high the price.

[waltermot321]

Yes, buy and sell higher.....

[San1ty]

IMHO bears get what they deserve. OP is left behind and it's his own fault...

[rpietila]

As a newbie I got burned last week with an all-in.

How come you got burned? Did you sell?

Most unsuccessful buys turn successful in weeks, and the rest after a little bit longer time...

[600watt]

As a newbie I got burned last week with an all-in.

How come you got burned? Did you sell?

Most unsuccessful buys turn successful in weeks, and the rest after a little bit longer time...

very right.
even the guys who bought at ath in april (i recall reading a post from someone who put a house loan into the ath) will soon be relieved. that is, if they had the balls and waited.

[rpietila]

had the balls and waited.

"It really really takes the iron balls to wait almost 7 months omg i want it now..."

When bitcoin matures, I consider selling. No signs of maturity yet, so plenty of upside

[Krikke81]

Checking the order status at btce

buying orders for about 1.8 million
Selling about 2200 BTC

1800000/2200 = 820 $/BTC woot

[bitcoinrocks]

The best strategy is to decide on a certain amount you can afford to spend every week on BTC ($20, $100, whatever) and just buy regularly.  That way you'll evenly buy into the lows and the highs and don't have to sweat it so much.

This is what you should do. It is by far the easiest way to be a responsible, risk-reducing bitcoin investor. You gain the large majority of all price rises, while averaging out any short term volatility. I'm surprised this was only the post in this whole thread that gave reasonable advice.

Edit: of course, every so often, your review the long term prospects. You could devise some sort of exit plan based on your outlook, and then adjust as the situation develops. For long term bulls, dollar cost averaging is a great way to invest.

This sounds like it might be right for me.  I'm definitely a long-term bull.  "Selling high" doesn't really make sense to me any time soon.  "Buying low" as much as possible is really what I'm after.  If I have $10K now that I want to put into BTC+altcoins, should I split that up into $200/week or something to take advantage of dollar cost averaging?

[rpietila]

If I have $10K now that I want to put into BTC+altcoins, should I split that up into $200/week or something to take advantage of dollar cost averaging?

Dollar cost averaging does not bring any advantage. I would instruct you to buy as soon as possible, if you think bitcoin is good and confirm that the trend is up.

[MoreFun]

If I have $10K now that I want to put into BTC+altcoins, should I split that up into $200/week or something to take advantage of dollar cost averaging?

Dollar cost averaging does not bring any advantage. I would instruct you to buy as soon as possible, if you think bitcoin is good and confirm that the trend is up.

You bought back after selling 1k at around $135?
Sorry if that wasn't you.

[oda.krell]

In my opinion that trend line is unsustainable and arbitrary. 10k by jan 2015?  Some unforeseen event(s) of ridiculous magnitude would have to occur. Maybe by 2020. But not by 2015.

No, it isn't. There is only one way to use the least squares method, and it is depicted above. You, on the other hand, seem to pull numbers from your sleeve, and good luck trading systematically with that approach.

Really? You just discovered linear regression and suddenly extrapolation from previous data (which is *exactly* what you're doing there) is not arbitrary anymore?

Learn a) your mathematical techniques (that part you seem to have done), and b) the assumptions you make when you employ said techniques.

Note: This says nothing about the validity of your claims. I personally find it the approach useful, and your numbers might well fit the target. But there is abso-fucking-lutely no way around the fact that extrapolation from previous data only works as long as the function generating the data now is (more or less) the same as the function generating the data back then. If you believe that's the case -- fine by me. But it is an assumption.

[rpietila]

If I have $10K now that I want to put into BTC+altcoins, should I split that up into $200/week or something to take advantage of dollar cost averaging?

Dollar cost averaging does not bring any advantage. I would instruct you to buy as soon as possible, if you think bitcoin is good and confirm that the trend is up.

You bought back after selling 1k at around $135?
Sorry if that wasn't you.

I had the intention to sell as part of my strategic sales plan. Instantly afterwards it started to rise, and I did not need all the money, so I bought back with part of the money as part of my speculative portfolio. There is no denying that I lost substantially, but I did not have the knowledge whether it would rise or not.

This incident prompted me to delve deeper into bitcoin's historical prices. Now I will know better, how to time the strategic sales. I would rather sell when bitcoin is minimum 2x above the trendline. Then I have a realistic chance to buy back at half the price. Without the trendline as a basis, this would be very difficult.

[rpietila]

There are several investing styles. Mine has served me adequately.

[Wekkel]

There are several investing styles. Mine has served me adequately.

Until it won't. Not minding your strategy here, but you must be flexible and change strategy accordingly. Bitcoin mainstream adaption is probably still 5 years away. The annual growth factor can slow down in the future.

[oda.krell]

Personally, if I had to chose between dollar cost averaging and following rpietila's buy/sell based on deviation from the uber-trendline, I would go with the latter approach. DCA is simply too conservative for Bitcoin -- you'd lose out on spectacular returns simply because you'd sell into the most wonderful rallies :)

[bitcoinrocks]

Personally, if I had to chose between dollar cost averaging and following rpietila's buy/sell based on deviation from the uber-trendline, I would go with the latter approach. DCA is simply too conservative for Bitcoin -- you'd lose out on spectacular returns simply because you'd sell into the most wonderful rallies

I didn't think DCA called for selling at all.  I thought it was a buy and hold strategy.

The trendline is worrisome to me because it looks like it wouldn't have called for buying in the latter part of 2010, all of 2011, and the beginning of 2012.  That means missing out on a lot.  Or would the line have been sufficiently different then?

I'm starting to think there isn't a better method for BTC than buying as much as you can as quickly as you can and holding for a long time.

[windjc]

In my opinion that trend line is unsustainable and arbitrary. 10k by jan 2015?  Some unforeseen event(s) of ridiculous magnitude would have to occur. Maybe by 2020. But not by 2015.

No, it isn't. There is only one way to use the least squares method, and it is depicted above. You, on the other hand, seem to pull numbers from your sleeve, and good luck trading systematically with that approach.

How is the squares method not arbitrary?

Please, i don't have time for this. Find out if you honestly don't know. In the thread where this is derived, there are links and all.

Look you have informative posts, but you were also claiming in may that we would be in moderate 4 digits by the end of this year.

What are going say if that trend line falls way off of the mark in 2014?  What reason will you come up with then? That chart is not a "method". It's a supposition.

I meant that you should employ at least the same amount of background work presenting a better alternative, instead of saying that

In my opinion that trend line is unsustainable and arbitrary.

You have been registered for all of 6 weeks, right? It is enough time to form an opinion, but there are already so many of those having an opinion but not backing. This would be much fun if among the 153,000 forum members even 5 would care to research economic matters with the same precision as I do. Woe to the would-be trader that actually cares about your opinions! (Sorry.)

The trendline is constructed of 58 datapoints currently. If the dataset changes, such as when November is added, the trendline is redrawn using the original method. It changes very little to take into account the latest addition. Also if better data is retrieved from the early months.

My earlier attempts of constructing a trendline were defective due to the lack of data from the early days of Bitcoin. That's why you should just discard the Mt.Gox price hand-drawn trendlines unless you have very solid research backing it.

"Unsustainable" is an unmathematical concept, which you apply incorrectly. As recently as 1999 something completely unsustainable did happen in stock market and I lost a fortune. There are actual unsustainables, but they are further away than most believe. Google black swan.

Get out of here with all this "newbie" crap. You have no idea how much I have researched or how much I knew BEFORE I registered here. That is weak sauce.

So what? You have 58 datapoints and now you are projecting 10k by Jan 15th 2015.  And you already have excuses about why your datapoints were crappy ass predictors a few months ago. They will be crappy ass predictors again.

You got burnt in 1999. Not surprised. You are wrong again, imo. But only in so much as your prediction on how fast it will rise to 10k. I think we are at least a couple of years away from ease of use and mass adoption (if those things happen).  And I do not think 10k happens until those things are well established. And, listen here, it is my OPINION. But just because you have a squares graph doesn't make your opinion fact, or better researched. Just means you have a graph. A graph that has already predicted poorly.

"Google black swan." Lol. Duh. Why don't you google "candlestick." Stop with your condescension.

[oda.krell]

Personally, if I had to chose between dollar cost averaging and following rpietila's buy/sell based on deviation from the uber-trendline, I would go with the latter approach. DCA is simply too conservative for Bitcoin -- you'd lose out on spectacular returns simply because you'd sell into the most wonderful rallies

I didn't think DCA called for selling at all.  I thought it was a buy and hold strategy.

The trendline is worrisome to me because it looks like it wouldn't have called for buying in the latter part of 2010, all of 2011, and the beginning of 2012.  That means missing out on a lot.  Or would the line have been sufficiently different then?

I'm starting to think there isn't a better method for BTC than buying as much as you can as quickly as you can and holding for a long time.

you're right, my mistake. had a different strategy in mind.

[wobber]

I hope OP did bought at 205 but sold by now or stashed it for years. This bubblepop will go down hard.