Why didn't you sell?

[sgbett]

Meh. You know (cause I told you already ), your posts get a lot of respect from me, sgbett. This one is no different, 95% insightful, but a sweeping line like "TA is apophenia" is just, no offense, dumb. Might as well claim particle physics is like predicting lottery numbers -- just because the process is stochastic doesn't mean there are no patterns.

sorry for my sweeping and somewhat misleading statement - you are right the truth is more complicated I agree - but I had to keep it simple for this very special case.

what I should have said is 99% of traders are 100% lucky. 1% of traders are only 49% lucky - they are 'the house' so to speak.

This is interesting as it sheds light on some of the nuances the OP doesn't really see.

Well..  There were several different types of wagers described in your post. A few of them were completely negative expected value bets. For example the old lady at the slot machine. That bet is expected to lose over the long term. You also mentioned poker, horse racing, and of course timing the market. These three all have a -EV for most and a +EV for a few. You can win money at poker.

In fact it is how I built my bitcoin stake slowly over the last 2 years. I am NOT A extraordinary poker player by any means except I am able to combine bankroll management with some skill at low stakes to win over the long term.

Similarly market traders can do this successfully if they are knowledgeable disciplined and lucky. I imagine trading Bitcoin is like skiing Mount Everest. There are many opportunities hiding in this arena for those who are skilled. But more than half the game is knowing when not to play. This is true for poker as well as trading Bitcoin. And just like poker the vast majority of traders would be unsuccessful and in a market like this one get their asses handed to them. So congratulations to all of us dumb buy and hold idiots to use Jays words. Congratulations to us for knowing to stay out of the game.

One thing you learn to do after a million poker hands or so, is spot a fish.

OP is a fish.  I'd welcome him at my table any time.

+5 Insightful

I am an awful poker player. I know exactly what I should do, but I go ahead and do whatever I feel like doing. I am great at bankroll though and so I have loads of fun because I lose exactly what I knew I was going to

Like the old lady at the slots, I am paying to be entertained, and there is no harm in that, unless you don't know that is what you are doing.

[piramida]

All the factors were pointing out that money could be made when it happened, and I'm glad some users too advantage of it.

The only time this stops being complete bullshit is when you are able to publish your trades in some thread, about the time when they happen, not three days after. Without that, your hindsight is not at all interesting or entertaining. But the reality is a bitch, and once you start publishing your actual trades, you won't open threads like this one In fact I don't think you would've even seen BTC at 1200 as you'd been completely wiped out of the game five times by now.

[JayB]

The thing is the reality is that its more like 50% of the time you will be right and 50% you will be wrong

There's a difference between making money 50% of the time and losing the other 50%, and being right 50% of the time and wrong 50% of the time. You are confusing things my friend.

If you pick a stock randomly today and predict it will go up in the next hour without gathering much information about it, you'll have 50% chance being right and 50% chance being wrong. Now if you not only make that prediction but also put money into it, you'll have less than 50% chance of making money and more than 50% chance of losing money. Why? simply because you have to incur other costs in the process (i.e. transaction costs) and so you can only make money once the stock goes to a price beyond = (price when you invested + transaction costs + other costs).

The 50-50% odds you are giving would probably apply to the movement of a random stock in the market today, all else constant.

Now if on the other hand you pick a stock that is affected by a recent news (just like Bitcoins after the Chinese government's news) there will be more than a 50% chance the stock in question will go down in value if the news is negative and more than a 50% it will go up in value if the news is positive. I would confidently say the stock will go down at least 90% of the time if the news is negative and  up at least 90% of the time if the news is positive. Now off-course this will not go on infinitely, there's a time window when this will occur (but that's another topic).

So you tell me, if that's the case and it's that simple, then why don't most people make money trading right after news come out? there are a couple of reasons:
1- They find out about the news or act upon it once its too late (once the value adjustment has been made), and this happens much more quickly in mature market like the NASDAQ or the NYSE.
2- They perform the trade at the right time but the transaction costs offset the possible gain they can be making in the process. Why?
   - Because in mature markets stocks are less volatile and so move in a lower magnitude than new markets. That is to say that while Bitcoin might lose 40% of its value to a negative news, for a mature company the loss in value might be 1 or 2%, and so the transaction costs are high compared to the gain they could be making, which on average would cancel out the gains that are made in the process.

The reason to the above explanation has to do with an economic phenomena that says the following: In a system where there are enough players, and where information is equally available to everyone at the same time, opportunities cancel out. It doesn't mean that opportunities don't exist at all, it just means that opportunities don't exist on the long term. Meaning that if you are among the fastest 1% of people who short the stocks of a company after bad news, then you can make money in the process, but you can't beat the market all the time. Sometimes you'll beat the market and sometimes the market will beat you, and so on average it's a zero sum game.

This is why they say mature markets are efficient. Efficient in the sense that as long as money can be made, new players will join until the market reaches equilibrium (gains = losses).

What's different about trading Bitcoin? The only and most significant difference is that the economic conditions discussed earlier STILL don't apply. Meaning that not enough players are playing the game, or not enough players have access to information. By not enough players I mean, an amount of players that is not sufficient for opportunities not to exist. Those opportunities may disappear if more players join and the market becomes more liquid and less volatile. But for the time being, it's not the case. And this exactly, is why I said actively trading (in a rational way) might work in your favor for now ( because equilibrium is not reached yet).

[sgbett]

Ugh, you are totally off topic with the trading fees argument. That has little to do with the point I'm making.

I'm going to draw a comparison here with the diet industry.

In the 1980's the USDA published guidelines about what comprises a healthy diet.

30 years later and in the face of overwhelming evidence against what they recommend at the time university educated nutritionists still recommend a 'balanced' diet based on those principals. Such that the foundation is bread and cereal.

Obesity, type II diabetes, metabolic syndrome are running rampant. The nutritionists have tried everything to justify why their food pyramid can't be wrong. They just can't see the glaring truth that people should eat plant matter first and foremost (vegetables). Everything else sparingly.

You remind me of those nutritionists, university educated, smart enough yes, but so sure of what you have been taught being 'true' that you refuse to think for yourself.

Time and time again in this thread people have spelled out the folly in trying to trade based on such naive heuristics as 'the china news was bad, so I would have sold'. I gave you an unlikely, but yet quite possible scenario in which you could lose badly and you ignore it. Instead telling me all about how you can find out the news before anyone else, know exactly how that news is going to affect the market, and then trade accordingly.

The news does not move markets, people move markets, and people are hard to predict. If people are hard to predict, then you are better off using something else. Even elliot waves is better than trying to trade the news!

I ask you this - how do you know the china news was bad, did you know that as soon as you read about it (because to me it looked good) or are you only able to tell us that after the fact because there was a sell off. Did you read about it before the market moved, or was the market already moving? If it was how far had it moved, do you still have time to make the trade, how did you know it wasn't going to reverse sharply?

Have you not noticed that every day the financial news is full of post-hoc rationalisation about why the market did this or that today. Its all written *after* stuff happened. At best you get semi-predictive news, written by somebody from an organisation that has a vested interest in trying to influence market sentiment one way or another. Much like you are doing now.

Was the silk road news bad, it certainly looked it, turns out the market rallied after that little bombshell. How is the fed taper going to affect the PM market? What's the news coming out of switzerland going to do to the price? Why are we already closing back in on $1000 is it a dead cat bounce or the next leg up? Was it the keiser report that explained the run up in LTC, or the interest in china, if it was china what caused them to pick it up? Do the chines watch the keiser report? how do you explain the subsequent NMC rise, a count that was so badly broken it looked to be going to zero.

Most of all I would like to know what on earth sparked the 2000% ANC rally on nov 22nd? I was just hours away from having some serious coin in that, bitcoin was flat, I put in a buy just under market price expecting it to fill, I came back the next day and 90% of my order hadn't filled (at least I got that tenth!), instead it had tripled overnight. What should I have done at that point? (I actually just bought what I could and had to be satisfied with the smaller position, because I believe ANC brings something new to the alt coin scene - here I go pumping it up eh!) Anyway god knows what triggered the rise - perhaps it was my buy order? Bitcoin was flat (for bitcoin) that day. Maybe a dog barked in Sweden?

Why the rise in FTC on the 30th, and why the subsequent retreat? Do you know? I don't but I was able to acquire more BTC through rebalancing and still retain a significant amount of FTC.

I watched all of these happening, I watch a lot of alt coins all the time, its starting to prove more profitable than my day job. I'm mostly in BTC but I also have a little bit of various other coin that I think might be contenders. I read the news and watch the charts but I don't pretend to believe that I have enough information to be able to 'trade' the way you describe it. I gently rebalance my portfolio, I look to mitigate risk, I massage the numbers to keep the ship on course. I do not chase the pennies. I let the coin do the work, and when it has appreciated according to the plan, I sample its fruit. I do *not* chop down the tree thinking a bigger one will grow!

This (to me) is reality, its about preservation of capital, acting rationally, keeping cool through the lunacy of the whole thing. I wasn't old enough to be part of the dot com boom and bust, but this is comparable, maybe even bigger.

I survived through the practical application of knowledge gained from being in various markets for some years. Equities, leverage trades, options. I had successes, which seemed to be perfectly understandable because the markets did exactly what they signs said they would do. I patted myself on the back. The losses, were excruciating, because the markets, they did exactly the opposite of what they said they were going to do - but only just enough to stop you out, before going on to do exactly what you "knew" they were going to do I was convinced that TA worked... and it does, until it doesn't. It was round that time when I read talebs work. This is what changed my stance on TA. I can see how it works, and I can see that if you have enough resources and are quick enough you can gain an edge, but the stress and time for the gains (with limited capital, you can only make limited gains) it just doesn't add up. So I had to unlearn everything I knew. Now I am like those annoying ex smokers, that cough and splutter in public at the merest whiff of a cigarette. No really, I *am* one of those annoying ex-smokers

Then, more specifically with BTC I learned through the stress of trying to work the $1-$32 bubble, and the anguish of what to do in the months that followed, how the charts didn't behave like they 'should' how nothing seemed to make sense.

This experience taught me so much about bitcoin, and more importantly about myself, what my greed and fear looked like, how they affected me. Why I did the things I did. Only then was I able to confidently instigate a plan, and to have the patience to execute it without fear that it is wrong. Everyone else in the world might think its wrong for them, but my plan is exactly right for me. This is when we come back to the notion that some random on the internet can come along and try and tell me "I should have done X": utter horse manure.

University teaches you a lot, I won't deny it but the most important thing is not to know stuff, but to know when you don't know stuff. I have to keep learning, I know I don't know shit about what is going on, and that is powerful, because that knowledge allows you to develop a plan that doesn't really on knowing what is essentially unknowable. So far, its all going swell, I am delighted to be me right now. Something I am not so sure I could have confidently said 5 years ago.

Seriously go ahead and try to trade! Or, save yourself some money by just posting what you *would* do if you had 100 BTC, as people in this thread have invited you to. See how it goes. I think sometimes the only way one really find out how hot the plate is, is by touching it yourself.

I'll start:

With my 100BTC my first move will be to move it all to an offline wallet, and wait.

IF anyone else wants to play along feel free

[Keyser Soze]

snip

Very well said.

[cAPSLOCK]

snip

Very well said.

Unfortunately it will likely be deemed 'dumb'. :-)

[PenAndPaper]

I'm just saying you can gain EVEN MORE by just using your common sense to take advantage of volatility (opportunities).

I think it takes something more than common sense to successfully daytrade. Just look all those ridiculous wannabe daytraders that  are posting random graphs and consider that technical analysis.

[Xer0]

cuz i dont hold btc except of one

[JayB]

Ugh, you are totally off topic with the trading fees argument. That has little to do with the point I'm making.

I'm going to draw a comparison here with the diet industry.

In the 1980's the USDA published guidelines about what comprises a healthy diet.

30 years later and in the face of overwhelming evidence against what they recommend at the time university educated nutritionists still recommend a 'balanced' diet based on those principals. Such that the foundation is bread and cereal.

Obesity, type II diabetes, metabolic syndrome are running rampant. The nutritionists have tried everything to justify why their food pyramid can't be wrong. They just can't see the glaring truth that people should eat plant matter first and foremost (vegetables). Everything else sparingly.

You remind me of those nutritionists, university educated, smart enough yes, but so sure of what you have been taught being 'true' that you refuse to think for yourself.

Time and time again in this thread people have spelled out the folly in trying to trade based on such naive heuristics as 'the china news was bad, so I would have sold'. I gave you an unlikely, but yet quite possible scenario in which you could lose badly and you ignore it. Instead telling me all about how you can find out the news before anyone else, know exactly how that news is going to affect the market, and then trade accordingly.

The news does not move markets, people move markets, and people are hard to predict. If people are hard to predict, then you are better off using something else. Even elliot waves is better than trying to trade the news!

I ask you this - how do you know the china news was bad, did you know that as soon as you read about it (because to me it looked good) or are you only able to tell us that after the fact because there was a sell off. Did you read about it before the market moved, or was the market already moving? If it was how far had it moved, do you still have time to make the trade, how did you know it wasn't going to reverse sharply?

Have you not noticed that every day the financial news is full of post-hoc rationalisation about why the market did this or that today. Its all written *after* stuff happened. At best you get semi-predictive news, written by somebody from an organisation that has a vested interest in trying to influence market sentiment one way or another. Much like you are doing now.

Was the silk road news bad, it certainly looked it, turns out the market rallied after that little bombshell. How is the fed taper going to affect the PM market? What's the news coming out of switzerland going to do to the price? Why are we already closing back in on $1000 is it a dead cat bounce or the next leg up? Was it the keiser report that explained the run up in LTC, or the interest in china, if it was china what caused them to pick it up? Do the chines watch the keiser report? how do you explain the subsequent NMC rise, a count that was so badly broken it looked to be going to zero.

Most of all I would like to know what on earth sparked the 2000% ANC rally on nov 22nd? I was just hours away from having some serious coin in that, bitcoin was flat, I put in a buy just under market price expecting it to fill, I came back the next day and 90% of my order hadn't filled (at least I got that tenth!), instead it had tripled overnight. What should I have done at that point? (I actually just bought what I could and had to be satisfied with the smaller position, because I believe ANC brings something new to the alt coin scene - here I go pumping it up eh!) Anyway god knows what triggered the rise - perhaps it was my buy order? Bitcoin was flat (for bitcoin) that day. Maybe a dog barked in Sweden?

Why the rise in FTC on the 30th, and why the subsequent retreat? Do you know? I don't but I was able to acquire more BTC through rebalancing and still retain a significant amount of FTC.

I watched all of these happening, I watch a lot of alt coins all the time, its starting to prove more profitable than my day job. I'm mostly in BTC but I also have a little bit of various other coin that I think might be contenders. I read the news and watch the charts but I don't pretend to believe that I have enough information to be able to 'trade' the way you describe it. I gently rebalance my portfolio, I look to mitigate risk, I massage the numbers to keep the ship on course. I do not chase the pennies. I let the coin do the work, and when it has appreciated according to the plan, I sample its fruit. I do *not* chop down the tree thinking a bigger one will grow!

This (to me) is reality, its about preservation of capital, acting rationally, keeping cool through the lunacy of the whole thing. I wasn't old enough to be part of the dot com boom and bust, but this is comparable, maybe even bigger.

I survived through the practical application of knowledge gained from being in various markets for some years. Equities, leverage trades, options. I had successes, which seemed to be perfectly understandable because the markets did exactly what they signs said they would do. I patted myself on the back. The losses, were excruciating, because the markets, they did exactly the opposite of what they said they were going to do - but only just enough to stop you out, before going on to do exactly what you "knew" they were going to do I was convinced that TA worked... and it does, until it doesn't. It was round that time when I read talebs work. This is what changed my stance on TA. I can see how it works, and I can see that if you have enough resources and are quick enough you can gain an edge, but the stress and time for the gains (with limited capital, you can only make limited gains) it just doesn't add up. So I had to unlearn everything I knew. Now I am like those annoying ex smokers, that cough and splutter in public at the merest whiff of a cigarette. No really, I *am* one of those annoying ex-smokers

Then, more specifically with BTC I learned through the stress of trying to work the $1-$32 bubble, and the anguish of what to do in the months that followed, how the charts didn't behave like they 'should' how nothing seemed to make sense.

This experience taught me so much about bitcoin, and more importantly about myself, what my greed and fear looked like, how they affected me. Why I did the things I did. Only then was I able to confidently instigate a plan, and to have the patience to execute it without fear that it is wrong. Everyone else in the world might think its wrong for them, but my plan is exactly right for me. This is when we come back to the notion that some random on the internet can come along and try and tell me "I should have done X": utter horse manure.

University teaches you a lot, I won't deny it but the most important thing is not to know stuff, but to know when you don't know stuff. I have to keep learning, I know I don't know shit about what is going on, and that is powerful, because that knowledge allows you to develop a plan that doesn't really on knowing what is essentially unknowable. So far, its all going swell, I am delighted to be me right now. Something I am not so sure I could have confidently said 5 years ago.

Seriously go ahead and try to trade! Or, save yourself some money by just posting what you *would* do if you had 100 BTC, as people in this thread have invited you to. See how it goes. I think sometimes the only way one really find out how hot the plate is, is by touching it yourself.

I'll start:

With my 100BTC my first move will be to move it all to an offline wallet, and wait.

IF anyone else wants to play along feel free

You just earned my respect (not that you need it but well...)

But it is an answer of this caliber that others have failed to say, and instead gave me all sort of nonsense.

I agree it might not be obvious at times how a stock will move following news. For me at least it was obvious the Chinese government's announcement would have a negative impact on Bitcoin, and this is usually true for all announcements based on facts and not just talk. Sure there might have been other "noise" going on in the market but noises usually cancel each other out. There's always the news that makes it to the headline (i.e. company missing estimates, or government banning something), that is more significant than the others, the one based on facts.

Reason why I don't own Bitcoins is because I don't have enough money to buy a quantity that makes me excited about this whole thing. Let alone not being able to buy because of the country I live in (few are the people who own Bitcoins here and its difficult to buy it from an online platform).

[MAbtc]

I sold 80% of my coins between 1100-1200. Picked up some coins on this crash but almost all out now. Really hoping that I didn't miscall this bull trap....

[sgbett]

You just earned my respect (not that you need it but well...)

Nice of you to say, I'm honestly truly just looking out for other people, maybe I'm wrong. Who knows. I think mostly everybody on here is the little guy, I like to see the little guy do well.

Reason why I don't own Bitcoins is because I don't have enough money to buy a quantity that makes me excited about this whole thing. Let alone not being able to buy because of the country I live in (few are the people who own Bitcoins here and its difficult to buy it from an online platform).

I started with $100, its all I could afford at the time and all I felt I could risk.

The biggest risk I think today is having no BTC if it goes mainstream. YMMV.

[Jutarul]

Reason why I don't own Bitcoins is because I don't have enough money to buy a quantity that makes me excited about this whole thing. Let alone not being able to buy because of the country I live in (few are the people who own Bitcoins here and its difficult to buy it from an online platform).

I started with $100, its all I could afford at the time and all I felt I could risk.

The biggest risk I think today is having no BTC if it goes mainstream. YMMV.

Seconded. JayB's line of thinking is the reason why most people are stuck in financial dependence. It's part of the despair to not even do the little things which lead the path to prosperity.

addendum: There are two ways to accumulate bitcoin. The trading and the mining...

[PenAndPaper]

I sold 80% of my coins between 1100-1200. Picked up some coins on this crash but almost all out now. Really hoping that I didn't miscall this bull trap....

I see some people trying hard to find some bullish news to compensate for the china crisis. I 'm talking about the news from the swiss parliament.
That makes me suspicious.

[BitChick]

Many people panicked after the shut down of Silk Road and sold their coins.  The rebound was really fast though and then many had to buy in at a higher price and ended up with less coins. The China situation could have had the same response. Nothing is a sure thing with BTC.

For some of us with BTC in cold storage, it is a bit time consuming to get coins on exchanges.  Then the risk of trading them is a bit daunting.  It is not a guarantee that the price will drop much.  For those of us that do not want to end up with more fiat then BTC it is just not worth the risk.  We are thinking long term here.  To end up with $10,000 or more in fiat now would be stupid if the BTC we sold is worth $100,000 in a few months.  It is way less risky to just buy and hold.

And you have to understand that Bitchick came to this realization after daytrading .5 BTC for several months and ending up with...  .48 BTC.

Once you try it OP, you'll see just how "easy" it is.  I did buy and hold 2 more BTC this weekend since the price was significantly under $1000 and it's probably my last opportunity to do so.

Um it is .36 now after a few more bad attempts to increase my small holding trading.    I did not even try to gain some of my losses back during this past week.  I have learned my lesson the hard way and as hard as it is say, BitChicksHusband was right yet again.  Sigh.  That is more painful then the lost .14 coin!

[checkers6676]

good things come to those who hold

[traderCJ]

For those who had Bitcoins right before the Chinese Government's announcement this week and didn't sell them right after the announcement, why didn't you? I'm just curious.

Now I can think of 4 possibilities:

1- You thought the price will go back up and so got hold of your Bitcoins --> Very bad decision
...snip

It did, and you were wrong.  Even if it goes to 0 tomorrow, for many, holding was the right decision because now they can probably cash out higher than they would have been able to from a panic sell.  Arrogant prick.

[Soros Shorts]

I sold a bit at around 1100 to buy Christmas gifts but left the rest of my coins in a cold wallet intact.

Why? I've traded long enough to know that it takes a considerable amount of effort and skill to time the markets consistently. A little bit of luck along the way helps too. I see Bitcoin as a long term thing, and I have other things going on in life that prevent me from focusing on short term Bitcoin trading. I am still holding on to coins that have gained well over 10,000% since I first mined/bought them in 2011. I don't feel the need to attempt to capture the odd 60% extra gain every time there is a crash.

[favelle75]

Reason why I don't own Bitcoins is because I don't have enough money to buy a quantity that makes me excited about this whole thing. Let alone not being able to buy because of the country I live in (few are the people who own Bitcoins here and its difficult to buy it from an online platform).

I started with $100, its all I could afford at the time and all I felt I could risk.

The biggest risk I think today is having no BTC if it goes mainstream. YMMV.

Seconded. JayB's line of thinking is the reason why most people are stuck in financial dependence. It's part of the despair to not even do the little things which lead the path to prosperity.

Its also the attitude that prevents most people from investing in general. And it perpetuates the cycle of personal financial instability.

[oda.krell]

Meh. You know (cause I told you already ), your posts get a lot of respect from me, sgbett. This one is no different, 95% insightful, but a sweeping line like "TA is apophenia" is just, no offense, dumb. Might as well claim particle physics is like predicting lottery numbers -- just because the process is stochastic doesn't mean there are no patterns.

sorry for my sweeping and somewhat misleading statement - you are right the truth is more complicated I agree - but I had to keep it simple for this very special case.

what I should have said is 99% of traders are 100% lucky. 1% of traders are only 49% lucky - they are 'the house' so to speak.

Coming back here to quote this paragraph. If you don't mind, I'm going to refer to it in future discussions about whether trading is profitable or not (this topic always come up, with great regularity, often disguised as "Does TA work or not.").

You found a great way to summarize and give an answer to the discussion, as it contains both the observation of trading critics (that most people lose money actively trading btc), while acknowledging that there is in fact a way to make a long-term profit trading for a rather small subset of traders.

So the real question remaining, that everyone has to ask him or herself, is: am I 'the house', or am I a gambler if I'm honest with myself

[CoinCidental]

Meh. You know (cause I told you already ), your posts get a lot of respect from me, sgbett. This one is no different, 95% insightful, but a sweeping line like "TA is apophenia" is just, no offense, dumb. Might as well claim particle physics is like predicting lottery numbers -- just because the process is stochastic doesn't mean there are no patterns.

sorry for my sweeping and somewhat misleading statement - you are right the truth is more complicated I agree - but I had to keep it simple for this very special case.

what I should have said is 99% of traders are 100% lucky. 1% of traders are only 49% lucky - they are 'the house' so to speak.

Coming back here to quote this paragraph. If you don't mind, I'm going to refer to it in future discussions about whether trading is profitable or not (this topic always come up, with great regularity, often disguised as "Does TA work or not.").

You found a great way to summarize and give an answer to the discussion, as it contains both the observation of trading critics (that most people lose money actively trading btc), while acknowledging that there is in fact a way to make a long-term profit trading for a rather small subset of traders.

So the real question remaining, that everyone has to ask him or herself, is: am I 'the house', or am I a gambler if I'm honest with myself

in any bitcoin deal i would have to say  your the gambler rather than " the house"

"the house  " is more likley to be the btc exchanges as in they have all the power once they have your money or your btc
or both