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Author Topic: Here we go again, another major price drop for bitcoins  (Read 21522 times)
defxor
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September 01, 2011, 08:58:10 PM
 #141

A lot of trading I have done arbitrages between currencies and exchanges, and on occasion there have been opportunities to take USD1 per BTC out of the market.  Not much to do with chance there - more to do with people, their beliefs and insecurities.
I already pointed out the example of arbitrageurs, but dexfor seems to think what they do is "cheating".  Not exactly sure why.

Can everyone make money on arbitrage?
Is there a guaranteed window of opportunity where you can lock down the trades?

Now go back to the earlier posts I did in this thread and ask yourself why I already back then suggested doing colocated HFT as one way you indeed can make money on a market. It's not however part of what the FA fund managers and TA scam artists claim that a successful trader does when outperforming the market Smiley The so-called "skill" that never turns up in any documented research.
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d'aniel
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September 01, 2011, 09:25:14 PM
 #142

A lot of trading I have done arbitrages between currencies and exchanges, and on occasion there have been opportunities to take USD1 per BTC out of the market.  Not much to do with chance there - more to do with people, their beliefs and insecurities.
I already pointed out the example of arbitrageurs, but dexfor seems to think what they do is "cheating".  Not exactly sure why.

Can everyone make money on arbitrage?
Is there a guaranteed window of opportunity where you can lock down the trades?

Now go back to the earlier posts I did in this thread and ask yourself why I already back then suggested doing colocated HFT as one way you indeed can make money on a market. It's not however part of what the FA fund managers and TA scam artists claim that a successful trader does when outperforming the market Smiley The so-called "skill" that never turns up in any documented research.

Oh, I missed that other rule you've laid out.

Is your argument then that the search for alpha is just so hyper-competitive that only the wealthiest, well-equipped of fund managers will ever get to it first?

If so, I'd still argue differently in the case of markets with capitalizations so small that big-time funds can't play them.
defxor
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September 01, 2011, 09:32:34 PM
 #143

Is your argument then that the search for alpha

No. I'm saying that there's no such thing as "alpha" in FA fund management or TA scams. Do you agree? Your own list of "alpha" examples brought up insider trading, uncovering dirt not known to the larger market etc.

Btw, when you talk to someone who studies actual research papers using terminology from get-rich-quick books doesn't infer a lot of confidence in your argument Smiley

d'aniel
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September 01, 2011, 09:46:26 PM
 #144

Is your argument then that the search for alpha

No. I'm saying that there's no such thing as "alpha" in FA fund managent or TA scams. Do you agree? Your own list of "alpha" examples brought up insider trading, uncovering dirt not known to the larger market etc.

Btw, when you talk to someone who studies actual research papers using terminology from get-rich-quick books doesn't infer a lot of confidence in your argument Smiley


And, as you admitted, arbitrage opportunities.

"Alpha" is a very commonly used, and precisely defined quantity.  That you haven't heard it before doesn't infer a lot of confidence in your argument.

I'm sorry, but this is getting retarded.  I'm out.
defxor
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September 01, 2011, 09:52:16 PM
 #145

And, as you admitted, arbitrage opportunities.

... which only exist if you cheat [colocated HFT], else the only factor deciding whether you're successful in using them or not is "luck", not skill, which is what we're discussing.

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"Alpha" is a very commonly used, and precisely defined quantity

Quantity? Of all the words that's not the one I would've used. But sure, if you want to use that specific definition I would say that available research puts it at 0%.

(Your terminology, "getting to it", made me quite sure you were not using the accepted definition but something dreamt up from someone who indeed knows how to make money off traders. By selling them get-rich-quick books)
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September 01, 2011, 10:12:11 PM
 #146

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This is a ridiculous claim. I make thousands of dollars EVERY WEEK simply by playing the stock market, not to mention the fortune I will make on bitcoin. I'm obviously not going to disclose my methods ( Wink), but I can assure you that it has nothing to do with "random chance". Go into any bookshop and you wil find many books on how to invest... I myself am thinking of writing one. Why would there be so many books on this topic it if it wasn't possible?

There are two sorts of people... Smart guys, who know the system after years of study. And then there's the primitive guys that don't quite follow what's going on. They look at the economy, but it is too complicated for them, so they just think everything happens randomly...

You "make thousands of dollars EVERY WEEK simply by playing the stock market" so assuming as you're so onto a sure thing you would naturaly be also reinvest nearly all your gains & are therefor are getting exponential returns, soon you will own the whole world or perhaps it's just not that simple or scaleable

how many $ thousands per week on average do you make & from risking or playing with just how much capital, without this info & more then "This is a ridiculous claim"


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PatrickHarnett
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September 02, 2011, 02:15:21 AM
 #147

I should have added that most of my trades were not simple arbitrage, but coincident trading definitely helped with some of my profits (that is, I did have opportunities to buy and sell BTC at the same time with large spreads either in the same currency or multi currency).  Not sure why that would have been cheating anyway.  Maybe because I used my brain.

Historically, one of the nice things about analytics is if they work, everyone uses them and the advantage is removed, or else the real world effects get in the way.  Fischer, Blanck and Scholes didn't get rich off their work playing markets, but they did nicely out of their fame as economists/mathematicians.  (a further option is they do work, and no one would publish the info, they'd use it instead).
defxor
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September 02, 2011, 07:49:12 AM
 #148

no one would publish the info, they'd use it instead

Yes, that's the myth. It's also unscientific in that it's not falsifiable.

Not sure why that would have been cheating anyway

It isn't, of course, you just answered it yourself:

if they work, everyone uses them and the advantage is removed

The only way to know (not guess) that your arbitrage trade will result in a profit is however if you cheat. Else you're just lucky in that your trade was executed before someone else's trade. After all, you're not trading based off knowledge no one else has.

FA fund managers and TA scam artists claim that they can beat the market with their "skill". There's no data set, and there have been much research into this topic, that indicates there is such a "skill". If there were, we'd see a skewed bell curve.

bonker
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September 02, 2011, 10:40:49 AM
 #149


You "make thousands of dollars EVERY WEEK simply by playing the stock market" so assuming as you're so onto a sure thing you would naturaly be also reinvest nearly all your gains & are therefor are getting exponential returns, soon you will own the whole world or perhaps it's just not that simple or scaleable

how many $ thousands per week on average do you make & from risking or playing with just how much capital, without this info & more then "This is a ridiculous claim"


There are size limits on any trade, so the exponential returns complaint is false.

There is no chance in trading, you've just got to learn the rules.


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Jack of Diamonds
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September 02, 2011, 02:26:24 PM
 #150


You "make thousands of dollars EVERY WEEK simply by playing the stock market" so assuming as you're so onto a sure thing you would naturaly be also reinvest nearly all your gains & are therefor are getting exponential returns, soon you will own the whole world or perhaps it's just not that simple or scaleable

how many $ thousands per week on average do you make & from risking or playing with just how much capital, without this info & more then "This is a ridiculous claim"


There are size limits on any trade, so the exponential returns complaint is false.

There is no chance in trading, you've just got to learn the rules.

You can't really gain an 'upper' hand in trading without a HFT bot or insider info.
Of course quality access to real-time news feeds & an ability to interpret them helps (if you just buy low & sell short after minor price increases) but that's about it.

Buying stocks is very much chance just as buying bitcoins or any other commodity.

The price is determined only by other sellers and the market can panic at any time.
If you don't have a cutoff where your program automatically attempts selling off all stock you could lose a lot in a short timeframe.

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defxor
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September 02, 2011, 03:43:21 PM
 #151

There is no chance in trading, you've just got to learn the rules.

I'm sorry, but if you want to participate in a serious discussion I suggest you do it from a non-troll account. While I applaud the troll posts you have in your posting history (some of them are really really funny) it's just impossible to take anything you write seriously even if that would suddenly be your intention Smiley

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September 02, 2011, 09:18:41 PM
 #152

There is no chance in trading, you've just got to learn the rules.

I'm sorry, but if you want to participate in a serious discussion I suggest you do it from a non-troll account. While I applaud the troll posts you have in your posting history (some of them are really really funny) it's just impossible to take anything you write seriously even if that would suddenly be your intention Smiley



I agree some of his posts are hilarious.

But, there is no chance in trading.  There may be factors unknown to you, but that does not make it chance.  Everyone is placing conscious bid/sell orders and the bots are running according to algorithms dependent upon set parameters.

The more factors you are aware of, and the more you can understand the interrelationships between these factors simultaneously, your returns will be better.

I said this in another post, but chance in itself is a bogus word.
Saying something is due to chance is saying that acausality caused it.
Even probability theory doesn't rule out causality (e.g. the rate of decay of radioactive isotopes is said to be acausal) because one cannot assume that they can necessarily perceive/understand the logical syntax that guides this unique process.  Just cause you don't understand it doesn't mean it was luck or chance.

And, the Bitcoin market is far from the probabilistic nature of radioactive decay.

defxor
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September 02, 2011, 09:29:31 PM
 #153

But, there is no chance in trading.  There may be factors unknown to you, but that does not make it chance.  Everyone is placing conscious bid/sell orders and the bots are running according to algorithms dependent upon set parameters.

What's the weather going to be like in six days?

(Traders still don't outperform chance. If you want to claim they do, please point to relevant data)

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September 02, 2011, 10:47:42 PM
 #154

Re: what is random and what is not, I would encourage anyone who is interested to learn about modern probability theory (laid out by Kolmogorov in the '30s) and stochastic processes.  One nice thing about this theory is the prominence that conditional probabilities and conditional expectations take.  This allows you to describe 'deterministic' and 'random' as simply two extreme points on a spectrum.  Something is deterministic when conditioned on a large information set, something is random when conditioned on a small information set.  Probabilities are always relative to an information set*.  Something that seems random is actually highly predictable given the right information, and something that appears predictable would have appeared random if you knew a little less.

One person may consider rolling a six being p=16.67%, whereas another person who noticed the die being slightly oblong might consider rolling a six being p=20%.  Another person with a supercomputer and highly accurate motion detectors might see it as p=0% (or 100%, depending on what number his supercomputer spits out).  All three people can be right in their own assignments of probabilities, the different numbers just illustrate that the probability of an event is always with respect to a particular information set.  Two people with different information will assign different probabilities to the same event.  It's not that one is wrong and one is right - they're both assigning the correct probabilities as they see it, it's just that one knows more than the other.  The more you know, the less random things become.

Trading is like that - you have some people who know almost nothing about what's going on..they don't read the news they don't read company reports they don't look at historicals; they don't analyse anything.  You have other people who spend their entire life reading all this stuff and conclude slightly different probabilities for assets rising or falling.

The point here is that the uninformed trader will see everything as random because from his perspective it actually is random.  It's wasn't that mortgage-backed securities actually had an objectively high probability of default as such, it was just that he didn't go out and grab enough information that would have revealed to him a high probability of default.  He sees things go up and down and has no idea why.  He sees some people make money and others lose money and that too looks random.  He sees the smart people who made money betting against subprime and assumes they were just lucky because, after all, this event was pure randomness.  Then he looks to the people who lost money on subprime and says, "well they wore the same pinstripe suits and they worked in the same bank and they drank the same fine wine, so they're clearly indistinguishable from those other guys that made money...hence verifying my position that it's all just random and unpredictable".

If he was uninformed but smart he would realize that while to him things appear indistinguishable from noise, it could be that to people better informed it would be more predictable.  On the other hand if he was closed-minded he might think "well if it appears random to me then it must be genuinely random."

This is the problem here...it's easy for things to look random or unpredictable, you just have to bury your head in the sand and ignore all the information that comes your way.  For things to become predictable you need to do hard work, hence not very popular.

* A good candidate for an absolute probability may appear to be the unconditional probability.  However, for any probability space with measure P you can always embed it in a larger space with a new measure Q that agrees with P in the small space but disagrees outside the smaller space.  So while the unconditional probability looks unique and objective once you've constructed the probability space, if the space had been constructed differently then the unconditional prob would have been different too.
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September 02, 2011, 11:01:28 PM
 #155

I agree some of his posts are hilarious.

But, there is no chance in trading.  There may be factors unknown to you, but that does not make it chance.  Everyone is placing conscious bid/sell orders and the bots are running according to algorithms dependent upon set parameters.

The more factors you are aware of, and the more you can understand the interrelationships between these factors simultaneously, your returns will be better.

I said this in another post, but chance in itself is a bogus word.
Saying something is due to chance is saying that acausality caused it.

Yup, Doctor House expressed this wonderfully in an episode.

Quote
Dr. Cameron: Idiopathic T-cell deficiency?
Dr. House: Idiopathic, from the Latin meaning we're idiots 'cause we can't figure out what's causing it.

Even probability theory doesn't rule out causality (e.g. the rate of decay of radioactive isotopes is said to be acausal) because one cannot assume that they can necessarily perceive/understand the logical syntax that guides this unique process.  Just cause you don't understand it doesn't mean it was luck or chance.

And, the Bitcoin market is far from the probabilistic nature of radioactive decay.

Actually, radioactive decay has a very certain and well understood cause.  Unfortunately, that cause is a quantum effect, so we can't predict it.  And if all of the experiments into J.S. Bell's theorem are right (and they certainly appear to be), we won't ever be able to predict it.  It isn't just that we don't know about the internal wheels and gears inside the particles, it really appears to be that there really aren't any.

At any rate, this isn't the right discussion to be having.  The bitcoin market is chaotic, not stochastic.  Actually, markets in general are chaotic.  Chaotic phenomena are totally deterministic, in principle, but never predictable.

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defxor
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September 02, 2011, 11:03:03 PM
 #156

Trading is like that - you have some people who know almost nothing about what's going on..they don't read the news they don't read company reports they don't look at historicals; they don't analyse anything.  You have other people who spend their entire life reading all this stuff and conclude slightly different probabilities for assets rising or falling.

And they both do equally well/bad in the market, according to available research.

PatrickHarnett
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September 02, 2011, 11:18:55 PM
 #157

catching up to a different timezone, I'm happy to be "lucky" using the information I have on unknown causality.  Knowing the speed of trades helps when placing opposing bets, but that's moot.  I did both Classical and Bayesian stats at uni, but for post grad my Professor was very much the Bayesian school focused.

I was interested to wake up today and see I had sold a block of coins (about 60) around $10.50 when most of the trading was $8.40-$8.50.  I must be truly ignorant to have that happen Smiley
AngelusWebDesign
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September 02, 2011, 11:51:43 PM
 #158

Where did you sell coins for $10.50? Mt. Gox has been trading 8.71 - 8.21 in the past 24 hours.
defxor
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September 02, 2011, 11:58:48 PM
 #159

Where did you sell coins for $10.50? Mt. Gox has been trading 8.71 - 8.21 in the past 24 hours.

http://bitmarket.eu is a good place to sell at a premium. I know because I usually buy at a premium there. There are large differences in price just depending on whether you want to look at trades in USD or EUR.

(Since it's P2P it's difficult to arbitrage though since you get a several day delay)
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September 03, 2011, 02:25:41 AM
 #160

Where did you sell coins for $10.50? Mt. Gox has been trading 8.71 - 8.21 in the past 24 hours.

http://bitmarket.eu is a good place to sell at a premium. I know because I usually buy at a premium there. There are large differences in price just depending on whether you want to look at trades in USD or EUR.

(Since it's P2P it's difficult to arbitrage though since you get a several day delay)


Now, if only bitmarket.eu finally got their Paxum option running, like they said they would Cheesy
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