Buy on the Way Up or on the Way Down

[EuSouBitcoin]

Do you prefer to buy on the way up or the way down? I prefer to buy on the way up. Since BTC has been in an intermediate down trend, I haven't been buying. If the trend can stabilize and turn back up, then I'll be a buyer.

[EuSouBitcoin]

Buying several times on the way up give you an unrealized gain. Buying several times on the way down gives you an unrealized loss. I prefer unrealized gains to unrealized losses. That's why I buy on the way up and not on the way down.

[wobber]

Can you please explain with more details for a n00b?

[EuSouBitcoin]

If you buy on the way down you would have bought
100 BTC at $9
100 BTC at $8 and
100 BTC at $7
At that point the price of BTC is $7, you are long 300 BTC with an average cost basis of $8 and an unrealized loss of $1 per BTC or $300 total.

If you buy on the way up, you'd buy
100 BTC at $5
100 BTC at $6 and
100 BTC at $7
At that point the price of BTC is $7, you are long 300 BTC with an average cost basis of $6 and an unrealized gain of $1 per BTC or $300 total.

If you don't know where the price is going, I include myself in this category, then it's better to be a trend follower and wait for an uptrend to buy. That way you'll have the smallest position when the price is moving against you and the largest position when it has recently moved in your favor. This is basic trend following, anti-martingale strategy.

[EuSouBitcoin]

Trend is still down. Don't buy now unless you like getting run over by a freight train.

[S3052]

or.. you miss the train and need to pay a much higher price to catch up...

[ama]

Do you prefer to buy on the way up or the way down? I prefer to buy on the way up. Since BTC has been in an intermediate down trend, I haven't been buying. If the trend can stabilize and turn back up, then I'll be a buyer.

You should bye when the trend is up (to cash out profit later, selling when it's higher) and sell when the trend is down (to make your profit or minimize your loses), don't you?

[Cluster2k]

The trend is your friend.

Piling into bitcoins and buying on the way up to $30 was an easy way to make money.  Just don't be the greatest fool holding the bag.  That's the name of the game: dump your hot commodity or stock before everyone else wakes up and dumps their's.

Bitcoin could well shoot up 100% within a month.  But will it do so from $4 or $2?  That's anyone's guess.

[ama]

Bitcoin could well shoot up 100% within a month.  But will it do so from $4 or $2?  That's anyone's guess.

Wait and see when the signals of trend up appear.  The first coin should be made by others.   

[grod]

or.. you miss the train and need to pay a much higher price to catch up...

The only ones with a NEED to buy are those who shorted on bitcoinica with a 5:1 margin.   They deserve their loss.  The rest of us can hedge our BTC sales by buying mining hardware if we choose to.  It's just that I feel there are way too many bitcoin bulls for $4.20 to be anything but a resistance level.

Besides, why do I care if I used to buy at $3 to sell at $3.30 and it jumps to $100 overnight?  I'll just buy at $100 to sell at $110.  Buy and hold is a *horrible* strategy in a bear market.

[BadBear]

or.. you miss the train and need to pay a much higher price to catch up...

The only ones with a NEED to buy are those who shorted on bitcoinica with a 5:1 margin.   They deserve their loss.  The rest of us can hedge our BTC sales by buying mining hardware if we choose to.  It's just that I feel there are way too many bitcoin bulls for $4.20 to be anything but a resistance level.

Besides, why do I care if I used to buy at $3 to sell at $3.30 and it jumps to $100 overnight?  I'll just buy at $100 to sell at $110.  Buy and hold is a *horrible* strategy in a bear market.

Exactly.  Need to keep moving if you wanna keep up.  Just buying and leaving them sitting there isn't a good idea at this stage.  I won't be going all in until I see clear signs of a reversal (and not just another bounce).  Market like this means time to play, lot of opportunity to make money still. 

[Crypt_Current]

The OWS movement has begun accepting donations in BTC.  Just wanted to remind everyone of that / inform anyone who didn't already know.

[grod]

Exactly.  Need to keep moving if you wanna keep up.  Just buying and leaving them sitting there isn't a good idea at this stage.  I won't be going all in until I see clear signs of a reversal (and not just another bounce).  Market like this means time to play, lot of opportunity to make money still. 

IMO going "all in" is another horrible strategy.  TA, which you appear to practice, is simply a way of estimating probabilities of direction over timeframe.  If you go all in and you're wrong you have no outs.   A single fundamental event outside your control could destroy your ability to play another hand. 

In other words, that poker-inspired strategy is just as bad as buy-and-hold in a bear market.  Of course, nothing is as bad as a 100% all-in falling knife catch, but I don't believe anyone is dumb enough to do that.

[BadBear]

Exactly.  Need to keep moving if you wanna keep up.  Just buying and leaving them sitting there isn't a good idea at this stage.  I won't be going all in until I see clear signs of a reversal (and not just another bounce).  Market like this means time to play, lot of opportunity to make money still. 

IMO going "all in" is another horrible strategy.  TA, which you appear to practice, is simply a way of estimating probabilities of direction over timeframe.  If you go all in and you're wrong you have no outs.   A single fundamental event outside your control could destroy your ability to play another hand. 

In other words, that poker-inspired strategy is just as bad as buy-and-hold in a bear market.  Of course, nothing is as bad as a 100% all-in falling knife catch, but I don't believe anyone is dumb enough to do that.

You're right, the traps can be tricky.  I'll have to sit down and seriously think about my breakpoints and my limits.  I don't see a full reversal happening until after the holiday season so I haven't put much thought into it yet.  

[Crypt_Current]

What the heck is an OWS movement?

http://tinyurl.com/3jbp7yl

Jagged!  XD I'll be using this...

[Crypt_Current]

What the heck is an OWS movement?

http://tinyurl.com/3jbp7yl

And what is behind that link?

Oh grow up, just click on it.

[Crypt_Current]

What the heck is an OWS movement?

http://tinyurl.com/3jbp7yl

And what is behind that link?

Oh grow up, just click on it.

Grow up? An anonymous user on a forum posts a link with no identifying inforamtion and no text explaining what it is, I think it is a valid time to be concerned that the link may be nefarious.

It's EXTREMELY nefarious.  I died from clicking on it.

[ineededausername]

What the heck is an OWS movement?

http://tinyurl.com/3jbp7yl

And what is behind that link?

Oh grow up, just click on it.

Grow up? An anonymous user on a forum posts a link with no identifying inforamtion and no text explaining what it is, I think it is a valid time to be concerned that the link may be nefarious.

It's EXTREMELY nefarious.  I died from clicking on it.

I hate lemonparty...

[dree12]

What the heck is an OWS movement?

http://tinyurl.com/3jbp7yl

And what is behind that link?

http://preview.tinyurl.com/3jbp7yl
TinyURL offers a handy "preview" feature.

[OgNasty]

What the heck is an OWS movement?

http://tinyurl.com/3jbp7yl

And what is behind that link?

An anonymous user on a forum posts a link with no identifying inforamtion and no text explaining what it is, I think it is a valid time to be concerned that the link may be nefarious.

Sorry Peter.  That is just a link that shows you how to Google your question.  It was meant as a joke.