Never used Bitcoinica and I don't understand how it works. If the prices are on a clear trend, can Bitcoinica make profit? Because if it's clear for even the most outsider that bitcoin price rises, he buys and waits. Profit comes. Then stop, and redo.
How does this works?
The spread between buy and sell prices is how Bitcoinica makes money. It's like paying a 0.05btc fee every time you make a trade.
The from where do the money come?
If I know bitcoin will be 4, and I buy at 3.10 (with breakeven at 3.20) and I put in 100 dollars (500, with 1:5 leverage) then I'll ear a lot!