Volatility and Bitcoinica

[wobber]

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?

[OgNasty]

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.

[wobber]

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!

[tvbcof]

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!

I trust that you are going to avoid taking a stool at the poker table until you obtain a good understanding of 'from where the money comes'.

[wobber]

??

[piramida]

http://en.wikipedia.org/wiki/Bid-offer_spread

[BadBear]

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!

Please don't use bitcoinica unless you know how margins, margin calls, and stop loss work.  And don't take advice from people on the forums.  Except mine, in this post at least 

[cypherdoc]

don't put money in Bitcoinica.  when volatility spikes like this in a short squeeze Zhoutong will shoot clients first and you'll be allowed to ask questions later.

he's at risk bigtime since he's an illiquid leveraged market maker with a poor data feed to mtgox just like the rest of us and he'll most likely go down too taking longs with him as well.