Bitcoin Forum
December 08, 2016, 06:28:01 PM *
News: To be able to use the next phase of the beta forum software, please ensure that your email address is correct/functional.
 
   Home   Help Search Donate Login Register  
Pages: « 1 2 3 4 5 6 7 8 [9] 10 11 12 13 14 15 16 »  All
  Print  
Author Topic: How many of you have been Zhoutonged?  (Read 24884 times)
zhoutong
VIP
Hero Member
*
Offline Offline

Activity: 490


View Profile WWW
December 21, 2011, 02:18:19 AM
 #161

Let me get this correct... So when the price spiked up and people were trading on Mt.Gox at $4.5,  Zhoutong's genius matching algorithm put the buy price at a $1 spread and force liquidate people's position at $4.9 Huh??  Angry

So when all these forced buy bitcoins are actually bought in Mt.Gox market at any price around $4.1-4.5, the all difference goes into Bitcoinica's pocket?

I've been Zhoutonged good!!!

Can you send an email to support@bitcoinica.com about this? We'd like to compensate you on this.

While it's true that our algorithm sets the price by balancing and predicting the benefit and the risk, after all the trading, there's no point of predicting, and we can clearly see that the prediction was wrong. So we are perfectly okay to refund you the "unexpected profit" we made from you.

I hope this explanation makes sense.

to be honest, i don't see any explanation as to why or how you determined "unexpected profits".


If we liquidated the customer's assets at $4.50 but we charged the customer $4.90 for it, I would say $0.35-$0.39 should be the unexpected profit.

On the other hand, if the customer's assets shouldn't be liquidated at the price of $4.50 instead of $4.90, the better solution is to reverse it.

Founder of NameTerrific (https://www.nameterrific.com/). Co-founder of CoinJar (https://coinjar.io/)

Donations for my future Bitcoin projects: 19Uk3tiD5XkBcmHyQYhJxp9QHoub7RosVb
1481221681
Hero Member
*
Offline Offline

Posts: 1481221681

View Profile Personal Message (Offline)

Ignore
1481221681
Reply with quote  #2

1481221681
Report to moderator
1481221681
Hero Member
*
Offline Offline

Posts: 1481221681

View Profile Personal Message (Offline)

Ignore
1481221681
Reply with quote  #2

1481221681
Report to moderator
1481221681
Hero Member
*
Offline Offline

Posts: 1481221681

View Profile Personal Message (Offline)

Ignore
1481221681
Reply with quote  #2

1481221681
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1481221681
Hero Member
*
Offline Offline

Posts: 1481221681

View Profile Personal Message (Offline)

Ignore
1481221681
Reply with quote  #2

1481221681
Report to moderator
1481221681
Hero Member
*
Offline Offline

Posts: 1481221681

View Profile Personal Message (Offline)

Ignore
1481221681
Reply with quote  #2

1481221681
Report to moderator
cypherdoc
Legendary
*
Offline Offline

Activity: 1764



View Profile
December 21, 2011, 04:42:55 AM
 #162

Let me get this correct... So when the price spiked up and people were trading on Mt.Gox at $4.5,  Zhoutong's genius matching algorithm put the buy price at a $1 spread and force liquidate people's position at $4.9 Huh??  Angry

So when all these forced buy bitcoins are actually bought in Mt.Gox market at any price around $4.1-4.5, the all difference goes into Bitcoinica's pocket?

I've been Zhoutonged good!!!

Can you send an email to support@bitcoinica.com about this? We'd like to compensate you on this.

While it's true that our algorithm sets the price by balancing and predicting the benefit and the risk, after all the trading, there's no point of predicting, and we can clearly see that the prediction was wrong. So we are perfectly okay to refund you the "unexpected profit" we made from you.

I hope this explanation makes sense.

to be honest, i don't see any explanation as to why or how you determined "unexpected profits".


If we liquidated the customer's assets at $4.50 but we charged the customer $4.90 for it, I would say $0.35-$0.39 should be the unexpected profit.

On the other hand, if the customer's assets shouldn't be liquidated at the price of $4.50 instead of $4.90, the better solution is to reverse it.

how did your algorithm make this mistake?
zhoutong
VIP
Hero Member
*
Offline Offline

Activity: 490


View Profile WWW
December 21, 2011, 08:12:46 AM
 #163

Let me get this correct... So when the price spiked up and people were trading on Mt.Gox at $4.5,  Zhoutong's genius matching algorithm put the buy price at a $1 spread and force liquidate people's position at $4.9 Huh??  Angry

So when all these forced buy bitcoins are actually bought in Mt.Gox market at any price around $4.1-4.5, the all difference goes into Bitcoinica's pocket?

I've been Zhoutonged good!!!

Can you send an email to support@bitcoinica.com about this? We'd like to compensate you on this.

While it's true that our algorithm sets the price by balancing and predicting the benefit and the risk, after all the trading, there's no point of predicting, and we can clearly see that the prediction was wrong. So we are perfectly okay to refund you the "unexpected profit" we made from you.

I hope this explanation makes sense.

to be honest, i don't see any explanation as to why or how you determined "unexpected profits".


If we liquidated the customer's assets at $4.50 but we charged the customer $4.90 for it, I would say $0.35-$0.39 should be the unexpected profit.

On the other hand, if the customer's assets shouldn't be liquidated at the price of $4.50 instead of $4.90, the better solution is to reverse it.

how did your algorithm make this mistake?

At the point of $4.50, there were a lot of forced liquidations, stop orders and market buy orders, and there's almost no depth beyond the price until $4.90. So the algorithm decided that the price should be set at $4.90 to minimize the risk for Bitcoinica based on the actual situations.

Then there are sell orders and price decreased, so the algorithm relaxed and lowered the spread. And the previous high were proven wrong.

It's important to know that currently we always have a chain of forced liquidations, because forced liquidations will push the price to trigger more forced liquidations. We will just make sure that they are fully hedged in the market and the prices are reasonable.

Founder of NameTerrific (https://www.nameterrific.com/). Co-founder of CoinJar (https://coinjar.io/)

Donations for my future Bitcoin projects: 19Uk3tiD5XkBcmHyQYhJxp9QHoub7RosVb
caston
Hero Member
*****
Offline Offline

Activity: 720



View Profile WWW
December 21, 2011, 11:33:57 AM
 #164

This is why trading options is better than shorting. With option trading, your loss is limited and you don't get margin calls.

Bitcoin is so volatile that some random spike is likely to wipe out a leveraged short position.  With an option, you only care what the price is when the option matures.

Bitcoin doesn't have options, of course. 

Options recently came out on vircurex.

18jL18iH96BBhwUCQn27FQp7ocodSxvJAB
cypherdoc
Legendary
*
Offline Offline

Activity: 1764



View Profile
December 23, 2011, 11:07:06 PM
 #165

It's important to know that currently we always have a chain of forced liquidations, because forced liquidations will push the price to trigger more forced liquidations. We will just make sure that they are fully hedged in the market and the prices are reasonable.

so how do you define "reasonable"?

no offense but your business model is doomed.  especially since mtgox, the major exchange, is going to be offering similar hedging options.  you will always be one step behind them in reacting to volatility as they will be the HFT and you will be the retail equivalent.

not to be mean but i think you're offering to reverse trades for those customers wiped out in the last ramp b/c if you don't your client base will never return and you need to keep them alive and in the game.

this is going to keep happening over and over again. 
smickles
Sr. Member
****
Offline Offline

Activity: 446



View Profile WWW
December 23, 2011, 11:20:18 PM
 #166

This is why trading options is better than shorting. With option trading, your loss is limited and you don't get margin calls.

Bitcoin is so volatile that some random spike is likely to wipe out a leveraged short position.  With an option, you only care what the price is when the option matures.

Bitcoin doesn't have options, of course. 

Options recently came out on vircurex.
wow, really?

zhoutong
VIP
Hero Member
*
Offline Offline

Activity: 490


View Profile WWW
December 25, 2011, 06:03:10 AM
 #167

It's important to know that currently we always have a chain of forced liquidations, because forced liquidations will push the price to trigger more forced liquidations. We will just make sure that they are fully hedged in the market and the prices are reasonable.

so how do you define "reasonable"?

no offense but your business model is doomed.  especially since mtgox, the major exchange, is going to be offering similar hedging options.  you will always be one step behind them in reacting to volatility as they will be the HFT and you will be the retail equivalent.

not to be mean but i think you're offering to reverse trades for those customers wiped out in the last ramp b/c if you don't your client base will never return and you need to keep them alive and in the game.

this is going to keep happening over and over again. 

The point is "going to". I'm going to build breakthroughs too, and you forgot this. Bitcoinica is already using Redis to track prices, and we already have the back-end engine to process 10,000 trades per second. Who will be the first to do HFT?

The business model may be doomed in the future but definitely not now. Bitcoinica has always been changing more quickly than our competitors.

Also, I didn't reverse any trades that happens under $4.55. Sorry but the "reasonable" price range is only the obvious personal feeling. $4.55 is reasonable, and $4.89 is not. I'm the guy coding and I know the price is wrong, that's why I'm reversing. I don't claim profits that shouldn't be mine.

Founder of NameTerrific (https://www.nameterrific.com/). Co-founder of CoinJar (https://coinjar.io/)

Donations for my future Bitcoin projects: 19Uk3tiD5XkBcmHyQYhJxp9QHoub7RosVb
cypherdoc
Legendary
*
Offline Offline

Activity: 1764



View Profile
December 25, 2011, 05:01:54 PM
 #168

It's important to know that currently we always have a chain of forced liquidations, because forced liquidations will push the price to trigger more forced liquidations. We will just make sure that they are fully hedged in the market and the prices are reasonable.

so how do you define "reasonable"?

no offense but your business model is doomed.  especially since mtgox, the major exchange, is going to be offering similar hedging options.  you will always be one step behind them in reacting to volatility as they will be the HFT and you will be the retail equivalent.

not to be mean but i think you're offering to reverse trades for those customers wiped out in the last ramp b/c if you don't your client base will never return and you need to keep them alive and in the game.

this is going to keep happening over and over again. 

The point is "going to". I'm going to build breakthroughs too, and you forgot this. Bitcoinica is already using Redis to track prices, and we already have the back-end engine to process 10,000 trades per second. Who will be the first to do HFT?

The business model may be doomed in the future but definitely not now. Bitcoinica has always been changing more quickly than our competitors.

Also, I didn't reverse any trades that happens under $4.55. Sorry but the "reasonable" price range is only the obvious personal feeling. $4.55 is reasonable, and $4.89 is not. I'm the guy coding and I know the price is wrong, that's why I'm reversing. I don't claim profits that shouldn't be mine.

then why do HFT companies pay millions of USD's every year to co-locate their computers in a room next to the NYSE?  mtgox IS the exchange and will be competing with you in the option business.  you will never be able to measure up to their service.
smickles
Sr. Member
****
Offline Offline

Activity: 446



View Profile WWW
December 25, 2011, 05:07:14 PM
 #169

<snip>  mtgox IS the exchange and will be competing with you in the option business.  you will never be able to measure up to their service.
Wait a tic... options? where?

cypherdoc
Legendary
*
Offline Offline

Activity: 1764



View Profile
December 25, 2011, 05:22:14 PM
 #170

<snip>  mtgox IS the exchange and will be competing with you in the option business.  you will never be able to measure up to their service.
Wait a tic... options? where?

they're planning to roll them out in the near future.
notme
Legendary
*
Offline Offline

Activity: 1526


View Profile
December 25, 2011, 05:28:10 PM
 #171

Bitcoinica may be threatened when mtgox adds options/margin trading.  That doesn't mean that will happen any time soon.  MtGox is a slow moving beast.  Why discourage Zhoutong when he is providing a valuable service not available elsewhere?  He has clearly demonstrated (IMHO) better responsiveness and more agile development.  Unless you have inside info you're not sharing, MtGox hasn't said anything about this since they posted it on their site over 6 months ago.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
12jh3odyAAaR2XedPKZNCR4X4sebuotQzN
BadBear
v2.0
Administrator
Legendary
*
Offline Offline

Activity: 1652



View Profile WWW
December 25, 2011, 05:29:29 PM
 #172

Bitcoinica may be threatened when mtgox adds options/margin trading.  That doesn't mean that will happen any time soon.  MtGox is a slow moving beast.  Why discourage Zhoutong when he is providing a valuable service not available elsewhere?  He has clearly demonstrated (IMHO) better responsiveness and more agile development.  Unless you have inside info you're not sharing, MtGox hasn't said anything about this since they posted it on their site over 6 months ago.

He's always been a hater.  Probably just jealousy. 

1Kz25jm6pjNTaz8bFezEYUeBYfEtpjuKRG | PGP: B5797C4F

Tired of annoying signature ads? Ad block for signatures
RandyFolds
Sr. Member
****
Offline Offline

Activity: 434



View Profile
December 25, 2011, 05:33:14 PM
 #173

Bitcoinica may be threatened when mtgox adds options/margin trading.  That doesn't mean that will happen any time soon.  MtGox is a slow moving beast.  Why discourage Zhoutong when he is providing a valuable service not available elsewhere?  He has clearly demonstrated (IMHO) better responsiveness and more agile development.  Unless you have inside info you're not sharing, MtGox hasn't said anything about this since they posted it on their site over 6 months ago.

He's always been a hater.  Probably just jealousy. 


▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓
▓▓ ONEDICE.ME ▓▓▓▓▓ BEST DICE EXPERIENCE ▓▓▓▓ PLAY OR INVEST ▓▓▓▓▓▓
▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓
notme
Legendary
*
Offline Offline

Activity: 1526


View Profile
December 25, 2011, 05:44:01 PM
 #174

He actually gave some good advice on the stock market rally last week, so I do have some respect for him.  Too bad for him, but he chickened out on his positions a few days before.  I'm too small of a player to be wasting trade fees, plus I didn't see how anything had changed, so I hung in there and made a nice profit.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
12jh3odyAAaR2XedPKZNCR4X4sebuotQzN
cypherdoc
Legendary
*
Offline Offline

Activity: 1764



View Profile
December 25, 2011, 05:44:44 PM
 #175

Bitcoinica may be threatened when mtgox adds options/margin trading.  That doesn't mean that will happen any time soon.  MtGox is a slow moving beast.  Why discourage Zhoutong when he is providing a valuable service not available elsewhere?  He has clearly demonstrated (IMHO) better responsiveness and more agile development.  Unless you have inside info you're not sharing, MtGox hasn't said anything about this since they posted it on their site over 6 months ago.

He's always been a hater.  Probably just jealousy.  

typical comment from a guy who's missed a 217% ramp off the bottom that i called 2d before it happened  Smiley

and you're a moderator?
cypherdoc
Legendary
*
Offline Offline

Activity: 1764



View Profile
December 25, 2011, 05:52:29 PM
 #176

He actually gave some good advice on the stock market rally last week, so I do have some respect for him.  Too bad for him, but he chickened out on his positions a few days before.  I'm too small of a player to be wasting trade fees, plus I didn't see how anything had changed, so I hung in there and made a nice profit.

if you read my blog carefully, i replaced my stock positions with additions to my TBT  which did even better.  I had caught the majority of the stock rally since the 10/4 bottom if you recall.  and it won't be too late to add to stock positions.
cypherdoc
Legendary
*
Offline Offline

Activity: 1764



View Profile
December 25, 2011, 05:58:01 PM
 #177

actually i'm not trying to discourage Zhoutong.  i'm trying to warn him about what i feel is a flawed business model which i agree is debatable.

but if mtgox does offer options he WILL be at a significant disadvantage.  there is no question about that.

maybe he can adjust but i'm not sure how.

also i feel that by offering shorting in an immature market such as Bitcoin, he has contributed to an artificially suppressed price over the last several months since he's been in biz.  its too late to help that but now we're seeing the market compensate in the other direction; UP.
BadBear
v2.0
Administrator
Legendary
*
Offline Offline

Activity: 1652



View Profile WWW
December 25, 2011, 06:25:11 PM
 #178

Bitcoinica may be threatened when mtgox adds options/margin trading.  That doesn't mean that will happen any time soon.  MtGox is a slow moving beast.  Why discourage Zhoutong when he is providing a valuable service not available elsewhere?  He has clearly demonstrated (IMHO) better responsiveness and more agile development.  Unless you have inside info you're not sharing, MtGox hasn't said anything about this since they posted it on their site over 6 months ago.

He's always been a hater.  Probably just jealousy.  

typical comment from a guy who's missed a 217% ramp off the bottom that i called 2d before it happened  Smiley

and you're a moderator?

lol I didn't miss anything, don't worry about me, I'm doing great  Grin  You really should relax a little bit, can't be good to be so hostile on Christmas!
And yes I am!


 

1Kz25jm6pjNTaz8bFezEYUeBYfEtpjuKRG | PGP: B5797C4F

Tired of annoying signature ads? Ad block for signatures
proudhon
Legendary
*
Offline Offline

Activity: 1148



View Profile
December 25, 2011, 07:07:01 PM
 #179

actually i'm not trying to discourage Zhoutong.  i'm trying to warn him about what i feel is a flawed business model which i agree is debatable.

but if mtgox does offer options he WILL be at a significant disadvantage.  there is no question about that.

maybe he can adjust but i'm not sure how.

also i feel that by offering shorting in an immature market such as Bitcoin, he has contributed to an artificially suppressed price over the last several months since he's been in biz.  its too late to help that but now we're seeing the market compensate in the other direction; UP.

Maybe MtGox will buy bitcoinica.
netrin
Sr. Member
****
Offline Offline

Activity: 322


FirstBits: 168Bc


View Profile
December 25, 2011, 07:30:40 PM
 #180

There is something to cypherdoc's complaints. Whenever the prices get volatile, the spread compensates. Recall the spike up last week? Even if you had perfect orders at the exact bottom and top I doubt you would have made much if any money at Bitcoinica, but if you bet incorrectly, you'd have lost your entire bet and then some and some more again. $3.8 to $4.5 didn't happen on Bitcoinica, yet the ASK was over $5. It's taken me too long to realize Bitcoinica only works best for the very long term position holders at the expense of the day or week traders.

Greenlandic tupilak. Hand carved, traditional cursed bone figures. Sorry, polar bear, walrus and human remains not available for export.
Pages: « 1 2 3 4 5 6 7 8 [9] 10 11 12 13 14 15 16 »  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!