Gyrsur (OP)
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October 06, 2019, 06:46:24 PM |
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So, because of dickering around with shorts, there is NOT as much profits from when BTC's price finally does go up, but at the same time, profits are made when BTC's price goes down in a much greater way than merely selling a few BTC on the way up and buying back at lower prices.
So your reasoning is the following. You are long 10 BTC. You short sell 1. 1)If BTC goes up, you are happy, because you lost on the short bitcoin, but actually you gained. 2) If BTC goes down, you are sad, but at least you can buy back your bitcoin, profit from it and alleviate your suffering. THe reality is. a)You are long 10 BTC. b)You decide to sell 1 bitcoin. c)You are long 9 bitcoin and some cash. If BTC goes up, you are happy, because you gained. on those 9 bitcoin. Cash is the same. If BTC goes down, you are sad, because you are losing on those 9 bitcoin. Then you decide to buy another bitcoin and you are long 10 bitcoin and some (less) cash. You are in a very similar position than point c. but with less cash to spend on more bitcoin buying. It seems that your elaboration is largely correct, yet it should be considered that BTC prices tend to go up and down a quite a bit, but largely UP in the longer run. So in that regard, it might just be better to merely buy and hold, but if you feel more comfortable employing some downward risk strategies, then you can be better off, and even have more bitcoin when the price does finally go up. Of course, you have more bitcoin and less cash, but the value of your bitcoin is higher, so ultimately it still seems to me that your overall portfolio is stronger if you attempt to prepare your portfolio for either price direction - while presuming that in the longer run, BTC prices are going up (even if it takes 5 years or longer to accomplish such UP based on peaks and troughs that we are used to experiencing in bitcoin). If you are trading with linear assets there's no other other way to sum all of your positions and think about only as a SUM. the worst think yopu can think is where you bought some corn and you have to sell it above that level to gain.
Hopefully, higher is the case with bitcoin, and surely we are investing in a risky and pioneering asset, so maybe part of the contribution to the space is appreciating that BTC might not go up, and in that sense, you end up losing money on your investment, even though you had invested in something that you had believed to have a positive future price potential. I strongly disagree with d_eddie. Even in highly volatile environment Mark To market is the best way to think of your trading position, because MtM has to do with the current price, so it has to do with the future movements. If you think on yor P&L, you think where you traded the corn in the Past. Very dangerous. When you trade you have to think only where you are headed to, not where you have been: is't like driving looking into the rearview mirror to decide where the road is headed....
I don't recall talking or reading about mark to market in this thread, so it might be a conceptualization that is lacking in this thread. Surely, I am open to whether it applies to what we are doing, or whether we might be helped by further discussing it. I think that whatever d_eddie has been doing has been profitable for him, and will likely continue to be profitable, whether it fits with some other kind of accounting theory or not. - I let my long live because she will get back up there eventually! This might not be 100% rational, all right ![Grin](https://bitcointalk.org/Smileys/default/grin.gif) This is actually 100% rational. HODLing is the best strategy to gain from Bitcoin! I have my doubts regarding HODLing being the "best" strategy, even though it seems to be the easiest. One of the most inevitable dynamics of bitcoin is that it ongoingly experiences decently large sizes of volatility. So, engaging in various trading practices could cause both volatility insurance and an ability to profit from something that is nearly inevitable. Of course, life might be less stressful and it might take less work to merely buy BTC and HODL BTC, and even if a large number of folks are likely to lose money and time from their trading efforts, there can still be more solid systems (and perhaps d_eddie has found one) that allows for greater returns (even accounting for fees and time spent) from employing such system rather than merely buying and holding. EDIT: I just realised I replied to JJG. I don't know if I am ready for a wall of text!
Edit also:You better be ready for another matter that has shown to be nearly inevitable. ![Wink](https://bitcointalk.org/Smileys/default/wink.gif)
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Gyrsur (OP)
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October 06, 2019, 06:48:13 PM |
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So, because of dickering around with shorts, there is NOT as much profits from when BTC's price finally does go up, but at the same time, profits are made when BTC's price goes down in a much greater way than merely selling a few BTC on the way up and buying back at lower prices.
So your reasoning is the following. You are long 10 BTC. You short sell 1. 1)If BTC goes up, you are happy, because you lost on the short bitcoin, but actually you gained. 2) If BTC goes down, you are sad, but at least you can buy back your bitcoin, profit from it and alleviate your suffering. THe reality is. a)You are long 10 BTC. b)You decide to sell 1 bitcoin. c)You are long 9 bitcoin and some cash. If BTC goes up, you are happy, because you gained. on those 9 bitcoin. Cash is the same. If BTC goes down, you are sad, because you are losing on those 9 bitcoin. Then you decide to buy another bitcoin and you are long 10 bitcoin and some (less) cash. You are in a very similar position than point c. but with less cash to spend on more bitcoin buying. Try to look at it another way: You are long 10 BTC. You short sell 1. BTC goes down. You close the short and 10% of your virtual losses on the long are recovered. Then, EITHER - BTC goes back up. When it gets back where you started, you still have the (real) profit made on the short. OR - BTC goes down some more. You're losing, but you're losing somewhat less. You have more margin - whether you want to risk some more, or you're just glad your liquidation is that little bit further away. That's how I have used my contrarian positions until today, and I am glad I did. The only think that is important is that you are long 9 BTC. That's it, you can look as 10-1 11-2 100-91 or whatever. All the profits and all the losses are real, it doesn't matter if they are realised or unrealised, they are real. If you bought ATH in Dec 2018, your losses are real, even if you are still hodling.
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Gyrsur (OP)
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October 06, 2019, 07:04:51 PM |
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So, because of dickering around with shorts, there is NOT as much profits from when BTC's price finally does go up, but at the same time, profits are made when BTC's price goes down in a much greater way than merely selling a few BTC on the way up and buying back at lower prices.
So your reasoning is the following. You are long 10 BTC. You short sell 1. 1)If BTC goes up, you are happy, because you lost on the short bitcoin, but actually you gained. 2) If BTC goes down, you are sad, but at least you can buy back your bitcoin, profit from it and alleviate your suffering. THe reality is. a)You are long 10 BTC. b)You decide to sell 1 bitcoin. c)You are long 9 bitcoin and some cash. If BTC goes up, you are happy, because you gained. on those 9 bitcoin. Cash is the same. If BTC goes down, you are sad, because you are losing on those 9 bitcoin. Then you decide to buy another bitcoin and you are long 10 bitcoin and some (less) cash. You are in a very similar position than point c. but with less cash to spend on more bitcoin buying. Try to look at it another way: You are long 10 BTC. You short sell 1. BTC goes down. You close the short and 10% of your virtual losses on the long are recovered. Then, EITHER - BTC goes back up. When it gets back where you started, you still have the (real) profit made on the short. OR - BTC goes down some more. You're losing, but you're losing somewhat less. You have more margin - whether you want to risk some more, or you're just glad your liquidation is that little bit further away. That's how I have used my contrarian positions until today, and I am glad I did. The only think that is important is that you are long 9 BTC. That's it, you can look as 10-1 11-2 100-91 or whatever. All the profits and all the losses are real, it doesn't matter if they are realised or unrealised, they are real. If you bought ATH in Dec 2018, your losses are real, even if you are still hodling. I see now. If you count unrealized P&L as real, then it's just as you say. I still think it's called UNreal - ized for a reason.
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Gyrsur (OP)
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October 06, 2019, 07:09:23 PM |
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I see now. If you count unrealized P&L as real, then it's just as you say. I still think it's called UNreal - ized for a reason.
Very funny. Merited.
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Gyrsur (OP)
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October 06, 2019, 07:11:06 PM |
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Hey guys, have you ever done some trading on both sides? That is, if you enter Long, do you protect your position in Short with some leverage? This Spanish-speaking Trader did it, the video is from 2018, but it seems to me that the adrenaline he feels is a lot! more when you do it with 100k! https://i.imgur.com/Xv1Vx5v.pngSource: https://www.youtube.com/watch?v=T7p5UTPNPIs&t=14sAs Jesse Livermore did, it is a way to always be in the market, no matter which direction you are going. Do you think it is convenient to do it right now in the market? Since the price is expected to increase, but if it falls, protect your position. Obviously, to do this you have to have a lot of experience and try to suppress emotions to the fullest. Hedge at the start - Trading Systemlet's play it simple without leverage just 1 BTC positions in USD. bid price is 8200 ask price is 8250 spread is 50 you sell (sl -250) at 8250 - from start it equals to -50 in profit you buy (sl -250) at 8200 - from start it equals to -50 in profit price goes to 8400 - sell liquidated with -250 profit - buy with +150 in profit price must go to 8500 to be break-even (w/o fees for both positions) or price goes to 8000 - buy liquidated with -250 profit - sell with +150 in profit price must go to 7900 to be break-even (w/o fees for both positions) it's kind of break-out system with a range of 500 600 (w/o fees for both positions). there MUST be a range break-out > 300 to be profitable and ranging withing the range will increase the losses every time a sl is hit. *correct me please if I did a calculation error EDIT: in my eyes it's a poor system. better you have a range defined and buy above the range and sell below the range because then you will not add several losses if there is no break-out of the range for a specific time.
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Gyrsur (OP)
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October 06, 2019, 07:39:45 PM |
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We make different assumptions. bid price is 8200 ask price is 8250 spread is 50
it's kind of break-out system with a range of 500 600 (w/o fees for both positions).
Yes, assuming both legs are closed at the same time (constraint that doesn't apply to me). @fillippone, as usual your posts are instructive, thought-provoking or both. (That's how you amassed that disgusting mountain of merits in no time.) Even if in an amusing way, I was making a point. It took me a bit to digest your input and articulate a reply, so here I'm back. I see now. If you count unrealized P&L as real, then it's just as you say. I still think it's called UNreal - ized for a reason.
Very funny. Merited. When I said that unrealized P&L is, well, unreal, I failed to add "until you hit the wall": the wall of nonlinearity at liquidation. If you manage to avoid that wall, you statistically win the game. I don't have formal training in economy or finance, but the mathematical advantage of playing both sides can be seen by integrating P&L over time along random walks with reasonable properties. (Perfect absence of memory in the Markov chain sense is not even required. More something like ergodicity in the sense "the graph will eventually get back here, for sure!") Even in highly volatile environment Mark To market is the best way to think of your trading position, because MtM has to do with the current price, so it has to do with the future movements.
You assume P&L is instantly real, since current price is the best possible estimate of future price. Which it could be if there were a universal way to price risk and opportunity cost. Which I assume there isn't. My own assumptions? "I'll never hit that wall because I keep my gameplay far from the sidelines." Taken to extremes: if I had infinite capital, I would not worry a bit. In other words: my bankroll is finite so I do worry of course, but I have low (negative?) opportunity cost for my play stash - it's better for me to use it to get moar btc at good odds than to collect dust in the freezer. As for the risk, I can't quantify it precisely, but it's bounded by the play stash amount if I stick to my rules. If BTC goes down, you are sad, because you are losing on those 9 bitcoin. Then you decide to buy another bitcoin and you are long 10 bitcoin and some (less) cash. You are in a very similar position than point c. but with less cash to spend on more bitcoin buying.
Play money has an exclusive set of rules, such as "move excess play money to the cold stash when the amount reaches X", or every 2 months, or some combination that works for me. Another way to see it is: never let fiat enter the equation. Fiat for me is only relevant when I need it, and it comes from the main stash anyway. Once you've put away excess totaling 100% of your play stash, you're playing with house money. Once it's 200%, your risk still doesn't go to 0 (ergodicity hits both ways), but you have one "free" round where you can be wrong about never hitting the wall and still remain in overall profit. This reasoning could be very different if there were options available to trade. But this is not the case.
I subscribe to your point about options. Most of my games are played with futures or swaps. Swaps are nice for the short side, since in a bull market they usually collect funding interest. I would love to have options available too! They would lower the cost of "insurance" a lot, if settled in kind. At the moment, options involve fiat unless I jump through hoops, so I do the best I can without them. Numerical disclosure of sorts. Over the last week, I just gained 1% of the play stash with my short position by repeatedly closing it in small profit and reopening it higher. Last trade was 0.2% profit, new entry point just 10$ higher and 8% larger. Present short leg size a little over half the long (which is losing ~8% atm). A few more weeks like this and I will get even. If it goes down, I'm 8% better placed to profit again, while the margin buffer for the long has grown a tiny bit. My liquidation is well below 4k, and if I close the ultra-winning short before that happens, I'll gain about $500-$600 more breathing space, pushing it below 3.5k. Yes, it is a bit of work actually. So what? A nice little hobby that pays out - an additional way to grow my HODLstash without forgoing, for example, a fancy restaurant or some other cozy reward. And I get to discuss it with some fine gentlemen too, which is a pleasure in itself. Sorry this was a long post, and terribly OT at that - almost as if this discussion was about bitcoin!
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Gyrsur (OP)
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October 06, 2019, 07:52:12 PM |
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Hey guys, have you ever done some trading on both sides? That is, if you enter Long, do you protect your position in Short with some leverage? This Spanish-speaking Trader did it, the video is from 2018, but it seems to me that the adrenaline he feels is a lot! more when you do it with 100k! https://i.imgur.com/Xv1Vx5v.pngSource: https://www.youtube.com/watch?v=T7p5UTPNPIs&t=14sAs Jesse Livermore did, it is a way to always be in the market, no matter which direction you are going. Do you think it is convenient to do it right now in the market? Since the price is expected to increase, but if it falls, protect your position. Obviously, to do this you have to have a lot of experience and try to suppress emotions to the fullest. Hedge at the start - Trading Systemlet's play it simple without leverage just 1 BTC positions in USD. bid price is 8200 ask price is 8250 spread is 50 you sell (sl -250) at 8250 - from start it equals to -50 in profit you buy (sl -250) at 8200 - from start it equals to -50 in profit price goes to 8400 - sell liquidated with -250 profit - buy with +150 in profit price must go to 8500 to be break-even (w/o fees for both positions) or price goes to 8000 - buy liquidated with -250 profit - sell with +150 in profit price must go to 7900 to be break-even (w/o fees for both positions) it's kind of break-out system with a range of 500 600 (w/o fees for both positions). there MUST be a range break-out > 300 to be profitable and ranging withing the range will increase the losses every time a sl is hit. *correct me please if I did a calculation error EDIT: in my eyes it's a poor system. better you have a range defined and buy above the range and sell below the range because then you will not add several losses if there is no break-out of the range for a specific time. Sorry, I don't undertand your example. first of all, if bitcoin quotes like you stated: bid price is 8200 ask price is 8250 spread is 50
You cannot buy at 8,200 and sell at 8,250. You can sell at 8,200 and buy at 8,250. So you lock a 50 USD negative spread (the so called bid/ask spread). You can potentially place an order to buy at 8,200 and place an order to sell at 8,250. But it is not granted you get both of them executed. You are taking some risk here, that eventually will allow you to lock a 50 USD gain. But let's think you are good enough, or lucky, to buy and sell locking a 50 dollar profit you bought a bitcoin at 8,200 and sold a bitcoin at 8,2500. So you situation is: +1 BTC @8,200 -1 BTC @8,250 What happens if BTC goes to 8,300? Your buy is in the money of 100 usd: P&L (unrealised): +100 Your sell is out the money of 50 usd: P&L (unrealised): -50 Total P&L (unrealised):+ 50 What happens if BTC goes to 8,400? Your buy is in the money of 200 usd: P&L (unrealised): +200 Your sell is out the money of 150 usd: P&L (unrealised): -150 Total P&L (unrealised):+ 50 What happens if BTC goes to 8,050? Your buy is out the money of 150 usd: P&L (unrealised): -150 Your sell is out the money of 200 usd: P&L (unrealised): +200 Total P&L (unrealised):+ 50 See? Your p&l is always 50: this leads to me to think that you are not long a bitcoin and short a bitcoin: you are flat, you have NO bitcoin, and you just gained 50 dollar from your market making 1 bitcoin at the start (buying and selling the initial bitcoin- also in the opposite order- at the start of this trade). I don't event think (but i am not expert specifically on those platform) to get long and short on the same account. If a platform is allowing to go short and long at the same time they're actually stealing you money. Your example go on with liquidations, those don't change the thing dramatically, but I can't go on , because i lost your calculations as they appear all wrong to me: you sell (sl -250) at 8250 - from start it equals to -50 in profit
price goes to 8400 - sell liquidated with -250 profit - buy with +150 in profit
If you sell at 8,250, and price goes to 8,400 your sell is liquidated with 150 loss. Even in highly volatile environment Mark To market is the best way to think of your trading position, because MtM has to do with the current price, so it has to do with the future movements.
You assume P&L is instantly real, since current price is the best possible estimate of future price. Which it could be if there were a universal way to price risk and opportunity cost. Which I assume there isn't. My own assumptions? "I'll never hit that wall because I keep my gameplay far from the sidelines." Taken to extremes: if I had infinite capital, I would not worry a bit. In other words: my bankroll is finite so I do worry of course, but I have low (negative?) opportunity cost for my play stash - it's better for me to use it to get moar btc at good odds than to collect dust in the freezer. As for the risk, I can't quantify it precisely, but it's bounded by the play stash amount if I stick to my rules. If we had infinite capital, infinite time we would all be rich. Capital is finite and time is finite. I don't know if it is better this way, but it surely so much more funny.
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Gyrsur (OP)
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October 06, 2019, 09:59:38 PM |
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Liking this duet I'm digging through oldish posts digesting takes time My own assumptions? "I'll never hit that wall because I keep my gameplay far from the sidelines." Taken to extremes: if I had infinite capital, I would not worry a bit.
If we had infinite capital, infinite time we would all be rich. Capital is finite and time is finite. I don't know if it is better this way, but it surely so much more funny. You're right fillippone, hence the worry (not without the occasional "fun", I must admit). 100x leverage doesn't make my capital "infinite" unless my position is under 1/100 of my play stash (and even then, nonlinearities and verlakkerijen ensue if said stash is within 2-3 orders of magnitude of the exchange's actual open interest). Nothing will make my time infinite (well, maybe a team in the goossens sense - but then, infinte team turnover becomes a necessity and we don't want to go there, do we). Both "stashes" are finite indeed - and both have hard upper bounds of sorts. So I see your point, but you must admit my view has merit too. You earlier said which is the "best" (only, actually) way of thinking. If you are trading with linear assets there's no other other way to sum all of your positions and think about only as a SUM. the worst you can think is where you bought some corn and you have to sell it above that level to gain.
( TL;DR +10 long, -1 short = +10 - 1 = +9 long )
It might be the worse way in certain cases, but in my own case it made me real BTC. So where's the catch? Me not considering the positions as summable? If it's that, it's a powerful tool! Your view is the best under certain assumptions: same instrument, closed at the same time, linear. Under others, (mainly: different time span) it isn't. Which doesn't imply the second view is better. It does become strictly better if you have infinite capital and time, and infinitely better if you also have perfect forward information. The option of removing dough from the table is a big help too, as it allows me to chicken out whenever I fancy. Agreed, it's a derivative play involving manual labor. Summing up, my numbers say that even with finite resources, the "second" system can be put to work. And I'm pretty sure my own set of rules is not the only one that can produce statistical profit in waters such as those we are sailing atm. Maybe someone is able to formalize this in an orthodox way, or to make more sense somehow. You? Hairy? Marcus? V8? Any others? #haiku
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STT
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October 06, 2019, 10:54:13 PM Last edit: October 07, 2019, 10:12:31 AM by STT |
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I posted in mid of requote so just updating my post. Jesse Livermore was a great but more of a savant then someone I would hope or want to replicate exactly, he should have stored alot more assets taken more profits; he didnt and got wiped out a few times. Not an option for most of us. Good advice on trading is leave some profit on the position when you close it, ie. someone has to take it over with a view to profiting also. I have longs and shorts and it could be a negative from additional fees and costs to running both sides or it could be advantageous to not be biased to long or short position but simply following the most profitable opportunity. To be considering both scenarios is twice the work but likely more accurate then purely looking for when the market has the best chance to rise. Also I think shorting is alot more risky, I would keep the short as the lesser of the two trades done, though short BTC long USD actually pays a small yield. Leverage costs, the spread to a trade costs but sometimes forex does pay a small amount rather then cost, people in Australia might have a nicer yield if they went short BTC price in that currency. I dont ever really consider A$ AUD so I wouldn't know how they are doing right now, its more complicated then just plain short usd price. I'd never short BTC in GBP for example, too much news and politics and its just weak and declining, or super obviously people in Venezuela obviously cannot go short so this question is individual and to be fair so is a long consideration. All of us are taking for granted that FIAT or money generally is cheap and weaker every year, in memory this was not always so. A short must consider this more? I guess https://www.bloomberg.com/news/articles/2019-10-03/thailand-s-surging-baht-shatters-expat-dreams-of-easy-retirement
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Hueristic
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October 07, 2019, 02:24:54 AM |
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Interesting discussion, i can't finish up reading this tonight but have it subbed now. My first thought is it is just a method of forestalling the inevitable and eventually you will die a death of a thousand cuts and if you need to be doing this to stay in the game then you are over extending yourself to begin with.
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d_eddie
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October 07, 2019, 03:11:01 AM |
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It's not a duet It's a chamber ensemble! Gyrsur treads "out there".
I'd give you a +WOs for bothering to open a thread in the wilderness, but they call WOs a fork in these here parts.
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Gyrsur (OP)
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October 07, 2019, 05:44:57 AM |
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EDIT: in my eyes it's a poor system. better you have a range defined and buy above the range and sell below the range because then you will not add several losses if there is no break-out of the range for a specific time.
this below is an example for a range defined between $8471.6 (high) and $7681.3 (low). if the price will break-out above a long/buy order (green dotted line) will be triggered. if the price will break-out below a short/sell order (red dotted line) will be triggered. this is classical break-out trading. ![](https://ip.bitcointalk.org/?u=https%3A%2F%2Fi.imgur.com%2FDyIVKk0.png&t=665&c=h6pD8n_Db_fEHA)
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d_eddie
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October 07, 2019, 11:36:33 AM |
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^^ This seems a different system, in that the result is only one position - either long or short, depending on the side of the breakout (high or low respectively). Or am I misunderstanding?
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Gyrsur (OP)
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October 07, 2019, 12:25:33 PM |
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^^ This seems a different system, in that the result is only one position - either long or short, depending on the side of the breakout (high or low respectively). Or am I misunderstanding?
yes, you're right. this is ordinary break-out trading with a range defined where the price goes up and down within the range for a while and later (hopefully with a strong momentum) the price will leave the range upwards or downwards. if the price will leave the range upwards a long/buy order will be triggered and if the price will leave the range downwards a short/sell order will be triggered. you have always only one position opened - long/buy or short/sell. regarding the whole discussion I understand in the meantime that we speak about at least two different trading approaches: (a) your approach (as it seems to me) is to be invested with physical Bitcoin in general (because you expect a rising price in the long term) and if you have the feeling that the bullish momentum declines you do open short positions with leverage to hedge against your losses from the physical Bitcoins. in the long term you do profit of the rising price of physical Bitcoin but in the short/middle term you do profit as well of the sometimes fast declining price of Bitcoin with much leverage. do I understand it right?
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Gyrsur (OP)
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October 07, 2019, 01:26:12 PM Last edit: October 07, 2019, 01:40:26 PM by Gyrsur |
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(b) the approach I thought you have (excuse me that I misunderstood you) is to open a long/buy and a short/sell position at the same time as I did it today with a DEMO account and just 0.2 BTC for each order. if you don't have a trading account were you are able to open both directions at once (hedge possibility) then you have to use a subaccount for opening the second position in the opposite direction. I've opened both directions at the same time but with this broker I have a massive spread of about 115 points which is to much (there are better brokers out there for Crypto trading but I don't trade Crypto with this broker). so now I have two positions (long and short) opened and there is a soft bullish momentum. what should I do? the long position is in profit and the short position is in loss. should I wait until the price goes to the resistance of the range (high at $8471.6) and then close the long positions in profit and hope we will have no break-out above the resistance? maybe then the price will go down again and I have to wait until the short position is at least in break-even (+/- 0 points) to close it too. this is called range trading and works very well in a defined range but woe there is a break-out with massive momentum - then it will get ugly! the conclusion for me about this trading style is: at the start you don't have to decide about the trading direction (long or short) when you do open the positions but this means not it is easy money because you will get later at the point where you must make a decision about to close the long position or not at the resistance point (high at $8471.6) to finish later with a profit. ![](https://ip.bitcointalk.org/?u=https%3A%2F%2Fi.imgur.com%2FjWlEora.png&t=665&c=Bulcq_XyzM1e8w) ![](https://ip.bitcointalk.org/?u=https%3A%2F%2Fi.imgur.com%2FLSjJB7b.png&t=665&c=p9PdPWCg1K3ZqQ)
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d_eddie
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October 07, 2019, 02:17:18 PM |
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(I am posting the reply out here. I don't want to stray OT in the WO by talking too much about bitcoin prices. ![Tongue](https://bitcointalk.org/Smileys/default/tongue.gif) ) Short closed with tiny profit. Long still suffering. Wait and see.
which approach? (a) or (b)? ![Wink](https://bitcointalk.org/Smileys/default/wink.gif) Similar to (b), but in practice the positions aren't necessarily open together. The ideal situation, of course, is to have the short's entry point higher than the long's. Which means there's an area where both position are gaining. This is a rare occurence for me, however. Most frequently, the short is open when I fear or smell a downtrend, so the entry point is normally lower than the long's. so now I have two positions (long and short) opened and there is a soft bullish momentum. what should I do? the long position is in profit and the short position is in loss. should I wait until the price goes to the resistance of the range (high at $8471.6) and then close the long positions in profit and hope we will have no break-out above the resistance? maybe then the price will go down again and I have to wait until the short position is at least in break-even (+/- 0 points) to close it too. this is called range trading and works very well in a defined range but woe there is a break-out with massive momentum - then it will get ugly!
the conclusion for me about this trading style is: at the start you don't have to decide about the trading direction (long or short) when you do open the positions but this means not it is easy money because you will get later at the point where you must make a decision about to close the long position or not at the resistance point (high at $8471.6) to finish later with a profit.
Indeed, it can be seen as two opposing range trades. There is no solution to the dilemma - When to cash out? When to give up? - but holding both ends helps with working in stages towards an acceptable solution (that is, positive profit). A simple, reasonably effective way to limit serious damage if a breakout occurs is to place stops just outside the range.
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bitgolden
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October 07, 2019, 04:49:20 PM |
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Mathematically you guys could be right, you are working on finding the optimum place where you can profit no matter which direction bitcoin goes, I am certain it would be very difficult to find such a spot but it could be totally possible so I can't say it is impossible, you can do it or at the worst you will have less of a loss when it moves one direction because you are hedged towards both sides so you don't gain too much but you don't lose too much neither.
However, this is a method that can be done by very few people, just like many smart people you guys are forgetting that there are people like me who see this as magic or foreign language and not understand one bit which is why it would never get too much mass attention from people, only other smart people like you.
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d_eddie
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October 07, 2019, 05:00:43 PM |
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Mathematically you guys could be right, you are working on finding the optimum place where you can profit no matter which direction bitcoin goes, I am certain it would be very difficult to find such a spot but it could be totally possible so I can't say it is impossible, you can do it or at the worst you will have less of a loss when it moves one direction because you are hedged towards both sides so you don't gain too much but you don't lose too much neither.
However, this is a method that can be done by very few people, just like many smart people you guys are forgetting that there are people like me who see this as magic or foreign language and not understand one bit which is why it would never get too much mass attention from people, only other smart people like you.
I doubt it is possible to find a magical system that works no matter what. It's still largely a matter of putting work into it, just like an ordinary non-omniscient guy has to do. The double position maneuver doubles the tools at my disposal, and it gains me headroom: when the "losing" position gets squeezed, I close the "winning" position and gain some margin breathing space. In times of recurrent fuckery with barts and whatnots, it's an option that shouldn't be dismissed without a little thought. I often get to profit on both edges of the bart, or at least on one of the two.
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