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Author Topic: Crash!!  (Read 9871 times)
caston
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December 04, 2011, 03:57:55 AM
 #41

Yeah guys its probably my fault... really bad timing on bitcoinica and using the full 10:1 margin.

Shorted when I should have longed, liquated when I should have just held in there and finally longed when I should have shorted and went to sleep. Now I'm poorer and thinking about that Albert Einstein quote:

"No problem can be solved from the same level of consciousness that created it"


I can put it down to lack of sleep largely I guess. Too much isolation and not getting out enough. The annoying thing is the whole time my instincts were right but I didn't really follow them. My emotion made me make bad decisions. I need to learn more discipline and self control.

Now I don't know if I should quit using bitcoinica or should learn from my mistakes and keep using it. I've got a small long position now with what's left of my margin.

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ineededausername
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December 04, 2011, 04:30:19 AM
 #42

Yeah guys its probably my fault... really bad timing on bitcoinica and using the full 10:1 margin.

Shorted when I should have longed, liquated when I should have just held in there and finally longed when I should have shorted and went to sleep. Now I'm poorer and thinking about that Albert Einstein quote:

"No problem can be solved from the same level of consciousness that created it"


I can put it down to lack of sleep largely I guess. Too much isolation and not getting out enough. The annoying thing is the whole time my instincts were right but I didn't really follow them. My emotion made me make bad decisions. I need to learn more discipline and self control.

Now I don't know if I should quit using bitcoinica or should learn from my mistakes and keep using it. I've got a small long position now with what's left of my margin.

WAIT WHAT?!
Who are you? Manipulator or his arch-nemesis?

(BFL)^2 < 0
mjcmurfy
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December 04, 2011, 04:31:26 AM
 #43

What, so you are trying to say that the crash is your fault? Hmm...
How many btc are you trading with? Either a hell of a lot, or else you might need to get some more sleep.

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December 04, 2011, 04:40:46 AM
 #44

Anyone want to bet that the bidwall goes back up Sunday evening?  He/she sold a few thousand BTC today, and will be able to pick 'em back up for cheaper at the end of the weekend.
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December 04, 2011, 04:56:23 AM
 #45

Yeah guys its probably my fault... really bad timing on bitcoinica and using the full 10:1 margin.

Shorted when I should have longed, liquated when I should have just held in there and finally longed when I should have shorted and went to sleep. Now I'm poorer and thinking about that Albert Einstein quote:

"No problem can be solved from the same level of consciousness that created it"


I can put it down to lack of sleep largely I guess. Too much isolation and not getting out enough. The annoying thing is the whole time my instincts were right but I didn't really follow them. My emotion made me make bad decisions. I need to learn more discipline and self control.

Now I don't know if I should quit using bitcoinica or should learn from my mistakes and keep using it. I've got a small long position now with what's left of my margin.
MANIPULATA?

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caston
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December 04, 2011, 04:59:09 AM
 #46

No of course i'm not the manipulator but other people that did the same or similar stuff as me probably made the market so volatile.

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Jonathan Ryan Owens
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December 04, 2011, 06:09:31 AM
 #47

No of course i'm not the manipulator but other people that did the same or similar stuff as me probably made the market so volatile.

Just give everyone in this thread the rest of your $ since you're already throwing it away!

caston
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December 04, 2011, 08:28:41 AM
 #48

No of course i'm not the manipulator but other people that did the same or similar stuff as me probably made the market so volatile.

Just give everyone in this thread the rest of your $ since you're already throwing it away!

Actually, i'd like some advice on how I can turn my situation around to one where I am making money.

I think i'd just be better off if I:

* Follow my own instincts especially those in regards to well known bitcoin price cycles
* Don't hesitate
* Don't rush in either!
* Don't get emotional, or if I do get emotional control my emotions and don't make things worse
* Place orders rather than "quick picks"
* Get out of the house and socialise a bit more
* Get enough sleep

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netrin
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December 04, 2011, 02:37:25 PM
 #49

Caston, make a plan BEFORE you trade. And stick to the plan. Your plan must include confirmation and invalidation. If the price does X, I do A. If the price does Y, I do B, if it changes above/below Z, I will do C.

I recommend that you start trading on paper first. Then if you believe your strategy works, trade with small amounts of money. It's always harder for real, getting the price you intend and actually following the plan equanimously; There is no lying to the balance sheet. Keep records of your plans, your rational, and your success and failure. Guard against lying to yourself - I'm serious. I post much of my rationale publically (to hell with dissenters) precisely to keep myself honest.

Never trade more than you can afford to lose and do not risk your entire basket on one trade.


* Follow my own instincts especially those in regards to well known bitcoin price cycles
* Don't get emotional, or if I do get emotional control my emotions and don't make things worse

These two contradict. Your natural instincts are your emotions. Both are your cunning enemy.

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caston
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December 04, 2011, 04:08:32 PM
 #50

Caston, make a plan BEFORE you trade. And stick to the plan. Your plan must include confirmation and invalidation. If the price does X, I do A. If the price does Y, I do B, if it changes above/below Z, I will do C.

I recommend that you start trading on paper first. Then if you believe your strategy works, trade with small amounts of money. It's always harder for real, getting the price you intend and actually following the plan equanimously; There is no lying to the balance sheet. Keep records of your plans, your rational, and your success and failure. Guard against lying to yourself - I'm serious. I post much of my rationale publically (to hell with dissenters) precisely to keep myself honest.

Never trade more than you can afford to lose and do not risk your entire basket on one trade.


Thank you this is good advice but I am more likely to do this on a spreadsheet because my handwriting is very difficult to read.

* Follow my own instincts especially those in regards to well known bitcoin price cycles
* Don't get emotional, or if I do get emotional control my emotions and don't make things worse

These two contradict. Your natural instincts are your emotions. Both are your cunning enemy.

I'll try to give an example. On the bus I looked at my short position on my android phone and it was still going up. For some reason I got angry. I knew that when I was angry I would make a bad decision and I would lose money. I was so angry that I didn't care and I just liquidated my position. I knew that if I waited for Sunday i'd at least break even but I didn't listen to my common sense. So maybe I have confused instinct with common sense. As it turned out if I had of held the position i'd be about $100 ahead!

I guess now I have a well defined goal: e.g. make back what I lost without adding more to my bitcoinica account.

and I know the consequence of letting my anger control my actions so hopefully I have a slightly more mature head on my shoulders now.

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netrin
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December 04, 2011, 04:46:24 PM
 #51

Emotion is your enemy. Remember that. The only medicine I have for emotion is a plan, because I am unable to think clearly and objectively while emotional. It does no good to pretend you are not emotional.

I am sure you will not, but I recommend you get rid of the android app. The absolute best thing that happened for me earlier this year was losing net access at home. At the end of each work day I slaved over the charts, drew up a plan, and took appropriate action. I checked daily movement on my phone (very expensive from my location) and if prices moved against my plan, I either sat it out (relying on stops and orders I had previously set) or reluctantly skied several kilometers into town. I spent a few weekends studying analysis. I now make more money and sleep better.

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Dan The Man
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December 04, 2011, 05:09:33 PM
 #52

If you want to practice. Just make a bitcoinica account with a dollar in it. See if you can successfully keep a steady return on that dollar.

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December 04, 2011, 05:18:34 PM
 #53

If you want to practice. Just make a bitcoinica account with a dollar in it. See if you can successfully keep a steady return on that dollar.

Guess what happened to me Tongue
I made a 44% return on my first dollar.  I thought, "Yay! I'm good at this."  Turns out that when I put actual money in, my emotions took over and I began to lose money instead Sad

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mjcmurfy
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December 04, 2011, 05:39:16 PM
 #54

Hehe. I'm up about 48% (in bitcoin) over the space of 3 weeks or so. If you are cautious, rational and understand market psychology and the emotions of the players, you can win. Sometimes... If not, you will probably lose more money than you gain and spend most of your time 'catching up' to try to get back to what you started with. This is a bad trading position to be in, because you are constantly 'on-tilt' emotionally, and prone to irrational decisions.

I think the best way to deal with that is to step back from the market for a few days and compose yourself. You should consider all of the money/bitcoin you invest already lost, since you should not invest nor trade with more than you can afford to lose. Then you can trade more rationally. If you are trading with excessive levels you should withdraw to whatever position you are comfortable with and trade with a smaller balance for smaller returns. That way you can learn the market, and suffer less punishing losses when you make a mistake.

It also helps hugely if you have not actually paid a lot of money for the coins, such as by buying them directly on the exchanges. Earning them by exchanging goods and services for them or mining them, means you are only losing your time (and maybe a little of your money if you are a bad trader, but far less).

I have earned all the coins I am trading with, and it helps you see bitcoin in a very different light.
I am trading solely for profit in bitcoin, not fiat.

You have to have a clear goal as to whether you want more bitcoin or more usd. In a falling market, it is easier to profit in bitcoin than in fiat. You should not be buying in a falling market if you want to make fiat profit. All you will likely be able to do is maintain your existing fiat value by accumulating more coins. But this in itself is not a bad strategy, because when the selling forces eventually run out and the market turns to a rising one or the purchasing power of the coins otherwise rises in the future, they will still have value of magnitudes greater. That is what a lot of people hope for I would imagine.

Also, I don't use leveraged trading platforms such as bitcoinica, because you can be far too easily hoodwinked out of your money. I trade on MtGox directly. The returns might be less, but the losses are more easy to live with and easier to correct and hold your nerve through. When you use leverage, you are sometimes not able to sustain the deep volatility of the bitcoin marketplace without a significant amount of capital behind you and a lot of balls. If you are trading smaller amounts, it is much safer to trade directly on the exchange.

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December 04, 2011, 06:13:22 PM
 #55

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Credibility shattered? Perpetual free fall? Case study on human greed?

This thread is about Bitcoin, not USD. Please keep it on topic.

In all seriousness, Proudhon, just because you've tossed the project into your own waste basket due to a price decline (though STILL up over 100% YoY), doesn't mean others have. We're not all as short-sighted. We don't all have time horizons of half a year.

You call it a "case study in human greed"... but you're the one who abandoned it because of a declining price. Others of us continue to build. It's more like a case study in perseverance and dedication - working on a project despite short-term price fluctuations, despite media cynicism, and despite convention.

Bitcoin is so much more than its spot price in a given month. Sorry that your understanding of it was so easily shaken - it must be somewhat depressing to be so fickle in one's endeavors. But cheer up mate, we'll keep working while you sulk and fuss about.

Ok, here are a few more thoughts.  To offer a partial defense of my mindset (not my tone, I admit to going too far), I didn't abandon bitcoin merely because the price declined so much.  I abandoned it because of why the price declined so much, and I still stand by my belief that the projects' credibility has been seriously damaged.  However, I'm going to back down from the claim that it's irreparable.  It's possible bitcoin will make it out of this and it'll be more widely adopted.  I'm not optimistic about it, but it's possible.

Quote
Back in October, proudhon turned into a bear troll.

Basically, yes.  I regret it.

Quote
On the way up, proudhon was an enthusiastic miner and also hyped the project a lot.

He's right.  I was hopeful about the project, not merely because the price was going up, but because it seemed like a very cool project was gaining serious traction.  Just to be clear, I've spoken to very few people IRL about bitcoin and even in my most optimistic days I cautioned all of them about investing in the project because of how volatile it is, and even explicitly advised against it.

Quote
On the way down, since he wasn't making any money anymore, he turned into the bear troll he is today.

For the record, I stopped mining even when my mining ROI was still quite high and it had much more to do with the heat in my office than the declining price.  I bought my mining hardware in late April/early May and it was paid off by the coins it generated in less than 3 weeks.

Again, I want to reiterate that I didn't turn into a bear troll because I wasn't making money anymore (I ended up way up in terms of overall money put in vs what I ended up getting out).  I turned because of why the price appeared to be declining and because it appeared to me and continues to appear to me that the prospects of restoring trust in the project to people not already involved is very low.

In any event, the bottom line is that I've been over the top, and I regret it.  I respect all the work everyone here and the developers have put in and continue to put into the project.  I would love for it to work out in the end and by that I don't mean merely for the price to be high, but I mean that I hope bitcoin ends up a secure, trustworthy medium of exchange/store of value/whatever.  Despite those well wishes I still doubt the project will ultimately succeed, but I wish to change my tone around here going forward.
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December 04, 2011, 07:02:19 PM
 #56

Good reply, proudhon.  Your points generally make sense.
How would you address the issue of the negative public image?

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December 04, 2011, 07:06:13 PM
 #57

Good reply, proudhon.  Your points generally make sense.
How would you address the issue of the negative public image?

All we can do is keep building services and shops.  People will come around when they consistenly hear about positive improvement in our economy without bad news to temper it.  We fucked ourselves letting it spike like we did and the only choice now is patience.

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December 04, 2011, 07:12:39 PM
 #58

The opinion of the majority is overrated. Bitcoin doesn't require 50% of people to support it. Hell, it doesn't require 1% of the people to ever know or care.

A single group using coins, even if it is thinly distributed across the globe, would make the project sustainable. There are quite a few options for such a group, and it's not insane to speculate on one appearing eventually.
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December 04, 2011, 07:46:55 PM
 #59

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Ok.  Ouch.  Those comments sting.  I'm being serious.  I'm going to think about what you guys have said and offer a sincere response.  At least this much is clear right now, I want to tone it down.  I've allowed myself to go overboard.  So, before I say anything else, let me say this:  Sorry.  Whatever direction I think this project is going to go, I'm sorry for being so glib, flippant, and aggressively negative.  A lot of people with honorable intentions have put a lot of work into bitcoin, and whatever I think is or is not going to happen, I need to reign myself in from being so disrespectful.  Thanks for the wake up call.  I'll post more later.

This will make me take anything you say from this point forward much more seriously.  I hope that I will always be this open to legitimate critique.  There is room for disagreement here (and in the world at large) but let's try to keep things civil.  +Respect

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December 04, 2011, 07:52:22 PM
 #60

+1 Proudhon, well said.

I think it's important for people to see Bitcoin not as a pruned and professional new tech project, but instead as a Wild West/industrial revolution phenomenon. With that context, one can see Bitcoinland is simultaneously full of promise and danger, brilliance and scam, optimism and torment. It's tumultuous - and will attract both great and terrible aspects of humanity into the fray.

It's a battle of innovation, creativity, patience, and stamina against uncertainty, doubt, sabotage, and trickery.

If you imagine Bitcoin as some formerly pristine thing that has been tarnished, that is the wrong outlook. Bitcoin has always been, and will for a long time be, a disruptive technology... and legacy systems, whether cultural, political, or economic, should not be expected to give up easily.

Bit regardless of all this, Bitcoin works. And as long as it works, I'll keep working with it.
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