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Author Topic: Bitcoinica sucks a lot worse than it used to  (Read 1428 times)
Crypt_Current
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January 03, 2012, 09:58:38 PM
 #1

The spreads have just become so ridiculous.  After this position, I'm out.  Thanks for some fun and interesting times, Zhou.  I wish you the best (which you probably already have).

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Mushoz
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January 03, 2012, 10:04:01 PM
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Not really their fault atm. The spreads at Mtgox are enormous as well, and there's no depth for atleast a 20+ cents range

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January 03, 2012, 10:04:10 PM
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Isn't this just a function of the order book on Gox?

Right now I see that there is no significant order depth on the bid or ask side between about 4.78 and 4.90 on Gox.  So makes sense that the spreads on Bitcoinica would be equally huge.
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January 03, 2012, 10:06:56 PM
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The spreads bothered me until I stopped day trading on Bitcoinica and started swing trading.  My trading windows are now about a week long and I'm looking for huge swings in either direction.  The spread doesn't matter to me at that point, when I'm well into the green.
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January 03, 2012, 10:07:50 PM
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The spreads bothered me until I stopped day trading on Bitcoinica and started swing trading.  My trading windows are now about a week long and I'm looking for huge swings in either direction.  The spread doesn't matter to me at that point, when I'm well into the green.

+1

Day trading sucks on Bitcoinica for obvious reasons ^^

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January 03, 2012, 10:34:45 PM
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The spreads bothered me until I stopped day trading on Bitcoinica and started swing trading.  My trading windows are now about a week long and I'm looking for huge swings in either direction.  The spread doesn't matter to me at that point, when I'm well into the green.
+2

More profitable, and also provides liquidity at Gox, which is better for the market overall and creates more value for your long coins.  At bitcoinica, your "trades" might just be balancing Zhou's buckets, with no corresponding orders at mt gox.  I like virtual currencies (obviously), but placing leveraged side bets on the Mt. Gox exchange rate is two steps removed from the bitcoin blockchain, and is a bit too virtual for me.
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January 03, 2012, 11:08:16 PM
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I'm glad to see that sense is finally emerging on the issue of bitcoinica!

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January 03, 2012, 11:41:31 PM
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10 cents is a big spread?  How frequently are you trading?
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January 03, 2012, 11:47:01 PM
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10 cents is a big spread?  How frequently are you trading?

10 cents spread on a 5$ price _is_ a big spread. Just saying Smiley

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January 03, 2012, 11:55:01 PM
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If you are trading small amounts (<50 BTC), certainly.  Gox's spread for 50BTC of liquidity is about 4 cents right now, plus 0.65% on both sides is ~6 cents (4.88 x 1.3%).  Seems like the spread is almost the same at these levels.

Did I get my math wrong?  
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January 04, 2012, 12:52:35 AM
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I'm glad to see that sense is finally emerging on the issue of bitcoinica!

75K btc traded on bitcoinica in the past 24 hours, with several 100K days in the past couple weeks.  what is this sense which you speak of?
Crypt_Current
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January 04, 2012, 02:04:40 AM
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10 cents is a big spread?  How frequently are you trading?

10 cents spread on a 5$ price _is_ a big spread. Just saying Smiley

Even worse when you try to catch the spikes, and the spread suddenly jumps to 20 or 30 cents.  I'm better at intuitively catching the spikes closer to the moment, rather than predicting them ahead of time.  I suppose I should attempt a bot, but I don't think I have the capital to trial-and-error an algorithm.

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zhoutong
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January 04, 2012, 02:05:31 AM
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I'm glad to see that sense is finally emerging on the issue of bitcoinica!

75K btc traded on bitcoinica in the past 24 hours, with several 100K days in the past couple weeks.  what is this sense which you speak of?

I think this is another "any publicity is good publicity" scenario.

The Bitcoinica tagline may not be right, Bitcoinica may not be for anyone. But anyway we still have attracted a lot of attention from the right people.

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zhoutong
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January 04, 2012, 02:13:29 AM
 #14

10 cents is a big spread?  How frequently are you trading?

10 cents spread on a 5$ price _is_ a big spread. Just saying Smiley

Even worse when you try to catch the spikes, and the spread suddenly jumps to 20 or 30 cents.  I'm better at intuitively catching the spikes closer to the moment, rather than predicting them ahead of time.  I suppose I should attempt a bot, but I don't think I have the capital to trial-and-error an algorithm.

The spread doesn't really matter if you think you are buying at the right price. You're not going to sell it right away anyway.

When there's a upward spike, usually the bid will remain at the bottom until the depth has been established by bots at Mt. Gox. The ask will rise to the actual trading price immediately. If you are catching the spike, you can buy at the actual trading price. Even though you may suffer from a larger temporary unrealized loss, it's fine after the spike has settled.

We don't just take the trading price and add a spread onto it, we actually calculate both buying and selling prices using the same algorithm independently. So the spread doesn't really matter. It just reflects the actual depth.

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trogdorjw73
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January 04, 2012, 05:16:36 AM
 #15

10 cents is a big spread?  How frequently are you trading?

10 cents spread on a 5$ price _is_ a big spread. Just saying Smiley
No, it's not. 10 cents at $5 is the same as 5 cents at $2.50. Remember that Bitcoinica spreads are generally a function of percentages, so the spread will never be less than around 1.5%, and if there's a lot of volatility you can expect more like a 2% to 3% spread. Where that equates to 4 to 6 cents at $2, it's 10 to 15 cents at $5. If the price gets back up to $30, expect the spread to be around 30 to 50 cents. The idea of leverage is that you're betting which way things will go, and it's a gamble that you're taking in order to put more money on the books than you actually have. If you're only using 1:1 leverage, there's no reason to use Bitcoinica at all, as you're just taking the MtGox 1.2% fee and then adding the Bitcoinica fee on top of that.

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