Bitcoin day trading

[tarrant_01]

I've been mining since August and accrued about 150 bitcoins since then.  I watch the market occasionally until recently when it started rising.  I put in $50 of play money to see if I could make money buying and selling. I was kind of surprised that it actually working out in my favor.  I think in a couple days I turned the $50 into $70.  Now, I'm trying not to be greedy ... which is the hardest part when doing this. I decided to put in the 150btc and give that a go. I did ok, I got up $50 then down $50(I panic sold when the price started crashing, I learned my lesson to be patient lol). So far not so bad, until this stagnant period that's going on. It's soooo boring.

I was laughing the other day when I was buying btc and selling it at 10 cents more while the buy order was being filled at the same time.  The market can be rather ridiculous sometimes but I think that's when its the most exciting.

Is this practice frowned upon generally or is it a common practice? I've never done anything like this before and just learning as I'm going.

I'd also like to talk about common practices if it's not too touchy of a subject.

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[jake262144]

Well, speculative buying and selling is a zero-sum game: if you earn some money they have to come from someone else's pocket (another less lucky/skilled speculator?).

Speculation surely has its dark side: the speculators thrive on market volatility. High volatility is what businesses detest.
As a trader selling some services/goods for bitcoins which do you think is better: a month of stagnation or price roller coaster? What if you were to receive your wages in bitcoins?

I haven't bothered with speculative selling-buying as I do believe it is harmful to the whole bitcoin universe in the long run.
Anyone disagreeing with me is hereby invited to post their rebuke

[P4man]

Its (extremely) common practice. If it werent for gamblers speculators, btc would likely trade around, if not below $1. I dont really frown upon it, as its inevitable, but jake is correct that this speculation and the resulting insane volatility makes it very hard for bitcoin to gain traction as a trade facilitator. Its a catch 22 really, because volatility attracts gamblers speculators, and speculation creates volatility.

[tarrant_01]

I guess what I do with the extra money determines if it's good or bad for bitcoin.  It's difficult to get out of the USD mentality for buying things than it is to get into buying things with bitcoin.  I remember reading about the guy that bought a pizza for ... what was it ... 10,000 bitcoin because they were worth less than a cent at the time.  

I don't think bitcoin is going to stabilize for a long time. Just imagine what'll happen when the reward becomes 25btc per block.

The Zen approach....goods/services when it's stable....day trade when it's not.  Just a thought.

[RodeoX]

First off, Welcome fellow peer.
No one should frown on practices like arbitrage or speculation or shorting. Just as no one should cry foul for loosing their pants doing so. IMO, we have a true *free market here. And a system without rules is just as fair as a system of rules for everyone.
With bitcoin you own your money. It is not the property of a government or bank. You can trade it as you wish. Of course it is not insured either and no one is going to help you if it is stolen or lost in the market. That puts the onus on you to engage in thoughtful practices. So, have fun and be careful. Bitcoin doesn't need you to act a certain way for it to succeed. If it did I don't think it would work, and it is working just fine.

[J.C.]

The fact is we need the speculators. The speculators keep the trade volumes high enough to ensure liquidity of your BTC. Without this there would be much trepidation from casual users - if they know it is very hard to exchange their BTC why would they want to accept them as payment? The speculators will move in early, just because they know other speculators will follow! So it is really the speculators that bootstrap the currency valuation as I see it.

[Seal]

The fact is we need the speculators. The speculators keep the trade volumes high enough to ensure liquidity of your BTC. Without this there would be much trepidation from casual users - if they know it is very hard to exchange their BTC why would they want to accept them as payment? The speculators will move in early, just because they know other speculators will follow! So it is really the speculators that bootstrap the currency valuation as I see it.

+1. Speculators or day traders, whatever you want to call it adds liquidity to the whole economy which is never a bad thing. A healthy part of a monetary eco system.

Be careful and good luck. You can now call yourself a trader.

[Nootropic3838]

The fact is we need the speculators. The speculators keep the trade volumes high enough to ensure liquidity of your BTC. Without this there would be much trepidation from casual users - if they know it is very hard to exchange their BTC why would they want to accept them as payment? The speculators will move in early, just because they know other speculators will follow! So it is really the speculators that bootstrap the currency valuation as I see it.

Yet there becomes a point were too many speculators can make the currency and market too volatile.

[Mashrock]

You'd have a hard time trading bitcoins when there are bigger fish playing with the price.

its really out of your control, you'd probably be better putting your money into a fx program and trade currency.

[Pteppic]

What just happened? My bot was down and when it came back up, the price went wild. Was there a problem with Mt Gox API which made the market go crazy as soon as it came back online?

[P4man]

+1. Speculators or day traders, whatever you want to call it adds liquidity to the whole economy which is never a bad thing. A healthy part of a monetary eco system.

Only within reason. Bitcoin is so "liquid" you can barely use it for anything else as gambling. Im trying to buy a few videocards and I want to pay with BTCs that will be held in escrow, but how the hell are we supposed to agree on a price when the value fluctuates with 20% an hour?

For most markets, 25% speculation is healthy. Once you get >50%, the value of the underlying asset becomes secondary to the speculation and you begin to have a problem. When its 99% like with bitcoin, you no longer have a currency or trade facilitator, you have a casino.

[rjk]

What just happened? My bot was down and when it came back up, the price went wild. Was there a problem with Mt Gox API which made the market go crazy as soon as it came back online?

Any time there is a wild swing in the market, the sockets go MIA. Wonder if it is the gox's way of damping the swing.

[poppyh]

+1. Speculators or day traders, whatever you want to call it adds liquidity to the whole economy which is never a bad thing. A healthy part of a monetary eco system.

Only within reason. Bitcoin is so "liquid" you can barely use it for anything else as gambling. Im trying to buy a few videocards and I want to pay with BTCs that will be held in escrow, but how the hell are we supposed to agree on a price when the value fluctuates with 20% an hour?

For most markets, 25% speculation is healthy. Once you get >50%, the value of the underlying asset becomes secondary to the speculation and you begin to have a problem. When its 99% like with bitcoin, you no longer have a currency or trade facilitator, you have a casino.

Good thing somebody recognizes this and accepts that BTC is just a vehicle for speculation rather than a workable currency ( currently ) !

[A1BITCOINPOOL]

I think it would be crazy to try and day trade bitcoin right now.  The prices jump around so quick, you might get killed.

[airforcematt]

I think it would be crazy to try and day trade bitcoin right now.  The prices jump around so quick, you might get killed.

Or you might make a mint - depends on your luck I guess