Vote for Bitcoinica Leverage Change Proposal

[jhajduk]

Almost 4 trillion dollars turns over each day in forex

Todays volume is maybe 2 million?

A lot of people have enough cash to take a bit hit into 2 million dollars of volume.

Nobody has enough money to effect 4 trillion dollars.

[1714119952]

1714119952

[cypherdoc]

I think more important than anything is that the asterisk goes away.  It gives away to much information, and restricts the market.

What happened today is a result of people exploiting this information.

You should keep your customer's positions, and even the aggregate information of their positions, confidential.

If lowering the leverage for large accounts allows you to avoid the asterisk then do it,  at least until you build up more reserves.

I agree with this.  Zhou, I think this is important -- I understand you want to be as honest as possible, but there is a such thing as being "honest to a fault".

We can't hide it anyway. If we don't have reserve, we will become a bucket shop if we don't tell our customers to stop buying/selling. So after all the only way is to distribute the trading power evenly to everyone.

I wonder what Forex brokers do when they run out of reserves?  Does that happen?  I have research to do...
Anyone who knows a lot about Forex, don't hesitate to provide clarity for me on this point.

I thought I just read...Aren't you the one who's going to be writing the documentation for Bitcoinica when it comes to their Forex-based trading ?

LOL.  Blind leading the blind.

[Eveofwar]

I think more important than anything is that the asterisk goes away.  It gives away to much information, and restricts the market.

What happened today is a result of people exploiting this information.

You should keep your customer's positions, and even the aggregate information of their positions, confidential.

If lowering the leverage for large accounts allows you to avoid the asterisk then do it,  at least until you build up more reserves.

I agree with this.  Zhou, I think this is important -- I understand you want to be as honest as possible, but there is a such thing as being "honest to a fault".

We can't hide it anyway. If we don't have reserve, we will become a bucket shop if we don't tell our customers to stop buying/selling. So after all the only way is to distribute the trading power evenly to everyone.

I wonder what Forex brokers do when they run out of reserves?  Does that happen?  I have research to do...
Anyone who knows a lot about Forex, don't hesitate to provide clarity for me on this point.

I thought I just read...Aren't you the one who's going to be writing the documentation for Bitcoinica when it comes to their Forex-based trading ?

LOL.  Blind leading the blind.

I mean, I'm all for hiring others to do work for you...but I mean...this just kinda disturbed me a little LOL.

[Crypt_Current]

My job has become to provide documentation on how Bitcoinica works.

This will include:
-- A basic tutorial of what to expect when pressing the various buttons / placing orders at Bitcoinica.
-- A very basic comparison of Bitcoinica to Forex, pointing out the most basic similarities / dissimilarities.

It might include other things.

What it will NOT include:
-- Professional trading advice
-- Any general information whatsoever on trading Forex (aside from comparing / contrasting it with Bitcoinica).

EDIT:  My experience with Bitcoinica and customer service is what makes me suitable for this position.

[byronbb]

lower max trade to 10BTC and raise leverage to 100:1. You just want gamblers not institutional traders.

if you don't trade on Bitcoinica please leave this discussion to those who do.

I'll rephrase: Lower the maximums to the point where bitcoinica can no longer move market 2$ a day. The purpose of bitcoinica from zhou's perspective is to make money, not deal with endless hassles and react to charges of manipulation and skulduggery. And yes I use bitcoinica to try and earn some money back off my devaluing bitcoins, but am only a small timer.


edit

Well looks like the proposal actually has this effect.

[zhoutong]

I think more important than anything is that the asterisk goes away.  It gives away to much information, and restricts the market.

What happened today is a result of people exploiting this information.

You should keep your customer's positions, and even the aggregate information of their positions, confidential.

If lowering the leverage for large accounts allows you to avoid the asterisk then do it,  at least until you build up more reserves.

I agree with this.  Zhou, I think this is important -- I understand you want to be as honest as possible, but there is a such thing as being "honest to a fault".

We can't hide it anyway. If we don't have reserve, we will become a bucket shop if we don't tell our customers to stop buying/selling. So after all the only way is to distribute the trading power evenly to everyone.

I wonder what Forex brokers do when they run out of reserves?  Does that happen?  I have research to do...
Anyone who knows a lot about Forex, don't hesitate to provide clarity for me on this point.

I thought I just read...Aren't you the one who's going to be writing the documentation for Bitcoinica when it comes to their Forex-based trading ?

LOL.  Blind leading the blind.

I mean, I'm all for hiring others to do work for you...but I mean...this just kinda disturbed me a little LOL.

I'm fine with this. I check Rails API docs all the time when I code.

[notme]

lower max trade to 10BTC and raise leverage to 100:1. You just want gamblers not institutional traders.

if you don't trade on Bitcoinica please leave this discussion to those who do.

I'll rephrase: Lower the maximums to the point where bitcoinica can no longer move market 2$ a day. The purpose of bitcoinica from zhou's perspective is to make money, not deal with endless hassles and react to charges of manipulation and skulduggery. And yes I use bitcoinica to try and earn some money back off my devaluing bitcoins, but am only a small timer.

Thank you... you're rephrase is 1000x more informative of your opinion and relevant.

[cheat_2_win]

The leverage Bitcoinica can handle is its problem to decide. Perhaps you need to cap everyone at 2.5:1 or 5:1 until you can grow the reserves more. I imagine that how that affects your profitability would also be part of striking a balance.

This sounds reasonable to me.

+1

[speeder]

I strongly agree...


Also: While I was trading at 2.5:1 I was only having profits... As soon as I switched to 5:1 ...

[notme]

For the record, I disagree.  Personally, my account is set to 10:1, but I rarely go above 3:1, including my BTC margin.  Just because you have "tradable balance" doesn't mean you should trade.

[notme]

i strongly disagree

For the record, I disagree.  Personally, my account is set to 10:1, but I rarely go above 3:1, including my BTC margin.  Just because you have "tradable balance" doesn't mean you should trade.

* is bad. Gives too much away. This would help eliminate it.

This may help it appear less often, but it can't eliminate it.  I actually like the *, but I love any additional information I can get.

[legitnick]

What about the greedy bastard variable?

[notme]

What about the greedy bastard variable?

What about it?  Greedy bastards get liquidated, simple as that.  I don't mind the market seizing a little to shake them out, and I trade with low leverage.

[ArticMine]

I agree that. Most of our profits come from 2:5 traders and 5:1 traders. Not only 10:1 traders lost a lot themselves during volatile periods, we lost a lot due to market slippage as well.

Which begs the question as to why you are offering 10:1 leverage for small accounts under your new proposal? The proposal is a step in the right direction; however given the volatility of Bitcoin I would suggest at most 2.5:1 leverage for everyone regardless of account size. I am not a Bitcoinica customer by the way.

[mobodick]

I think this is great!

I have felt for the last few months that bitcoin has too little market depth in general to justify large margins on large positions.
Resolving positions results in very big swings.

[Dutch Merganser]

Code:

`1.0 : 1 	4% (25:1) 	92% 	96% 	Unlimited
  2.5 : 1 	4% (25:1) 	32% 	36% 	Unlimited
  5.0 : 1 	4% (25:1) 	12% 	16% 	$20,000
  10.0 : 1 	4% (25:1) 	2% 	6% 	$2,000

WTF is this shit ? only 2 fucking dollars  

I believe the comma is *not* being used as a decimal point in this context. I could be mistaken. It's a good thing the word "billion" doesn't appear here, otherwise we might have to ask if 10^9 or 10^12 is meant 

[Technomage]

I'm glad to see most voters have some sense. This proposal is critical in many ways, it's the only good way to reduce the issue of the Bitcoinica "asterisk". The bigger players have to be limited somehow until Bitcoinica has enough money to back it up. They can always change it back later when they have more reserves.

More than anything this was a learning process for everyone involved. But it was undoubtedly caused by the fact that people had too much information. It wasn't an issue of guessing or having a hunch, everyone knew people went long big time because Bitcoinica's reserves were low. Without this indicator it would've been more difficult and a much bigger risk to do what was done.

I hope this is implemented asap.

[Otoh]

I have 10:1 leverage (or at least I did until it got pulled & then I searched the forum for why as I didn't see any explanation where the leverages available on Bitcoinica show), I rarely use though more than 2:1 with plenty of margin to account for just the sort of large price change that's happened & I'm personally fine if peeps want to make those swings using 10:1 leverage or whatever, if it can happen it will & though it's sad to be on the wrong side of these swings (which I have been sometimes) it quickly helps to teach one about leverage, volatility & risk tolerance & one can arrange a very low risk strategy for taking advantage of these - I voted no changes because I like the kinda Wild West anarchy of these relatively early BTC days, once it gets high & stable with large market cap then we will maybe even look back fondly to the Khoutonging era, anyway I don't know enough about Bitcoinica to state for sure that it wouldn't be better to implement these lower limits & if it helps keep Bitcoinica afloat then I'm all for that, whether it can be enforced I doubt but as Khou lost money by it being the way it was then he's every right to adapt the rules of his house in order to keep it profitable, trying to protect newbs & incautious/unlucky players from being Khoutonged is just folly in my opinion & a red herring

[michaelmclees]

How about you just untie yourself from MtGox.  You've become a dog wagging tail and while I personally find nothing wrong with it, so long as you advertise very clearly your lack of funds when people deposit money (rather than when they attempt to liquidate), if you want to make people here happy, you're going to need to operate more like a dark pool.

[teflone]

How about you just untie yourself from MtGox.  You've become a dog wagging tail and while I personally find nothing wrong with it, so long as you advertise very clearly your lack of funds when people deposit money (rather than when they attempt to liquidate), if you want to make people here happy, you're going to need to operate more like a dark pool.

Im glad im not the only one that sees this need..