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Author Topic: Goomboo's Journal  (Read 250797 times)
bitcoinsrus
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April 24, 2014, 07:29:47 PM
 #1141

Using the "load raw data" all data, daily, taken from bitcoincharts and removing the Inf observations I had EMA21/EMA10 cross on 2014-04-20 for EMA on close price and day after when EMA on vwap price. Also validated the two interfaces from bitcoincharts, any differences are related to rounding issue and are marginal enough.
Regarding ZeroBlock, it looks great, but does it support automated trading?

Forgive me for sounding like a total noob, but can someone please explain what EMA's are etc and what the content of his post is talking about?

in a nutshell:

the price bounces up and down a lot (as it comes from the newest trade). EMA (Exponential Moving Average) is a smoother version of a line (the price in this case). the smoothness of an EMA line can be adjusted, by settings the number of previous periods (points) it has to "average", per periods. an EMA that is set to "average" the previous 21 periods (EMA21), is smoother than one set to the last 10 periods (EMA10). "averaging" more periods results in a smoother but less responsive line. 1 period is a time frame (duration) that could be anything you prefer (ex: 1minute, 3hours, 1day, 2weeks etc...). (periods usually contain multiple trades, and it's normal to take the closing (a.k.a. last) price of that period to represent that period, but that's a more technical detail)

in this thread we've been discussing a simple method from Goomboo (EMA Crossover method?), where you take the 21 day EMA (EMA21) and the 10 day EMA (EMA10). when the more responsive EMA10 crosses the slower EMA21:
- from the bottom, then it's a buy signal
- from the top, then it's a sell signal
(of course there is more advice about using this method in this thread)

http://bitcoincharts.com/ has price data for lot's of Bitcoin exchanges that can be loaded into excel or a different program to try things. it looks like MusX was complaining about some of the data being faulty because it contains the values Inf (infinite), which is not a price.

I appreciate the time it took you to explain EMA in detail.  Thanks
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SamboNZ
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April 27, 2014, 07:56:07 AM
 #1142

Hi Guys,

I am toying with the idea of getting into some BTC trading and this awesome thread cropped up during a search on the subject.  There's some excellent information in here, thanks Goomboo for your massive contribution to the BTC community!  However, I am torn between spending the time and money to learn how to trade myself vs getting a real expert to do it for me.

I would really like to be able to do this myself, and while I believe I have the discipline, intelligence and personality required to be successful at it, I would be doing it part time (although conceivably with the help of some bots) and frankly, given the massive potential pitfalls that this kind of endeavor entails, I'm not sure that my available time is going to be enough to be successful at it.

On the other hand, I would be equally happy to let a true, full time expert do all the hard work for me in exchange for a percentage of the profits.  Less effort for me, more time for other, probably more important things (like being a Father to my 2 young daughters).

Probably the most relevant post to this subject is one from Goomboo basically saying 'DON'T DO IT!!' Hahaha Cheesy

So after researching all this, I know how to start going about learning how to trade, but what I am having huge problems finding is experienced, legitimate, successful BTC traders who I can trust with my money.  There are a couple on CryptoStocks which look ok, but it's almost impossible to verify who's legit and who's scamming on that site as most of the companies are not verified and offer very little in the way of other ways to verify themselves.

I see the 'Currensee' site mentioned in this thread, which is a pretty cool concept, but I'm after a BTC based trading company.  Does anyone have any suggestions / recommendations?


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April 27, 2014, 08:26:33 AM
 #1143

So after researching all this, I know how to start going about learning how to trade, but what I am having huge problems finding is experienced, legitimate, successful BTC traders who I can trust with my money.  There are a couple on CryptoStocks which look ok, but it's almost impossible to verify who's legit and who's scamming on that site as most of the companies are not verified and offer very little in the way of other ways to verify themselves.

I see the 'Currensee' site mentioned in this thread, which is a pretty cool concept, but I'm after a BTC based trading company.  Does anyone have any suggestions / recommendations?

I don't think such a managed fund you are seeking for exists. It's rather tough to continually successfully beat Buy&Hold.

There are dozens of software packages on this forum who claim to connect to the exchanges and trade successfully for you, but when you ask for past performances you see they change the definition of the success and measure against the starting fiat capital.
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April 27, 2014, 08:46:32 AM
 #1144

I don't think such a managed fund you are seeking for exists. It's rather tough to continually successfully beat Buy&Hold.

I dunno man, the way I see it buy and hold has been a bad idea since late November:


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April 27, 2014, 09:24:07 AM
 #1145

I don't think such a managed fund you are seeking for exists. It's rather tough to continually successfully beat Buy&Hold.

I dunno man, the way I see it buy and hold has been a bad idea since late November:






Try scrolling out a year with your timeline and then tell me which strategy is better.

Bro, do you even blockchain?
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April 27, 2014, 09:52:21 AM
 #1146

LOL.

Not sure, what you mean.  Are you suggesting that no-one can beat buy and hold!?

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April 27, 2014, 09:54:05 AM
 #1147

LOL.

Not sure, what you mean.  Are you suggesting that no-one can beat buy and hold!?

Are you suggesting that the people buying and holding should sell right now?

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April 27, 2014, 09:58:16 AM
 #1148

Are you suggesting that the people buying and holding should sell right now?

I'm suggesting that if you were starting a position as of today, based on obvious trends currently in play, buying and holding might not give very good results in future.

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April 28, 2014, 01:14:18 AM
 #1149

However, I am torn between spending the time and money to learn how to trade myself vs getting a real expert to do it for me.

I would really like to be able to do this myself, and while I believe I have the discipline, intelligence and personality required to be successful at it, I would be doing it part time (although conceivably with the help of some bots) and frankly, given the massive potential pitfalls that this kind of endeavor entails, I'm not sure that my available time is going to be enough to be successful at it.

I'm not a financial advisor, so I am not qualified to give you direct advice for your situation, but here's my opinion on people looking to get into trading:

My advice to someone wanting to get into this business but not willing to put in the work necessary to beat the competition - don't.  The S&P 500 historically returns around 11.96% per year - in the long run, the casual participant is significantly better off by buying an index ETF (US: SPY is good) and focusing on the day job.  66% of currency traders consistently lose money in every single quarter.  The odds don't favor speculative traders.

This is my personal opinion - I'm not a registered financial advisor.  Best of luck.


So after researching all this, I know how to start going about learning how to trade, but what I am having huge problems finding is experienced, legitimate, successful BTC traders who I can trust with my money.  There are a couple on CryptoStocks which look ok, but it's almost impossible to verify who's legit and who's scamming on that site as most of the companies are not verified and offer very little in the way of other ways to verify themselves.

I see the 'Currensee' site mentioned in this thread, which is a pretty cool concept, but I'm after a BTC based trading company.  Does anyone have any suggestions / recommendations?

Even in the regulated markets, there are very few traders that you can trust.  Results shown are hypothetical or displayed in such a way as to mask the destructive habits of traders.  For example, I can make a strategy in 10 minutes that will produce a beautiful performance chart but is destined to fail.  For an off-the-cuff estimate, I'd say that 90% of traders offering their services fall into one of the following categories:

1) Scammers presenting false results with the intention of outright theft
2) Tricksters realizing that their system is the result of curve-fitting and martingale betting, hoping to make a quick buck from a few weeks of successful performance before the account is destroyed
3) Naive individuals who think that a few dozen successful trades equates to trading success

I am having huge problems finding is experienced, legitimate, successful BTC traders who I can trust with my money.

To speak directly to your question: it is difficult to find a successful, legitimate, and experienced trader in any market, let alone BTC, where the lack of regulation results in even greater dishonesty.  Finding good traders and money managers can be so difficult that there is a subset of the money management industry which tries to identify the best.  If I were tasked with hiring good traders, I would require the following:

1) Low winning percentage.  This is perhaps the biggest indicator of a troubled trader.  The outcome of any trade is essentially random.  Bad traders have a psychological need to win individual (random) trades, so they will quickly cut trades that go in their favor and hold losing trades until the market turns around.  This is a deadly flaw which will eventually result in account destruction.  Losing traders love to boast about how successful they are "I win 95% of my trades".  If you win $1 for 95 out of 100 trades but lose $1000 on the other 5%, you're a terrible trader in my book.

As one of the Market Wizards from Jack Schwager's book said:

"One common adage on this subject that is completely wrongheaded is: you can't go broke taking profits. That's precisely how many traders do go broke. While amateurs go broke by taking large losses, professionals go broke by taking small profits. The problem in a nutshell is that human nature does not operate to maximize gain but rather to maximize the chance of gain. The desire to maximize the number of winning trades (or minimize the number of losing trades) works against the trader. The success rate of trades is the least important performance statistic and may even be inversely related to performance."
- William Eckhardt

2) Average winning trade gain multiples larger than average losing trade loss.  A good trader understand that he's just playing a numbers game - he must cut his losing trades quickly and let his winning trades travel as far as the market provides.  For example, if a trader makes an average return of 5% on winning trades but only loses around 1% on his losing trades, he can be successful by winning 30% of all trades.

3) Willingness to display track record and provide account statements so that you can reproduce the track record yourself.

4) Humility.  You can't work in a field in which success means losing money on 70-80% of your decisions and make bombastic claims about calling the market direction.

There are several other criteria I could rattle off, but these will filter out most of the bad apples - assuming you can even get honest trading results in the first place.
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April 28, 2014, 09:04:57 AM
 #1150

^
this


LOL.

Not sure, what you mean.  Are you suggesting that no-one can beat buy and hold!?

I'm suggesting that only someone who has first-hand experience in trading can testify how hard it is to beat B&H in the long run. Looking in the rear-view mirror is important, but means very little. Finding people who consistently beat B&H is very hard, acquiring their services is even harder because chances are they are not lurking to get your money to trade with it, they probably have enough capital to work with.
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April 28, 2014, 01:24:04 PM
 #1151

Thanks for the advice guys, much appreciated!

So, playing the devil's advocate on the slight side-issue of the BTC price trend, someone tell me why the BTC history isn't following this well known graph:


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April 28, 2014, 02:39:13 PM
 #1152

Oh, it's following that graph.  Don't worry though -- the bear trap is almost over.   Grin

I think we have seen that picture enough times now.

-.-. -.-. -- ..-.
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May 12, 2014, 11:17:29 PM
 #1153

Anyone aware of a hedge fund (filed with SEC) trading BTC for profit?  It seems that the handful of existing funds are acting as price exposure for investors.

Anyone aware of any BTC liquidity providers?
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May 13, 2014, 12:17:34 AM
 #1154

Anyone aware of a hedge fund (filed with SEC) trading BTC for profit?  It seems that the handful of existing funds are acting as price exposure for investors.

Anyone aware of any BTC liquidity providers?

Not sure if this is a useful answer to you, but it seems to me that the mysterious exchange hitbtc.com has a liquidity provider on board. Could be hitbtc itself or some external business.

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May 13, 2014, 12:39:17 AM
 #1155

Are you suggesting that the people buying and holding should sell right now?

I'm suggesting that if you were starting a position as of today, based on obvious trends currently in play, buying and holding might not give very good results in future.


You've gotta be kidding, right?  There are only a few days or weeks out of each bitcoin downturn per half year/ or year where the price completely bottoms out.  Where bitcoin is left for dead by the whale speculators and the volume plummets to a trickle.  When there is a lot of fear and uncertainty about bitcoin's future.  These provide the absolute BEST buying opportunities bar none. And here's a clue for you, WE ARE IN THE MIDST OF ONE RIGHT NOW.  Would you rather wait until bitcoin is on an uptrend and panic buy between $600-800?  Or even wait until it's back to $1000? You know, a confirmed uptrend can easily lose steam and turn into a downturn as well, so an uptrend is not a guarantee of anything either.

When longs talk about taking a long position, they are talking about holding for 1-2 years.  Not 5 minutes, or 3 months, or 6 months, or ....
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May 13, 2014, 05:16:43 AM
 #1156

Anyone aware of a hedge fund (filed with SEC) trading BTC for profit?  It seems that the handful of existing funds are acting as price exposure for investors.

Anyone aware of any BTC liquidity providers?

Not sure if this is a useful answer to you, but it seems to me that the mysterious exchange hitbtc.com has a liquidity provider on board. Could be hitbtc itself or some external business.

cavirtex in canada has also publicly stated they have a liquidity provider.
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May 13, 2014, 10:39:33 PM
 #1157

Anyone aware of a hedge fund (filed with SEC) trading BTC for profit?  It seems that the handful of existing funds are acting as price exposure for investors.

Anyone aware of any BTC liquidity providers?

Not sure if this is a useful answer to you, but it seems to me that the mysterious exchange hitbtc.com has a liquidity provider on board. Could be hitbtc itself or some external business.

cavirtex in canada has also publicly stated they have a liquidity provider.

Thanks for the intel
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May 14, 2014, 06:36:41 AM
 #1158

Gut instinct is telling me things are uncertain and I should be careful, maybe sell of my position while I can still break even. Logic tells me that I'm not the only one feeling this, markets sentiment feels shaky, china situations still bad, no improvement in price, things seem dire, BTC might be going down the drain and I can still get out now.

I am going to increase my position in BTC by 150% in the coming days. This is the first time trading in which I am going to ignore all these above intuitions. Every time I had this uncertainty I should have invested. Every time the market seemed so uncertain I should have invested. Time to roll the dice, see you on the other side.
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May 14, 2014, 07:01:31 AM
 #1159

Gut instinct is telling me things are uncertain and I should be careful, maybe sell of my position while I can still break even. Logic tells me that I'm not the only one feeling this, markets sentiment feels shaky, china situations still bad, no improvement in price, things seem dire, BTC might be going down the drain and I can still get out now.

I am going to increase my position in BTC by 150% in the coming days. This is the first time trading in which I am going to ignore all these above intuitions. Every time I had this uncertainty I should have invested. Every time the market seemed so uncertain I should have invested. Time to roll the dice, see you on the other side.

So you didnt read anything in this thread and still follow your gut?

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May 14, 2014, 12:47:27 PM
 #1160

I am going to increase my position in BTC by 150% in the coming days. This is the first time trading in which I am going to ignore all these above intuitions. Every time I had this uncertainty I should have invested. Every time the market seemed so uncertain I should have invested. Time to roll the dice, see you on the other side.

I support this attitude.  If hundreds, thousands more people like you were able to take a leap of faith and buy some bitcoin right now, we'd be out of this downturn and cruisin' into a solid bull market within 48 hours.

"Be Fearful When Others Are Greedy, and Greedy When Others Are Fearful" -Warren Buffett
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