Goomboo's Journal

[Goomboo]

On Jan 20, Bitcoin was about 5-6 dollars.  If you just simply held on to your bitcoins you would have made over 100% return.

You have missed the point.  In the process of blindly holding regardless of trend direction you have surrendered over 200% unrealized profit to arrive at your 100% return figure - a figure which is fluctuating as we speak.  As your 100% return is dwindling downwards, trend followers' unrealized profits are ticking upwards.

If you continue with your logic of simply holding, then you have absolutely no method of objectively entering and exiting trades.  No matter where price goes, you will be entirely unprepared and you ultimately will suffer for it.

[jimbobway]

On Jan 20, Bitcoin was about 5-6 dollars.  If you just simply held on to your bitcoins you would have made over 100% return.

You have missed the point.  In the process of blindly holding regardless of trend direction you have surrendered over 200% unrealized profit to arrive at your 100% return figure - a figure which is fluctuating as we speak.  As your 100% return is dwindling downwards, trend followers' unrealized profits are ticking upwards.

If you continue with your logic of simply holding, then you have absolutely no method of objectively entering and exiting trades.  No matter where price goes, you will be entirely unprepared and you ultimately will suffer for it.

So let's say I started with 100 BTC on Jan 20th.  Using your method how many bitcoins/USD would I have have now?

[paraipan]

Glad to have you back Goomboo, seems like this community needs some discipline so I hope you have some suggestions for us.

[Goomboo]

So

On Jan 20, Bitcoin was about 5-6 dollars.  If you just simply held on to your bitcoins you would have made over 100% return.

You have missed the point.  In the process of blindly holding regardless of trend direction you have surrendered over 200% unrealized profit to arrive at your 100% return figure - a figure which is fluctuating as we speak.  As your 100% return is dwindling downwards, trend followers' unrealized profits are ticking upwards.

If you continue with your logic of simply holding, then you have absolutely no method of objectively entering and exiting trades.  No matter where price goes, you will be entirely unprepared and you ultimately will suffer for it.

So let's say I started with 100 BTC on Jan 20th.  Using your method how many bitcoins/USD would I have have now?

Yikes, that's a straw man argument in the making!

If we back your "buy and hold" strategy up by 3-6 months before January, you are currently sitting at a massive unrealized loss!  How above the people using the system?  They're up around 207%-265% with maximum drawdown running around 20%.

The problem with trend following is this: it follows the trend.  You will never be in at the exact beginning or the exact end of the market action.  You will always leave profit on the table.  For this reason, "gurus" and the uninformed will always misrepresent your returns and your claims by saying that they bought the bottom or sold the top and are doing much better.  They may be right for a brief time, but they are dead wrong in the long-run (for the most part).

Trend following has massive advantages to buy and hold strategies.  Buy and hold investors have no game plan.  There is nothing that prevents individuals from buying at $30 and holding until...$11.  Buy and hold simply places faith in an upward moving market and acts surprised and angry when prices turn.

[lucif]

Exactly. Buy and hold is a buy and loose.

[jimbobway]

So

On Jan 20, Bitcoin was about 5-6 dollars.  If you just simply held on to your bitcoins you would have made over 100% return.

You have missed the point.  In the process of blindly holding regardless of trend direction you have surrendered over 200% unrealized profit to arrive at your 100% return figure - a figure which is fluctuating as we speak.  As your 100% return is dwindling downwards, trend followers' unrealized profits are ticking upwards.

If you continue with your logic of simply holding, then you have absolutely no method of objectively entering and exiting trades.  No matter where price goes, you will be entirely unprepared and you ultimately will suffer for it.

So let's say I started with 100 BTC on Jan 20th.  Using your method how many bitcoins/USD would I have have now?

Yikes, that's a straw man argument in the making!

If we back your "buy and hold" strategy up by 3-6 months before January, you are currently sitting at a massive unrealized loss!  How above the people using the system?  They're up around 207%-265% with maximum drawdown running around 20%.

The problem with trend following is this: it follows the trend.  You will never be in at the exact beginning or the exact end of the market action.  You will always leave profit on the table.  For this reason, "gurus" and the uninformed will always misrepresent your returns and your claims by saying that they bought the bottom or sold the top and are doing much better.  They may be right for a brief time, but they are dead wrong in the long-run (for the most part).

Trend following has massive advantages to buy and hold strategies.  Buy and hold investors have no game plan.  There is nothing that prevents individuals from buying at $30 and holding until...$11.  Buy and hold simply places faith in an upward moving market and acts surprised and angry when prices turn.

I believe in your system.  I was converted after your first answer to my reply.  I was just asking an honest question on how much profit I would make if I started with 100BTC on Jan 20th.

So, it seems like if I used your system on Jan 20th then I would make less than if I just held on to bitcoins and sold it right now.  But, if I held 3 months before January 20th then I would have massive unrealized losses?  Correct me if I'm wrong because I don't know.  I guess what you are trying to say is that your system generally makes money better and more often than the buy and hold strategy.

[Goomboo]

I believe in your system.  I was converted after your first answer to my reply.  I was just asking an honest question on how much profit I would make if I started with 100BTC on Jan 20th.

So, it seems like if I used your system on Jan 20th then I would make less than if I just held on to bitcoins and sold it right now.  But, if I held 3 months before January 20th then I would have massive unrealized losses?  Correct me if I'm wrong because I don't know.  I guess what you are trying to say is that your system generally makes money better and more often than the buy and hold strategy.

My apologies - I misinterpreted your messages.

If you used the system beginning on January 20th and...

Started with a $500 account and bought as many BTC as you could afford
-You will have earned $382 on top of your $500 investment (76% return on account)

Traded a flat 100 BTC every trade, regardless of BTC/USD exchange rate
-You will have earned $384 in profit

...These results are long only since the only viable way to short is to sit on the sidelines and preserve buying power for a more favorable entry.

To directly answer your question - yes.  If you bought BTC on 1/20/2012 and sold today, you would earn more money than trading.  The problem with this thinking is that absolutely no one would do this.  Who bought in January and said "boy, on October 31st, I'm going to sell!"?  The mentality that leads to this type of decision is very dangerous.

The purpose of this journal has been to directly address this mindset and teach individuals a simple system that allows them to extract profits from the market, provided the individual possesses adequate discipline.  The point of me "waking up" and posting once again was to demonstrate that even though I taught the system 10 months ago, it is still profitable.

[elux]

The purpose of this journal has been to directly address this mindset and teach individuals a simple system that allows them to extract profits from the market, provided the individual possesses adequate discipline.
The point of me "waking up" and posting once again was to demonstrate that even though I taught the system 10 months ago, it is still profitable.

Thanks for the money! One of very few threads here that are literally "worth it".

[Naelr]

Read this entire thread and it is chocked full of good info... I can't say I understand it all but I do have a question about Your Gox Trading bot. 

I seems to be working as designed but in the wrong direction.. it is buying BTC low and selling high... I have been following it with sierra chart  ( have actually had it running for a while but no way to automate buying and selling ) and it seems to be making the trades at the right times just in the wrong direction.  I don't understand why it is doing that?  I tried changing the 10 and 21 around in the options but it goes right back to where it was.  Here i a list of my last few trades done by the Gox Trading bot most recent first. 

2012/11/12 05:03:21   Fee      0.03522777 BTC   5.83606760 BTC
BTC bought: [tid:1352714601197271] 5.87129537 BTC at $11.09999 (0.6% fee)

2012/11/12 05:03:21   In      5.87129537 BTC   5.87129537 BTC
BTC bought: [tid:1352714601197271] 5.87129537 BTC at $11.09999

2012/11/11 15:02:10   Out      2.19407619 BTC   0.00000000 BTC
BTC sold: [tid:1352664130819333] 2.19407619 BTC at $10.70500

2012/11/11 15:02:10   Out      2.80592381 BTC   2.19407619 BTC
BTC sold: [tid:1352664130742807] 2.80592381 BTC at $10.70600

2012/11/09 01:38:37   Deposit      5.00000000 BTC   5.00000000 BTC

2012/11/08 08:03:05   Out      1.10503267 BTC   0.00000000 BTC
BTC sold: [tid:1352379785983397] 1.10503267 BTC at $10.86002

2012/11/06 21:03:22   Fee      0.00294853 BTC   1.10503267 BTC
BTC bought: [tid:1352253802272114] 0.49142100 BTC at $10.94884 (0.6% fee)

2012/11/06 21:03:22   In      0.49142100 BTC   1.10798120 BTC
BTC bought: [tid:1352253802272114] 0.49142100 BTC at $10.94884

2012/11/06 20:10:57   Out      0.50000000 BTC   0.61656020 BTC
BTC sold: [tid:1352250657765748] 0.50000000 BTC at $10.82575

As you can see it is slowly trading me out of BTC or Cash... in just 1 week.  Please advise as to what I should do.

Thanks for all the info

Naelr

[smoothie]

On Jan 20, Bitcoin was about 5-6 dollars.  If you just simply held on to your bitcoins you would have made over 100% return.

LOL +1

OP is retarded thinking putting more effort into trading and making 34% instead of just sitting on bitcoins would have made over 100%.

Bitcoin is moving into stronger and stronger hands with each dip.

Bitcoin bullish Fundamentals that have not changed: FED is printing to INFINITY.

[Goomboo]

Read this entire thread and it is chocked full of good info... I can't say I understand it all but I do have a question about Your Gox Trading bot. 

Glad you enjoyed it!  I didn't create the trading bot so unfortunately I don't know anything about it :/

Best of luck and good trading

[Goomboo]

OP is retarded thinking putting more effort into trading and making 34% instead of just sitting on bitcoins would have made over 100%.

Bitcoin is moving into stronger and stronger hands with each dip.

Bitcoin bullish Fundamentals that have not changed: FED is printing to INFINITY.

Sorry your feel that way.  I encourage you to actually read the entire thread.

Best of luck to you

[Goomboo]

Bitcoin bullish Fundamentals that have not changed: FED is printing to INFINITY.

Lol, saying BTC is going to be influenced by quantitative easing is like saying Chuck E Cheese dollars will depreciate due to the Fed's actions.  It's just silly. 

Haha, but wait, more business is probably transacted in Chuck E Cheese dollars!

[adamstgBit]

Bitcoin bullish Fundamentals that have not changed: FED is printing to INFINITY.

Lol, saying BTC is going to be influenced by quantitative easing is like saying Chuck E Cheese dollars will depreciate due to the Fed's actions.  It's just silly. 

Haha, but wait, more business is probably transacted in Chuck E Cheese dollars!

i am offended by this ridiculous comparison

[Goomboo]

i am offended by this ridiculous comparison

Too bad - separate your investments from your emotions!

And it's a perfectly legit comparison...in fact, laughably so

[adamstgBit]

i am offended by this ridiculous comparison

Too bad - separate your investments from your emotions!

And it's a perfectly legit comparison...in fact, laughably so

Oh come on...

i have to get going now... but when i come back, i will explain why you are wrong.

[Goomboo]

Oh come on...

i have to get going now... but when i come back, i will explain why you are wrong.

Haha, don't worry about it, I'm sticking with my analogy

[notme]

Oh come on...

i have to get going now... but when i come back, i will explain why you are wrong.

Haha, don't worry about it, I'm sticking with my analogy

1. Bitcoin has no centralized authority who can issue more currency
2. Bitcoin has no centralized authority to peg it to a particular valuation in terms of USD

There are many more differences, but these two explain why your analogy doesn't hold when looking at Bitcoin's interaction with traditional economics.

[cypherdoc]

Oh come on...

i have to get going now... but when i come back, i will explain why you are wrong.

Haha, don't worry about it, I'm sticking with my analogy

1. Bitcoin has no centralized authority who can issue more currency
2. Bitcoin has no centralized authority to peg it to a particular valuation in terms of USD

There are many more differences, but these two explain why your analogy doesn't hold when looking at Bitcoin's interaction with traditional economics.

correct.  Bitcoin's very existence is evidence of its interaction with the real economy.  what message did Satoshi publish in the first block?

just b/c the economy isn't the size we'd all like so far doesn't not mean the interaction is not there.  its just at a nascent level.

[Goomboo]

Annnd... you should now be long BTC due to the 10/21 cross.  Except, this time you're able to purchase 3 to 9% more BTC since you protected your USD from declining prices during the past month.