Goomboo's Journal

[Ichthyo]

From my understanding so far, Long = Buy and Short = Sell in simple terms.   Though the terms seem to be more advanced in that they indicate to "short" btc via the few markets that allow shorting transactions.  Long still seems = buy in both cases.  Is my thinking correct?

Yes it is.

The terms "going long" and "going short" are often used in a colloquial way.

Actually the terms relate to having a "position" of some kind.
More precisely, a long position is a position somehow constructed in a way that you gain when the underlying instrument's rate increases.
The opposite is a short position, which is constructed in a way that you gain from the underlying instrument's decline in value.


In a more specific way, you can "go long/short on leverage". This means then that you are not using your own money (or assets) solely, but also use borrowed money (or borrowed instruments in case of short) to increase the size of the position. An increased size allows for greater profits, but also increases the risks in case of a market development against your bet.


The way OP uses these terms here thus just indicates the general direction of your trading activities. How you actually manage to be "long" or "short" is not relevant for the sake of the trading strategy described here.

[1713511508]

1713511508

[Ichthyo]

At the time you could short sell bitcoins easily on Bitcoinica.

Which was supposedly developed over the course of a week by a 17-year old,
and went on to get robbed no less than three times over the course of a month
making it one of the most fascinating and epic failures in the history of Bitcoin.

...and to continue that story, in the course of (in the end unsuccsessful) attempts of the "Intersango guys" to clean up the situation, at some point the source code of Bitcoinica was leaked. Last fall, a new platform called "Bitfinex" was launched by a guy from France, and ths new trading site was initially very much "inspired" by Bitcoinica (judging from the feature set and the behaviour of the engine). In the following months, the operator of Bitfinex gradually reworked that platform; when you trade there now on leverage, you'll use the money of other users which place loans on market for loans, and the actual APY is determined by demand and supply. (Needless to mention: Bitfinex is a new platform, please assess the risk of using such a platform yourself. And never put any money into any Bitcoin related web platform which you can't efford to loose in worst case)

[elux]

[XxionxX]

Subbing to a facinating thread 

[carnitastaco]

Have enjoyed the thread but wtf is going on/happened here?  Luckily I did not have trade access on at the time!

[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.

Followers of the system should still be long and sitting on an unrealized profit of 612%.  I highly encourage you to view these profits with skepticism however - "The trend is your friend until the bend at the end".

Best of luck

The trade should now be closed earning a 692% return.

The recent interest in this thread confirms an unfortunate truth: bull markets bring out greed in traders; bear markets remind them of risk and discipline.

[Frozenlock]

Thank you so much for this journal M. Goomboo.

Before reading this, I was convinced 'buy and hold' was the best strategy.
I wish I had read it before the price went down.
I simply bought and hold since spring 2011.

You've proven me wrong and I thank you for that. 

[statdude]

What software did Goomboo's images come from for backtesting of systems?

What is the best bitcoin sofware for trading Mt Gox and technical analysis?

[lebing]

"Managing partner Gatis Eglitis claims they are now getting 20 calls a day from large asset managers looking to invest up to $100m."
- http://www.ft.com/intl/cms/s/0/b4be7d8e-9c73-11e2-9a4b-00144feabdc0.html#ixzz2PRJpnZqI

This smells like textbook pump and dump.
- There hasn't even been $100 million traded since this article was released, let alone purchased

I highly encourage all participants to ensure that they have an exit plan in place and the discipline to stick with it should price reverse.

Why haven't I read your thread 3 days ago?

Better late than never, now I just have to wait out couple of weeks before the situation settles down.

Thank you for your common sense approach posts.

Out of curiousity, can you tell what your exit point price was?

Hey Silver...  If you are talking about the Crash/Correction 2 days ago... If you follow the instructions on setting up the chart (first page of post... 6 posts down or so)... It looked like this system was calling for Sell at ~$230.  Now the catch is... with the mtgox lag... how much your sell order would have been at that point?  Since this method seems to get you in late and out late (can't tell the future!).  The mtGox issues and lag could have cost serious change but then again probably better then the alternative.  Then again, I barely know what I am talking about.



I have a really noob question...

I have seen previous posts by OP like:

1.  Long Feb 1st - 3rd = +5%
2.  Short Feb 3rd - 7th = +5%
3.  Open long Feb 7th ~ unrealized PNL +1%

From my understanding so far, Long = Buy and Short = Sell in simple terms.   Though the terms seem to be more advanced in that they indicate to "short" btc via the few markets that allow shorting transactions.  Long still seems = buy in both cases.  Is my thinking correct?

Where do you get 230? If you are talking about the 10/21 EMA, they would have crossed at nearly the bottom of the crash...

[Ichthyo]

Where do you get 230? If you are talking about the 10/21 EMA, they would have crossed at nearly the bottom of the crash...

https://i.imgur.com/jCJunCi.png

In you screenshot you set the chandle stick period to daily. But the instructions given on the first page of this thread call for hourly candles.


A similar strategy based on daily sums is heavily long-term trend oriented and basically would classify this oh so horrible crash just as a ditch and wouldn't have created a strong sell signal at all. But Goomboo's strategy is more short-term and reacts on day-to day changes, thus the hourly accounting.

[lebing]

Where do you get 230? If you are talking about the 10/21 EMA, they would have crossed at nearly the bottom of the crash...

https://i.imgur.com/jCJunCi.png

In you screenshot you set the chandle stick period to daily. But the instructions given on the first page of this thread call for hourly candles.


A similar strategy based on daily sums is heavily long-term trend oriented and basically would classify this oh so horrible crash just as a ditch and wouldn't have created a strong sell signal at all. But Goomboo's strategy is more short-term and reacts on day-to day changes, thus the hourly accounting.

I knew I was missing something  

thanks for clarifying

[conspirosphere.tk]

Probably others already said it, but if many follow this technique with the same EMA triggers, it becomes a self-fulfilling prophecy, or at least they could intensify even greatly some price moves when they move all together. (Not that I see anything inherently wrong with this, especially if I can profit on it).

[dandirk]

Probably others already said it, but if many follow this technique with the same EMA triggers, it becomes a self-fulfilling prophecy, or at least they could intensify even greatly some price moves when they move all together. (Not that I see anything inherently wrong with this, especially if I can profit on it).

I think this is a pretty common indicator, though the settings a slightly off of default, and the chart time frame and freq effect the strat alot.  So yes if a good portion of people use only this then I suppose... but people have been doing this type of stuff in tons of markets and it seems to hold and not throw things too far off.

I think this is a great thread/lesson.  I also added MACD, which seems to give the opportunity to see the signals earlier to maximize a little bit.

[Goomboo]

What software did Goomboo's images come from for backtesting of systems?

I backtest using NinjaTrader http://www.ninjatrader.com/
- Instructions for loading into NinjaTrader are found in this thread

What is the best bitcoin sofware for trading Mt Gox and technical analysis?

The best setup right now that I see is:
- Charting bitcoin.clarkmoody.com
- The 10 and 21 EMA are shown on Clark Moody's site by default
- Directly trade through Mt. Gox interface

Personally, I'm pretty pumped up for RTBTC - https://rtbtc.com/

[Goomboo]

In you screenshot you set the chandle stick period to daily. But the instructions given on the first page of this thread call for hourly candles.


A similar strategy based on daily sums is heavily long-term trend oriented and basically would classify this oh so horrible crash just as a ditch and wouldn't have created a strong sell signal at all. But Goomboo's strategy is more short-term and reacts on day-to day changes, thus the hourly accounting.

I currently trade the daily timeframe since it is lower maintenance.  In the past I traded the H1 and H4 timeframe, but only in size after fully backtesting the system.

[Goomboo]

Probably others already said it, but if many follow this technique with the same EMA triggers, it becomes a self-fulfilling prophecy, or at least they could intensify even greatly some price moves when they move all together. (Not that I see anything inherently wrong with this, especially if I can profit on it).

I agree with you.  Interestingly enough, this thread has been around over a year and the system has experienced no degradation of performance.  It would seem that even in such a small market as BTC, mechanically profiting from the trend is viable.

[Frozenlock]

It would seem that even in such a small market as BTC, mechanically profiting from the trend is viable.

Or not... the last few days were terrible. So many false signals. 

[Ichthyo]

It would seem that even in such a small market as BTC, mechanically profiting from the trend is viable.

Or not... the last few days were terrible. So many false signals. 

well...
while it's important to stick to the timings given by the signal (i.e. not to wait too long), I'd recommend to apply a bit of common sense.
If the price is basically just moving sideways, like the past days, and it's clear from the bids/asks that there won't be any significant change, I'd be so bold as to ignore any signal, util leaving that corridor again.

But going in on 7.Apr at $70 and going out at 21.Apr at $120 would create some profit, wouldn't it? Basically the idea is not to profit maximally from any action, but profit well on average and to limit your possible losses

[Frozenlock]

But you never know in advance if the price is just going sideways; plenty of orders are never touching the bids/asks list and are executed immediately.

I do not dispute the long term yield, I was simply pointing out that the last few days were terrible.
In fact there hasn't been so much concentrated false signals for all the clarkmoody historical data available now (about 2 months).

[rezurect]

Simple System, But have been using MT4 for forex, Sierra is kind of unfriendly, and don't like web charts, missing the mt4 tools.
Does anybody know of a free chart feed for MT4? Any broker with MT4 BTC charts?