Goomboo's Journal

[Goomboo]

One last thing before I sign out,

This thread is directed at individuals who are trying to trade bitcoin for a profit (myself included) - not the long term investors / developers / enthusiasts.  My hope is twofold - 1.  Give a reality check to people risking their money and 2.  Give you a way of actively, impartially, and rationally approaching the markets.  It's definitely not the "Holy Grail", but it's a system and if you stick with it, you are miles ahead of most people on the other side of your trades.  You still have a high probability of losing it all - commissions + spread + volatility are really, really rough in this market, let alone the fact that the market can't be explained by technical analysis as well as other, more liquid markets.

For those of you who are trading without a plan (by the seat of your pants), betting it all on the next huge move, hoping to make a quick billion...let's say you actually did.  What if you did 10:1 leverage and sold your house and made a few million dollars?  Now you're rich, but not for long.  The character traits - rash, impulsive, irrational, gambler - are still there.  You never faced your flaws and you more than likely will risk this windfall profit again.  You've earned your million and suddenly you see an opportunity to turn it into a billion!  Quick, take the trade!  Wait, this time it's not doing what it did last trade ... You see where I'm going with this?

It is how we manage our risk that defines us as traders.  I've worked for two trading firms and been on 10 different trading floors where millions (billions) are made and lost each year and I can tell you that we don't care if you can make a lot of money.  If I were hiring you and giving you a trading book, I care that you won't lose my money.  I'd rather have 200 traders who can consistently grind out profits at a low risk than one trader who can earn more than all the others combined yet has a significant chance of failure.

If you approach risk-taking haphazardly, throwing caution to the wind, rather than with a tested plan, you will eventually face ruin.

[1715384497]

1715384497

[1715384497]

1715384497

[RyNinDaCleM]

Great thread!
Advice to live trade by!

[StewartJ]

It is how we manage our risk that defines us as traders.  I've worked for two trading firms and been on 10 different trading floors where millions (billions) are made and lost each year and I can tell you that we don't care if you can make a lot of money.  If I were hiring you and giving you a trading book, I care that you won't lose my money.  I'd rather have 200 traders who can consistently grind out profits at a low risk than one trader who can earn more than all the others combined yet has a significant chance of failure.

If you approach risk-taking haphazardly, throwing caution to the wind, rather than with a tested plan, you will eventually face ruin.

Sage words indeed.

[Timbo925]

Again great new content in this topic.
Just woke up and checked the charts. Looks like their is a new crossover.
Last crossover was pretty week so this should be a better one.

Just went short again @ 6.2 (2.5% loss on last trade)

edit: damm maybe was a false crossover. Hope I didn't jump the gun to fast 

[notme]

Again great new content in this topic.
Just woke up and checked the charts. Looks like their is a new crossover.
Last crossover was pretty week so this should be a better one.

Just went short again @ 6.2 (2.5% loss on last trade)

edit: damm maybe was a false crossover. Hope I didn't jump the gun to fast 

After two failed crossovers, the indicator seems to be bullish again.  Enjoy the shakedown if you continue to use this signal in the short term.

[Timbo925]

Indicators still close together. But I made a mistake here I think. I'll keep my position until my loss on this trade is 4% (current 3%). The extra 1% risk is justified imo because the lines are still quite close together so still could go down.

I also added a new moving-average simple to my graph. Will just see if I can use this for a extra indicator. The simple moving-avarage reacts less to current prices so I think this will keep me informed off the overall trend.

[YoYa]

Again great new content in this topic.
Just woke up and checked the charts. Looks like their is a new crossover.
Last crossover was pretty week so this should be a better one.

Just went short again @ 6.2 (2.5% loss on last trade)

edit: damm maybe was a false crossover. Hope I didn't jump the gun to fast 

After two failed crossovers, the indicator seems to be bullish again.  Enjoy the shakedown if you continue to use this signal in the short term.

Somehow I don't think enough traders would choose to change their strategy to enable this as a shakedown. Think about it, one thread, on one bb forum on the entire internet to move a market.... :/

With regard to the indicator, this is a perfect example of why you stick with your strategy including stop loss value which should be predetermined before hand and not on the basis of the indicator itself. It's been mentioned more then a few times in this thread already why having a strict plan and employing the discipline to stick to it is important. This is a perfect example of that.

[notme]

Again great new content in this topic.
Just woke up and checked the charts. Looks like their is a new crossover.
Last crossover was pretty week so this should be a better one.

Just went short again @ 6.2 (2.5% loss on last trade)

edit: damm maybe was a false crossover. Hope I didn't jump the gun to fast 

After two failed crossovers, the indicator seems to be bullish again.  Enjoy the shakedown if you continue to use this signal in the short term.

Somehow I don't think enough traders would choose to change their strategy to enable this as a shakedown. Think about it, one thread, on one bb forum on the entire internet to move a market.... :/

With regard to the indicator, this is a perfect example of why you stick with your strategy including stop loss value which should be predetermined before hand and not on the basis of the indicator itself. It's been mentioned more then a few times in this thread already why having a strict plan and employing the discipline to stick to it is important. This is a perfect example of that.

In a market this size, 2 people trading with a $1000 each would make targeting them worth it, and many people here don't have the experience to do anything but follow advice.  All I can say for sure though is that the market has been acting funny around the crossovers.  Remember... this one thread on one forum is likely seen by half the major players.  This is still a tiny community.  It's not like moving the gold market.

[YoYa]

In a market this size, 2 people trading with a $1000 each would make targeting them worth it, and many people here don't have the experience to do anything but follow advice.  All I can say for sure though is that the market has been acting funny around the crossovers.  Remember... this one thread on one forum is likely seen by half the major players.  This is still a tiny community.  It's not like moving the gold market.

More like 10K to move things, 1000 will only get ya a few pennys on the dollar. With regard to people having no experience.....I think they generally stay out of the speculation forum because if you come here it is only for the purpose of gaining experience and should you be in that category, the first lesson of all should be risk and I think that is something mentioned more often then not.

As for major players, again things are a bit diffuse in that sense. I've a feeling that a lot of full time traders would just go straight to gox and not give a damn for anything else around bitcoin. But we both face a problem here in terms of our respective arguments in that neither of us can use quantifiable metrics to prove what we are saying.

I agree that bitcoin is a malleable market, but I would argue that the scale involved is larger then you are crediting. Not as immovable as the gold market, but not as easily shaken as a penny stock either.

[notme]

In a market this size, 2 people trading with a $1000 each would make targeting them worth it, and many people here don't have the experience to do anything but follow advice.  All I can say for sure though is that the market has been acting funny around the crossovers.  Remember... this one thread on one forum is likely seen by half the major players.  This is still a tiny community.  It's not like moving the gold market.

More like 10K to move things, 1000 will only get ya a few pennys on the dollar. With regard to people having no experience.....I think they generally stay out of the speculation forum because if you come here it is only for the purpose of gaining experience and should you be in that category, the first lesson of all should be risk and I think that is something mentioned more often then not.

As for major players, again things are a bit diffuse in that sense. I've a feeling that a lot of full time traders would just go straight to gox and not give a damn for anything else around bitcoin. But we both face a problem here in terms of our respective arguments in that neither of us can use quantifiable metrics to prove what we are saying.

I agree that bitcoin is a malleable market, but I would argue that the scale involved is larger then you are crediting. Not as immovable as the gold market, but not as easily shaken as a penny stock either.

I would say it's similar to a penny stock's volatility for a given volume.  The difference is, millions of people can trade that penny stock with accounts they already have.

The market was repeatedly held down to keep the 10,21 close to crossover.  After this, it shot up.  To me, that says someone was using this signal to milk a few cheap coins from suckers.

[sgbett]

But that would mean somebody would have to have the experience to know that would work, and to be able to present it as a solid trading strategy. To sound convincing they would also need some experience in the market in general so they wouldn't look like a novice. I don't think I've seen anything like that recently...

[Goomboo]

Again great new content in this topic.
Just woke up and checked the charts. Looks like their is a new crossover.
Last crossover was pretty week so this should be a better one.

Just went short again @ 6.2 (2.5% loss on last trade)

edit: damm maybe was a false crossover. Hope I didn't jump the gun to fast 

This is the difficulty with trading on these short timeframes - I'm still long at $6.35 and by following the system I should have reversed and then went long again.  I haven't looked at BTC in 24 hours...and yeah, that crossover was a little nasty...

[Goomboo]

In a market this size, 2 people trading with a $1000 each would make targeting them worth it, and many people here don't have the experience to do anything but follow advice.  All I can say for sure though is that the market has been acting funny around the crossovers.  Remember... this one thread on one forum is likely seen by half the major players.  This is still a tiny community.  It's not like moving the gold market.

More like 10K to move things, 1000 will only get ya a few pennys on the dollar. With regard to people having no experience.....I think they generally stay out of the speculation forum because if you come here it is only for the purpose of gaining experience and should you be in that category, the first lesson of all should be risk and I think that is something mentioned more often then not.

As for major players, again things are a bit diffuse in that sense. I've a feeling that a lot of full time traders would just go straight to gox and not give a damn for anything else around bitcoin. But we both face a problem here in terms of our respective arguments in that neither of us can use quantifiable metrics to prove what we are saying.

I agree that bitcoin is a malleable market, but I would argue that the scale involved is larger then you are crediting. Not as immovable as the gold market, but not as easily shaken as a penny stock either.

I would say it's similar to a penny stock's volatility for a given volume.  The difference is, millions of people can trade that penny stock with accounts they already have.

The market was repeatedly held down to keep the 10,21 close to crossover.  After this, it shot up.  To me, that says someone was using this signal to milk a few cheap coins from suckers.

I'm cautious about assigning motives to market action.  Who is to say what "cheap" and "expensive" are?  In my honest opinion, BTC is massively overvalued, but I am still long because only price pays and when I act on my emotion and feeling rather than what is actually happening in the market, I'm not trading, I'm gambling.

[notme]

Only 21 million ever.  I'm investing for retirement with a 30+ year timeframe.  I doubt I'm the only one with such an attitude.  At that scale, BTC will either be worth 0 or at least 10.

[Goomboo]

Again great new content in this topic.
Just woke up and checked the charts. Looks like their is a new crossover.
Last crossover was pretty week so this should be a better one.

Just went short again @ 6.2 (2.5% loss on last trade)

edit: damm maybe was a false crossover. Hope I didn't jump the gun to fast 

After two failed crossovers, the indicator seems to be bullish again.  Enjoy the shakedown if you continue to use this signal in the short term.

Somehow I don't think enough traders would choose to change their strategy to enable this as a shakedown. Think about it, one thread, on one bb forum on the entire internet to move a market.... :/

With regard to the indicator, this is a perfect example of why you stick with your strategy including stop loss value which should be predetermined before hand and not on the basis of the indicator itself. It's been mentioned more then a few times in this thread already why having a strict plan and employing the discipline to stick to it is important. This is a perfect example of that.

In a market this size, 2 people trading with a $1000 each would make targeting them worth it, and many people here don't have the experience to do anything but follow advice.  All I can say for sure though is that the market has been acting funny around the crossovers.  Remember... this one thread on one forum is likely seen by half the major players.  This is still a tiny community.  It's not like moving the gold market.

When it comes to numbers in the market, it almost always makes sense to actually calculate out the values so as to have an idea of what is "real".

Here's a picture showing how much money needs to flow into or out of the market to move it to certain prices.  The color coding is what I believe to be the "difficulty" of actually achieving those prices.



Also, keep in mind that a moving average is a function of the number of periods that it uses.  If a person were to be manipulating it, they would have had to have been actively trading and influencing closing prices for the past 21 hours, or at least for the 3-4 hours where the averages touched.

[Goomboo]

Only 21 million ever.  I'm investing for retirement with a 30+ year timeframe.  I doubt I'm the only one with such an attitude.  At that scale, BTC will either be worth 0 or at least 10.

You just revealed something about yourself - a tendency towards an upward bias.  The currency markets are unlike the stock markets in that there is no "upward" bias.  Stocks are driven by earnings, growth, developments, the economy, etc.  As an economy strengthens, so does its market.  This means that there is a bias towards the upside in the stock market - people believe that times may be better in the future and thus they invest in stocks (excluding dividends) for the long run.

The currency markets possess no upward bias.  The exchange rate of a currency fundamentally should be based on the relative demand for one currency and the willingness of the holders of another currency to sell their base currency for an alternative.

It makes very little sense to hold this for your retirement.  This shows that you believe it will appreciate over time against the dollar.  Fundamentally, this makes very little sense.  Who cares if there are 21 million bitcoin?  I can find stocks with 21 million or less shares - is that a justifiable reason for me to put it in my retirement?

$10 - where do you get this number?  What do you base this on?  Do you have some model which has worked in the past that validates your assumption?  See where I'm going here?  You need to question your decisions and find out why you actually made them in the first place.

[StewartJ]

Only 21 million ever.  I'm investing for retirement with a 30+ year timeframe.  I doubt I'm the only one with such an attitude.  At that scale, BTC will either be worth 0 or at least 10.

You just revealed something about yourself - a tendency towards an upward bias.  The currency markets are unlike the stock markets in that there is no "upward" bias.  Stocks are driven by earnings, growth, developments, the economy, etc.  As an economy strengthens, so does its market.  This means that there is a bias towards the upside in the stock market - people believe that times may be better in the future and thus they invest in stocks (excluding dividends) for the long run.

The currency markets possess no upward bias.  The exchange rate of a currency fundamentally should be based on the relative demand for one currency and the willingness of the holders of another currency to sell their base currency for an alternative.

It makes very little sense to hold this for your retirement.  This shows that you believe it will appreciate over time against the dollar.  Fundamentally, this makes very little sense.  Who cares if there are 21 million bitcoin?  I can find stocks with 21 million or less shares - is that a justifiable reason for me to put it in my retirement?

$10 - where do you get this number?  What do you base this on?  Do you have some model which has worked in the past that validates your assumption?  See where I'm going here?  You need to question your decisions and find out why you actually made them in the first place.

Very insightful GoomBoo.  Thanks for sharing.

[notme]

I can't buy a beer with that share of stock.  Bitcoin is not comparable and much more useful.  So long as I see governments clamping down on fiat transactions, I will hold bitcoin long.

[notme]

Anyway, I guess I'm saying you have to consider investors as well as traders when considering manipulation of your strategy.  In the long run, trading will win out, but until bitcoin grows quite a bit the investors will eat into your profits.

[Dutch Merganser]

Only 21 million ever.  I'm investing for retirement with a 30+ year timeframe.  I doubt I'm the only one with such an attitude.  At that scale, BTC will either be worth 0 or at least 10.

Trust me, you have no idea what you may do with regard to accumulating wealth over a time frame like that. I seem to have missed the rise of a generation of one eyed mutants herding us all into stinking cattle pens so far, so that may be a consideration that you will want to incorporate in your careful planning 

The one thing I will say is that no strategy or approach lasts, I tend to follow The Church Of Whatever Works Right Now. For example what worked for me superbly in 2008 is a non-starter today.