S3052 and Manipulation Techniques

[P4man]

Insider trading for stocks is a crime. Do you think it ought no to be?

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[Jon]

Insider trading for stocks is a crime. Do you think it ought no to be?

It's a crime for ordinary men. Insider Trading laws only exist to allow powerful men to have a monopoly on insider information such as politicians and higher businessmen.

As far as I can see, it's only a crime if you can't get away with it.

In the future of crypto-currency and decentralized security exchanges, insider trading will be the norm, the standard. Nothing will be able to stop it.

It's a part of nature. Some people will always have access to information that others don't. Some kids are read to and recieve a grand education, others recieve less formal education and choose to specialize in other things. One is not neccessarily worse off but just has to take a different path. I see nothing bad about that.

[N12]

Insider trading for stocks is a crime. Do you think it ought no to be?

This is Atlas, 17-year old who has an obsession over Ayn Rand. What do you expect, you communist?

Atlas, you can go back to the Politics forum now and spare us your gibberish. It was much better without. Please.

[Elwar]

Consider this scenario:

An oil well estimated to yield 10 billion gallons of oil is found off of the coast of Texas.

Oil traders hear about this and immediately start selling their shares of oil with the knowledge that the extra supply will lower the price of oil in the long term.

As they sell, the price of oil drops.

As the price of oil drops, gasoline prices drop.

You benefit by paying less at the pump for gas.

This, from not a drop of oil being extracted.

Would you forbid this type of speculation from happening?

[Jon]

Consider this scenario:

An oil well estimated to yield 10 billion gallons of oil is found off of the coast of Texas.

Oil traders hear about this and immediately start selling their shares of oil with the knowledge that the extra supply will lower the price of oil in the long term.

As they sell, the price of oil drops.

As the price of oil drops, gasoline prices drop.

You benefit by paying less at the pump for gas.

This, from not a drop of oil being extracted.

Would you forbid this type of speculation from happening?

As soon as I would restrict oil owners from trading and using their oil as they please. Do the oil traders own their oil or is it owned by a power higher than themselves? That's the true question.

As for your scenario, I don't see who is harmed involuntarily. Everybody who deals in oil accepts it as a volatile commodity; otherwise they won't be in business for long.

[P4man]

Insider trading for stocks is a crime. Do you think it ought no to be?

Bitcoin is not a stock. Should Gavin be allowed to trade Bitcoins?

Edit: I picked the most "insider" person I could think of. 

If Gavin's actions or knowledge would have a significant impact on bitcoin's future exchange rate, then we have a far bigger problem then him doing insider trading. So yes, its absolutely fine if Gavin trades, he wouldnt or at least shouldnt have any private knowledge that will affect exchange rates.

[Jon]

Insider trading for stocks is a crime. Do you think it ought no to be?

Bitcoin is not a stock. Should Gavin be allowed to trade Bitcoins?

Edit: I picked the most "insider" person I could think of.  

If Gavin's actions or knowledge would have a significant impact on bitcoin's future exchange rate, then we have a far bigger problem then him doing insider trading. So yes, its absolutely fine if Gavin trades, he wouldnt or at least shouldnt have any private knowledge that will affect exchange rates.

If Gavin's actions or knowledge would have a significant impact on Bitcoin, I imagine a network fork would inevitably happen and the original Bitcoin network going the way of SolidCoin.

We need to think in terms of results.

[Jon]

Insider trading for stocks is a crime. Do you think it ought no to be?

Bitcoin is not a stock. Should Gavin be allowed to trade Bitcoins?

Edit: I picked the most "insider" person I could think of.  

If Gavin's actions or knowledge would have a significant impact on bitcoin's future exchange rate, then we have a far bigger problem then him doing insider trading. So yes, its absolutely fine if Gavin trades, he wouldnt or at least shouldnt have any private knowledge that will affect exchange rates.

So, where do you stand on the OP?

He knows what's best for Bitcoin and whoever disagrees is irrational.

[teflone]

Atlas is back!!!!

[P4man]

So, where do you stand on the OP?

I tend to agree, but I see it as inevitable. Bitcoin being what it is, completely unregulated and its value for 99.9% determined by speculation, I cant see how it will ever obtain price stability. I dont like that, but I cant see a solution for it either, so if I were a speculator Id either sign up for his newsletter or start my own if I had enough funds to make sure my initial predictions came true.

[Jon]

So, where do you stand on the OP?

I tend to agree, but I see it as inevitable. Bitcoin being what it is, completely unregulated and its value for 99.9% determined by speculation, I cant see how it will ever obtain price stability. I dont like that, but I cant see a solution for it either, so if I were a speculator Id either sign up for his newsletter or start my own if I had enough funds to make sure my initial predictions came true.

If people truly want price stability, it will come in one way or another without compromising Bitcoin as a whole. I mean, all it takes is the majority of traders sticking to one price while they reflect the will of the people buying it.

Right now it's just not important to enough people. That's not a problem from what I can see.

[P4man]

I see. It will obtain stability if it becomes large enough. The Forex is massive compared the the GDP of the most developed countries, and even with all that speculation the fiat currencies are relatively stable.

Maybe, but its not unregulated, and you will probably hate me for saying this, but it does have central banks that ensure some stability. Moreover the volume on  forex is perhaps much larger than the underlying economies, but that not what matters. Buying and selling the same dollar 1000x per day does not cause price swings. What matters is how much of the currency or commodity is owned by speculators, and in that sense, forex is minor compared to the underlying economies. In oil the % would be bigger, gold I would guess even bigger than that and bitcoin almost a theoretical maximum. See a pattern?

Speculation adds stability. I can only imagine how volatile Bitcoin would be without it.

No it doesnt. Speculation adds liquidity. Some speculation is good, and really needed, but when you get to the point where speculator ownership completely dwarfs the underlying economy, it doesnt do anything like stabilizing.

[Elwar]

Speculation adds stability. I can only imagine how volatile Bitcoin would be without it.

Agreed.

Nobody manipulate Bitcoins! Everyone just trade what you need when you need it for purchases!


Then one day cascius or bit-pay need 100,000 BTC for some project they are working on or an investment into a new technology and the price skyrockets to $1,000/BTC as they have to pay whatever people ask for with such a limited supply at the exchange.

[Jon]

Is stability relevant if it isn't relevant to most people trading the respective commodity?

[P4man]

Is stability relevant if it isn't relevant to most people trading the respective commodity?

Id say it is if most people dont use it for anything other than speculation because of its instability. Nice catch 22.

[Jon]

Is stability relevant if it isn't relevant to most people trading the respective commodity?

Id say it is if most people dont use it for anything other than speculation because of its instability. Nice catch 22.

Then the speculation will inevitably fulfill the desire of stability.

As for the "Tragedy of the Common", that's easily resolved by ownership of the resources involved: http://www.youtube.com/watch?v=MLirNeu-A8I

People aren't going to let their Bitcoins go to nothing if they value the product itself and people do.

[Sock Puppet]

Speculation serves a valuable purpose. Besides, what do you suggest, that we ban exchanging Bitcoin for other currencies?

No.  I agree that speculation serves a valuable purpose.  I'm arguing against manipulation.  Perhaps it is intentional, or perhaps it is simply a flock of fools fulfilling the prophecy of their leader.  It doesn't matter which.

I'm not asking to ban or regulate anything.  Regulations cannot end this behavior.  They only make it more perverse.

I am simply appealing to reason:  Realize that creating coordinated mass movements creates a little profit for a few, but damages the future of BitCoin as a whole.  We have an opportunity to create something much bigger than day to day profits.

Instead of creating artificial waves to exploit, speculate on BitCoin's future.  Buy the rumor, sell the news.  Create your own charts.  Analyze web boards.  I don't care what your strategy is.  Just stop participating in the coordinated attacks.

[stochastic]

First off, I have been a subscriber myself for a considerable time, and it hasn’t always been like this. Second, I do not want to attack S3052, but when I see the bullshit the public and subscribers get served, I just have to call it out.

Why I am no longer subscribed is that S3052’s analysis devolved 1) into a weekly newsletter with updated charts and more importantly, 2) almost pyramid-like zero sum CRASH or RALLY short-term updates.

The subscribers obviously have a disproportionate influence over the market, because they act all at once and the market is already small. Subscribers are also likely to have a bunch of BTC due to the cost of 5 BTC/month.

Now, what happens when he issues a short-term CRASH alert is that people race to sell WITHOUT REVIEWING THE ANALYSIS because they want to be first. So when his E-Mail hits, all subscribers try to sell before each other, creating what we have seen.

So, what is the problem?

The problem, or the - almost a kind of scam – is that a) subscribers only sell to buy back immediately at lower levels, so the last one loses out and b) the public gets spammed with suggestive manipulation AFTER the subscribers have sold.

I have already seen this multiple times as a subscriber myself, and it is despicable.

Solution: Either make your analysis completely public or completely private. If you share analysis to influence the public for your subscribers’ gains and make money off it, I see a huge moral issue.

In my personal opinion, if a person is paying for advise from someone on speculation then they are being manipulated, not the market.  If that person's advise was so good then they would be using their time to make money and not creating a newsletter and selling it.  It is not their trading advise that is valuable.  It is their salesmanship of their newsletter that is valuable.

People can waste their money anywhere they want.

[P4man]

I think it does. When someone dumps Bitcoins the people buying prevent the dump from moving the price as much as it would have. That clearly adds stability.

When 99.9% of the value (/ownership) is speculators, people dump bitcoin because other speculators dump it and buy bitcoin because others are buying. Or because they expect others to dump/buy.

I understand what you are saying about the disparity in ownership, and how an individual can move the market, but this will change with time. I've listed a few times what I feel are the required steps for a more stable exchange rate and a greater distribution of coins has always been one of them.

I never even mentioned concentration of ownership. Speculators moving like a herd is not that different than concentrated ownership.

A higher exchange rate is another. Remember the disparity in ownership of fiat is great as well, and one individual could move the price quite a lot simply by purchasing a large number of coins. They could do this with what they consider pocket change.

True, but were is the incentive to move the price only for moving it?  And a higher exchange rate, aka as a new bubble -unless something more fundamental changes first- will also attract more speculators. Bitcoin could grown 10.000x and it would still represent next to nothing in the world economy.

Anyway, this has been debated to death now I think. And AFACIT, the facts speak for themselves.
Lets see if it changes over the next years, but Im not holding my breath.

[notme]

Here's how my father dealt with this.  It worked quite well for him (unlike most of his other strategies).

1. Subscribe
2. Wait for market reaction, ensure there was an overreaction(there usually is)
3. Do the opposite
4. Profit

Once enough people do this, or start to put limit orders to catch the peak/trough, the negative effects will die out.  Profit will die out too unless the analysis is sound.