Wouldn't it be nice... (the LazyWhale algorithm)

[oda.krell]

Nope, I meant lambchop's post. Check his first line, the 'at' symbol he wrote before my username is parsed as a mail link in some browsers I guess.

Wait, I mean: he haxored my Win95 machine and put a virus in my porn folder 

[Wilhelm]

Netscape navigator bugs :')

[sgbett]

Q: So you're claiming every single trade based on signals from your method was profitable?

A: Nope. There were two unprofitable signals, as can be seen in the table above: in 2011, a sell signal came in at 10.75, only to be shortly followed by a buy signal at 11.77, and at the end of 2011 (correction) 2012 sell signal at 10.75 was followed by buy signal at 11.77.

Was there only 1 unprofitable signal?

srsly?

[oda.krell]

Q: So you're claiming every single trade based on signals from your method was profitable?

A: Nope. There were two unprofitable signals, as can be seen in the table above: in 2011, a sell signal came in at 10.75, only to be shortly followed by a buy signal at 11.77, and at the end of 2011 (correction) 2012 sell signal at 10.75 was followed by buy signal at 11.77.

Was there only 1 unprofitable signal?

The exact targets in the OP aren't up to date anymore, those were for the first version of the algorithm. In the backtest of the version I've been using for a while now, there was one trade incurring a real loss (-17% BTC), and another one that was pretty much exactly profit neutral, but under the original assumption ("few trades because of larger position"), that would mean a small loss after probable slippage. Plus the recent 'live' loss (-16% USD), for a grand total of -16% in live profits

[Alonzo Ewing]

It's fine to get a signal that results in a bad trade.  No system is perfect. 

What you want is:

1) More signals that result in good trades than bad ones.
2) The bad signals leading to small losses, and the good signals leading to big gains, relatively.

If you satisfy those two criteria, you'll make a lot of money and probably sleep easy at night doing so.

[sgbett]

There are no bad signals, just bad interpretations

[fewcoins]

There are no bad signals, just bad interpretations

Well said... Who knows if we will see $300 coins again 

[sgbett]

In a hypothetical run up to $10k, people often cite "It doesn't matter if you bought at 300 or 400" and to some degree they are right.

If you bought $1200 of BTC, you end up with $40k or $30k.

Now some people (greed) will lament the $10k they "lost" not catching the bottom, instead of the $28,800 profit they actually made. Anyone lamenting a 24 bagger needs to have a word with themselves, imho. Prior lamentation of this (greed) will cause them to keep waiting, well past the bottom, because they are convinced its going much lower. The longer and higher the run up goes without them relenting the steeper the price they eventually have to pay to get in. Lets say they are shrewd enough to realise that once we hit $900, we probably are on track to bust through the last ATH and do another run up.

So they manage to get in with their $800 for 1.5 BTC They still end up with $15k

All of this is what people think, regularly. What it doesn't take into account, is that once you caught the bottom. To get those theoretical gains, you ave to also time the top. Which is subject to the same forces of fear and greed.

Now if you alone are the "one" that can pick the bottom at $300 and the top at $10k, then you can turn your $1200 into $40k. Never look back and live a happy life.

If you are a typical guy that is too late at the bottom, and have to panic buy on the way up at $800. Then you are too greedy at the top, ride the crash and end up panic selling at 60% discount. You can enjoy turning your $1200 int $9k. A 7 bagger is pretty cool, but those "losses" not having bought at the real bottom and the real top are going to wrankle you. All you'll think about when you are spending your $7800 profit, is those other guys that got lucky and how its so unfair that you never make it out like those other guys.

Thats because you are thinking about dollars whilst looking at the future of money.

I say again don't bet the farm, but please don't be 'trading' like you think you are some kind of Gordon Gecko. You are just a guy(girl) OTI that is lucky enough to have discovered a massive opportunity.

You can try and use it to make a quick buck. Or you can think about how the future might pan out, and what you need to do to make sure that in any of the various scenarios you don't end up being the person the laments how the other guys "got lucky".

I'm an "other guy" and its insulting when people tell me that I got lucky. Holding through massive crashes and not panic selling, continuing to accumulate during downtrends & buying when fear is all around. Carefully skimming during run ups and not panic dumping way before the correction comes in. Managing principle, hedging risk. (Running a business and family finances whilst doing all of it). Fighting strong emotions, making smart decisions for three years now, is somehow lucky? I'm not a trader, or an investor, or anything. I'm just thinking really hard about how I live my life and the decisions I make and how best I don't shoot myself in the face doing something stupid. I was lucky I found bitcoin early, but since then its been all me.

[Ibian]

Hell, the argument that we got "lucky" to find bitcoin earlier than most doesn't even hold up. We didn't hear about it from a tv commercial or a poster somewhere. In my case, it was because I was busy reading about a bunch of other stuff (that happens to be related to bitcoin in various ways). I bet the same is true for many. Simply put, the reason most people don't know about bitcoin and the profits to be made is because they are not interested enough in new knowledge.

[sgbett]

Yeah I agree with that too. In fact I feel I was foolish (I could blame bad luck, but luck is what you make it!) for not taking more decisive action when I first heard about it (nearly set up a CPU miner when you could still CPU mine! but I got distracted and did not come back 'til it was ~$1)

[oda.krell]

It's fine to get a signal that results in a bad trade.  No system is perfect.  

What you want is:

1) More signals that result in good trades than bad ones.
2) The bad signals leading to small losses, and the good signals leading to big gains, relatively.

If you satisfy those two criteria, you'll make a lot of money and probably sleep easy at night doing so.

Point #2 is exactly what I was missing until recently. It dawned on me now that there are two ways to go against losses in principle, not entering the losing trade at all (which is what I "forced" until now), or being more permissive on both entries and exits, but aiming to minimize the losses in the bad cases. So far, my solution to the "Don't sell too early during a bubble" problem was restricting sells by a  longer term filter on the mid term momentum signal, but this wasn't a good idea I realize now. Better to allow a somewhat larger number of trades in total, some of which are highly profitable, and some of which are slightly unprofitable, than to go out of your way to prevent the unprofitable trades.

[oda.krell]

In a hypothetical run up to $10k, people often cite "It doesn't matter if you bought at 300 or 400" and to some degree they are right.

If you bought $1200 of BTC, you end up with $40k or $30k.

Now some people (greed) will lament the $10k they "lost" not catching the bottom, instead of the $28,800 profit they actually made. Anyone lamenting a 24 bagger needs to have a word with themselves, imho. Prior lamentation of this (greed) will cause them to keep waiting, well past the bottom, because they are convinced its going much lower. The longer and higher the run up goes without them relenting the steeper the price they eventually have to pay to get in. Lets say they are shrewd enough to realise that once we hit $900, we probably are on track to bust through the last ATH and do another run up.

So they manage to get in with their $800 for 1.5 BTC They still end up with $15k

All of this is what people think, regularly. What it doesn't take into account, is that once you caught the bottom. To get those theoretical gains, you ave to also time the top. Which is subject to the same forces of fear and greed.

Now if you alone are the "one" that can pick the bottom at $300 and the top at $10k, then you can turn your $1200 into $40k. Never look back and live a happy life.

If you are a typical guy that is too late at the bottom, and have to panic buy on the way up at $800. Then you are too greedy at the top, ride the crash and end up panic selling at 60% discount. You can enjoy turning your $1200 int $9k. A 7 bagger is pretty cool, but those "losses" not having bought at the real bottom and the real top are going to wrankle you. All you'll think about when you are spending your $7800 profit, is those other guys that got lucky and how its so unfair that you never make it out like those other guys.

Thats because you are thinking about dollars whilst looking at the future of money.

I say again don't bet the farm, but please don't be 'trading' like you think you are some kind of Gordon Gecko. You are just a guy(girl) OTI that is lucky enough to have discovered a massive opportunity.

You can try and use it to make a quick buck. Or you can think about how the future might pan out, and what you need to do to make sure that in any of the various scenarios you don't end up being the person the laments how the other guys "got lucky".

I'm an "other guy" and its insulting when people tell me that I got lucky. Holding through massive crashes and not panic selling, continuing to accumulate during downtrends & buying when fear is all around. Carefully skimming during run ups and not panic dumping way before the correction comes in. Managing principle, hedging risk. (Running a business and family finances whilst doing all of it). Fighting strong emotions, making smart decisions for three years now, is somehow lucky? I'm not a trader, or an investor, or anything. I'm just thinking really hard about how I live my life and the decisions I make and how best I don't shoot myself in the face doing something stupid. I was lucky I found bitcoin early, but since then its been all me.

Wise words, as usual.

That said, this is the speculation subforum, and this thread is about my attempt to do something more or less impossible (a solid trading algorithm with as little trade signals as possible) so GTFO you hippie

[snowdropfore]

Yeah I agree with that too. In fact I feel I was foolish (I could blame bad luck, but luck is what you make it!) for not taking more decisive action when I first heard about it (nearly set up a CPU miner when you could still CPU mine! but I got distracted and did not come back 'til it was ~$1)

you are so lucky that the bitcoin is 1 dollar ,when i knew about bitcoin ,it was 90 dollars.

[windpath]

Fighting strong emotions, making smart decisions for three years now, is somehow lucky? I'm not a trader, or an investor, or anything. I'm just thinking really hard about how I live my life and the decisions I make and how best I don't shoot myself in the face doing something stupid. I was lucky I found bitcoin early, but since then its been all me.

Well said.

[sgbett]

In a hypothetical run up to $10k, people often cite "It doesn't matter if you bought at 300 or 400" and to some degree they are right.

If you bought $1200 of BTC, you end up with $40k or $30k.

Now some people (greed) will lament the $10k they "lost" not catching the bottom, instead of the $28,800 profit they actually made. Anyone lamenting a 24 bagger needs to have a word with themselves, imho. Prior lamentation of this (greed) will cause them to keep waiting, well past the bottom, because they are convinced its going much lower. The longer and higher the run up goes without them relenting the steeper the price they eventually have to pay to get in. Lets say they are shrewd enough to realise that once we hit $900, we probably are on track to bust through the last ATH and do another run up.

So they manage to get in with their $800 for 1.5 BTC They still end up with $15k

All of this is what people think, regularly. What it doesn't take into account, is that once you caught the bottom. To get those theoretical gains, you ave to also time the top. Which is subject to the same forces of fear and greed.

Now if you alone are the "one" that can pick the bottom at $300 and the top at $10k, then you can turn your $1200 into $40k. Never look back and live a happy life.

If you are a typical guy that is too late at the bottom, and have to panic buy on the way up at $800. Then you are too greedy at the top, ride the crash and end up panic selling at 60% discount. You can enjoy turning your $1200 int $9k. A 7 bagger is pretty cool, but those "losses" not having bought at the real bottom and the real top are going to wrankle you. All you'll think about when you are spending your $7800 profit, is those other guys that got lucky and how its so unfair that you never make it out like those other guys.

Thats because you are thinking about dollars whilst looking at the future of money.

I say again don't bet the farm, but please don't be 'trading' like you think you are some kind of Gordon Gecko. You are just a guy(girl) OTI that is lucky enough to have discovered a massive opportunity.

You can try and use it to make a quick buck. Or you can think about how the future might pan out, and what you need to do to make sure that in any of the various scenarios you don't end up being the person the laments how the other guys "got lucky".

I'm an "other guy" and its insulting when people tell me that I got lucky. Holding through massive crashes and not panic selling, continuing to accumulate during downtrends & buying when fear is all around. Carefully skimming during run ups and not panic dumping way before the correction comes in. Managing principle, hedging risk. (Running a business and family finances whilst doing all of it). Fighting strong emotions, making smart decisions for three years now, is somehow lucky? I'm not a trader, or an investor, or anything. I'm just thinking really hard about how I live my life and the decisions I make and how best I don't shoot myself in the face doing something stupid. I was lucky I found bitcoin early, but since then its been all me.

Wise words, as usual.

That said, this is the speculation subforum, and this thread is about my attempt to do something more or less impossible (a solid trading algorithm with as little trade signals as possible) so GTFO you hippie

I don't see it as being particularly unsuccessful. It seemed serendipitous that your signal came green right around the time i felt things were getting bloody, so I just went ahead and bought. My nose for blood is a bit like a shark though, in that its usually overly keen so its not surprising that i ended up being a bit early. I'll hold on for now, despite the looming threat of a shocking retest of the $266 ATH. Which interestingly is so "unexpected" that almost everyone is expecting it and hence I think it will not happen. (absolutely identical to the sentiment when we were at $2 and everyone on the board was waiting to pick up sub $2 coins - me included).

This most recent purchase will just be added to the long list of buys that I've made too early and at too high a price during this prolonged bear market. (A list that is starting to very much resemble the one during the collapse from $32 where I bought back in early and high several times all the way down to $5).

I'm watching to see when your signal flips again. If we do something truly unexpected (say a total collapse back into double digits for final capitulation, solid end to to the big wave count, and textbook reversal spike down) it would be interesting to see if your signal manages to flip back in time to get a better entry point than $311.

It will also be interesting to see how quickly your sell signal comes in the hypothetical $10k situation, and how much better (if any) your indicator does than my "typical guy" seeing 7500% profits panic buying/selling during a 30,000% bubble.

I think you are still well positioned to get a better entry/exit than that guy, and even with this small loss recently will probably end up doing better.

I'm not trading my way to riches, so it will likely outperform me I'm just holding forever*, accumulating more BTC when I have $$ that I can afford to lose and hedging against BTC collapse by raking back a bit of $$ when things go crazy.

Taleb knows what I'm doing though

*morpheus meme disclaimer

[oda.krell]

I don't see it as being particularly unsuccessful. It seemed serendipitous that your signal came green right around the time i felt things were getting bloody, so I just went ahead and bought. My nose for blood is a bit like a shark though, in that its usually overly keen Smiley so its not surprising that i ended up being a bit early. I'll hold on for now, despite the looming threat of a shocking retest of the $266 ATH. Which interestingly is so "unexpected" that almost everyone is expecting it and hence I think it will not happen. (absolutely identical to the sentiment when we were at $2 and everyone on the board was waiting to pick up sub $2 coins - me included).

This is one of the observations I made during the last year that is still puzzling me. Many of the "old hands" (let's say, registration 2012 and before) seem to have a very keen nose for the market state in general terms.

I'm not talking about the most general intuition, the 'in retrospect, any price turns out to be a good price per coin on a long enough horizon' idea. I share that one, but it's more of a shared hope we have here, but it hasn't been tested that much yet.

I mean a more specific one: the one where the legendary (previously: hero) members have a pretty good feel for when the market is about to turn, both towards 'hopeless, prepare for a serious correction' but also at the other end, 'don't expect that much panic anymore'. It's not universally shared among that class of members of course (some are almost always too bullish, some almost always too bearish), but a good number of the old members that I follow seem to be able to get a rough reading on what the state of the market is.

No deeper insight I can offer. Just something I believe to have noticed.

[Coinshot]

Yeah I agree with that too. In fact I feel I was foolish (I could blame bad luck, but luck is what you make it!) for not taking more decisive action when I first heard about it (nearly set up a CPU miner when you could still CPU mine! but I got distracted and did not come back 'til it was ~$1)

you are so lucky that the bitcoin is 1 dollar ,when i knew about bitcoin ,it was 90 dollars.

Thats the lesson there, even if you had bought in at 90 you would have had more than 10 times in profit in the last rally, or still 3x if you are holding.

[Wary]

This is one of the observations I made during the last year that is still puzzling me. Many of the "old hands" (let's say, registration 2012 and before) seem to have a very keen nose for the market state in general terms.

I'm not talking about the most general intuition, the 'in retrospect, any price turns out to be a good price per coin on a long enough horizon' idea. I share that one, but it's more of a shared hope we have here, but it hasn't been tested that much yet.

I mean a more specific one: the one where the legendary (previously: hero) members have a pretty good feel for when the market is about to turn, both towards 'hopeless, prepare for a serious correction' but also at the other end, 'don't expect that much panic anymore'. It's not universally shared among that class of members of course (some are almost always too bullish, some almost always too bearish), but a good number of the old members that I follow seem to be able to get a rough reading on what the state of the market is.

No deeper insight I can offer. Just something I believe to have noticed.

Possible explanations:

1. The key is brains. Early accepters are smarter, in general. To invent bitcoin you have to be very very smart, to understand and appreciate you have to be very smart, and so on.
2. The key is knowledge. For the 4 years of trading they've became B.Sc of trading.
3. The key is managing your emotions. For 4 years they got enough emotional experience to be able to control them.
4. The key is natural talent. 4 years of natural selection took ones with it. The rest is broken or just left the forum.

Well. Heaps of versions and no idea which one to chose. Just like with trading. There always a lot of plausible theories about why the price must go up and lot - about why it must go down. And I always choose wrong one  

[sgbett]

This is one of the observations I made during the last year that is still puzzling me. Many of the "old hands" (let's say, registration 2012 and before) seem to have a very keen nose for the market state in general terms.

I'm not talking about the most general intuition, the 'in retrospect, any price turns out to be a good price per coin on a long enough horizon' idea. I share that one, but it's more of a shared hope we have here, but it hasn't been tested that much yet.

I mean a more specific one: the one where the legendary (previously: hero) members have a pretty good feel for when the market is about to turn, both towards 'hopeless, prepare for a serious correction' but also at the other end, 'don't expect that much panic anymore'. It's not universally shared among that class of members of course (some are almost always too bullish, some almost always too bearish), but a good number of the old members that I follow seem to be able to get a rough reading on what the state of the market is.

No deeper insight I can offer. Just something I believe to have noticed.

Possible explanations:

1. The key is brains. Early accepters are smarter, in general. To invent bitcoin you have to be very very smart, to understand and appreciate you have to be very smart, and so on.
2. The key is knowledge. For the 4 years of trading they've became B.Sc of trading.
3. The key is managing your emotions. For 4 years they got enough emotional experience to be able to control them.
4. The key is natural talent. 4 years of natural selection took ones with it. The rest is broken or just left the forum.

Well. Heaps of versions and no idea which one to chose. Just like with trading. There always a lot of plausible theories about why the price must go up and lot - about why it must go down. And I always choose wrong one  

I'd take a little from column 3, with a prior 10 years of learning the hard way about trading on other markets.

[oda.krell]

Possible suggestion #5

Our brain is the original neural network. More data for training (usually) means better results of the trained network. Legendary members simply had the most exposure to market behavior over time, hence more training than the rest of us.