Wanted to share and get feedback on a trading app a friend and I are building

[animalrobot]

Hi All,

Wanted to share and get feedback on an app that a friend and I have been building.  I mostly hang out in /r/bitcoin, so hope it's okay to share here (without being a long-time member of the community)!

The app is called Coinsight (Coinsight.co) and it uses exchange bid/ask data to help visualize sentiment in real-time.  It's something that I started building years ago for the traditional financial markets, and when Bitcoin came along, I thought it would be cool to re-purpose it.  It's a little challenging to wrap your head around at first, but once you get it, it's very useful for short-term trading.  There are a few patterns that I've been able to trade consistently using this method of reading the markets.

Here's a short blog post and video that explain how the chart works:  http://blog.coinsight.co/introducing-the-coinsight-chart/

Anyway, would love to have feedback from the community here.  If you have any ideas for features, or how to make this more useful, we'd love to hear from you.  I'm also happy to answer any questions you might have about reading the graphic or how to trade with it.

All the best,

Ben

[jeffhuys]

Whoa, this looks very good. 

I am too much of a chicken to do market trading, though, but I love me a good webapp.

Do you run a node.js webserver? (I saw socket.io mentions in your source  )

[animalrobot]

Hey,

Thanks for the note!  Yes, it's node, socket.io and reactjs!  I built a proof of concept a long time ago with Rails / JQuery, but there is so much data to keep track of, everything turned into spaghetti very quickly.  This is a much more robust system for streaming real-time data.  It will be interesting to see how far we can push it.

[bounst]

I think you should add lakebtc, another major usd/btc exchange http://bitcoincharts.com/markets/lakeUSD.html

[SebastianJu]

So coinsight shows the trendline in a different way because it shows the volumes traded on certain pricelevels. Divided by color to show bid/ask and the lighter the color the higher the volume. Is that right so far?

Im not sure how to use it though. Can the future price be predicted? If so how?

And i wonder how valid the results are. Because markets work with maker and taker fees. Traders with big money are the ones who mostly move the market and they dont want to pay the taker fee. Because its higher than the maker fee and because they would get less for their coins when selling into bid side. So they would put their coins on the ask side and the result would be different isnt it? I dont think experienced traders will panic often.

So can you explain if and how its possible to predict how the price will move?

[animalrobot]

So coinsight shows the trendline in a different way because it shows the volumes traded on certain pricelevels. Divided by color to show bid/ask and the lighter the color the higher the volume. Is that right so far?

Yes, that's pretty close.  The squares and the period totals show net volume, so BTC volume traded at the 'ask' counts as +volume and the volume traded at the bid counts as -volume.

Im not sure how to use it though. Can the future price be predicted? If so how?

There are a number ways you can use this kind of chart to trade...

It's very effective at highlighting 'breakouts' (when the price breaks out of a trading range), and specifically helping to detect genuine breakouts vs. false breakouts.  When real breakouts occur, they are usually confirmed by big volume trading at the ask price.

You can also trade 'volume delta divergences', where if the price is trending upwards across periods, but the ask volume is trending downwards across the same periods, the move is weakening and it's time to get out (or short).  You can do this in reverse when the price is falling.

And i wonder how valid the results are. Because markets work with maker and taker fees. Traders with big money are the ones who mostly move the market and they dont want to pay the taker fee. Because its higher than the maker fee and because they would get less for their coins when selling into bid side. So they would put their coins on the ask side and the result would be different isnt it? I dont think experienced traders will panic often.

Rebates are negligible compared to moves in the price.  When the price is really moving, traders are going to be motivated by getting into the market as quickly as possible, and so they're going to cross the bid ask spread.  If you try to buy during a big bull move, it's very frustrating to sit on the bid price, because you will consistently be outbid.  Emotional traders will always buy at the ask / sell at the bid, which is what gives the data meaning.

So can you explain if and how its possible to predict how the price will move?

It's not possible to 'predict' how the price will move, but it is possible to make a high probability bet that the price will continue to break-out, or reverse direction.  You just have to be right more often than you're wrong, or even better, be right as often as you're wrong, but make more money when you're right

[SebastianJu]

Thank you. I will see if i can figure things out and bring it to use.

[SebastianJu]

I wonder if it wouldnt make sense to be able to disable certain exchanges or set up an offset for them. Because some are very different than others in the current price. Mostly because of problems with withdrawing fiat or things like that. So i think it would make sense to either put them on the same level or disable the ones that are far away. Otherwise it might change the results in a way that its hard to read the output or maybe even misinterpret?

I mean coinsight represents the price development in some form too. And since everything is summarized this might lead to a wrong impression.

Edit 2: Another thing. I think the hourly summarization makes coinsight less valuable for short swing. For example its not really useful for margin trading since very small changes matter. I think a summarization of 1 Minute would make more sense for that use case. In one hour there are way too many panic cycles up and down so that its not really possible to say where the price will go in the next minutes. I think so at least.

[SebastianJu]

Great to see you added some of my suggestions.   Looks like you still work on it to improve it.

Some feedback though. Something is broken with the site. Im not sure when it is triggered but it looks like when one timeframe is over then an error is in the code. For example i chose 1 minute timeframes. It shows the graph, updating and so on, but when the next minute comes the graph vanishes and the loading graph is showing all the time. So something is broken there.

You added a chat feature... if you enable it so that people can start chats then you most probably will have more betatesters giving you feedback or error reports.

I like what you do.

[SebastianJu]

You might think about adding btcchina and okcoin because those are pretty big market who move the worldwide bitcoin price way more then the other exchanges. Though im not sure about coinbase's volume. They arent listed on bitcoincharts.

And it would be good if you would give the possibility to merge trades in the trades list. For example merge trades to 0.1BTC trades in order to have a smaller trade list. If thats too hard then cutting would be a feature. So that you can set it up that only trades >= 0.1BTC are shown. This could help to weed out the noise.

Ideally editable for each exchange. Because for example btcchina has many many trades. These trades could overwhelm all other trades. So it would be good to merge those trades to a higher BTC bundle and then show them. Then you could watch all the markets together in the trade list.

You already have a $-Feature though i think thats for the graph. How big the blocks are right? I cant test it properly because the graph drawing has problems.

Edit: By the way, can it be that coinbase make the results wrong? I mean coinbase is a normal exchange as far as i know. But its mostly a payment service. So when these payments happen, what happens on coinbase? I mean you can buy goods and automatically coins are bought on coinbase right. So is that the reason that practically only buys are shown for coinbase? People buying some stuff and coins are bought on coinbase automatically. But those people dont care about the bitcoinprice. Though coinsight should show the traders and how they react to the bitcoin price. Im only unsure if coinbase delivers the data that is needed for this project. But maybe im wrong about how coinbase is working.

Edit 3: Sometimes there is an error when trying to change the $-value. Its not working to set the value back from $5 to lower values until i reload the website. The same happens sometimes to the minute value.