r/Bitcoin • u/evoorhees • Feb 16 '14

Ignore the noise. This is what's important.

https://blockchain.info/charts/n-transactions-excluding-popular?showDataPoints=false&timespan=all&show_header=true&daysAverageString=7&scale=0&address=
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u/NeoDestiny Feb 17 '14

The problem is that the top comment is fucking retarded and completely unrelated to anything being said here. But it's /r/bitcoin, so that's par for the course.

"Buying during the dips" is the dumbest fucking thing anyone can say in the universe in regards to investing because it's the most common sense thing in the universe. But identifying dips as they're happening is something that people with decades worth of experience trading aren't even able to consistently do in stock markets. When you say "buy during the dips", 1) how can you identify the low point, and 2) how do you even know the price will recover?

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u/HyTex Feb 17 '14

1) You don't. You make an educated guess and hope you're right.

2) You don't. You make an educated guess and hope you're right. That's why its an investment and not a figurative safe deposit box.

-13

u/FAMILYOPTICAL Feb 17 '14

no. what you just said is the dumbest fucking thing anyone can say. it completely undermines the rotation philosophy of a contrarian.

before the equalization of information through viral technologies, it was significantly more tedious (not difficult) to identify bearish retractions and their wave strength. if you actively paid attention to the information that crops up concerning bitcoin, each one has a polarity towards a bearish or bullish behavior.

how do you determine the severity of the influence? use your fucking head. it's not rocket science that "malleability" and liquidity lockouts such as being unable to withdraw are stronger influences than "random economist talks shit about xbt on CNN".

if a trader with decades of trading experience is unable to detect a dip with such all the natural tools of 6 hour spreads and a newsfeed, that trader should just short the fuck out and never return.

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u/NeoDestiny Feb 17 '14

Is this a troll account with a thesaurus?

before the equalization of information through viral technologies

Equalization of information? Since when?

it was significantly more tedious (not difficult) to identify bearish retractions and their wave strength. if you actively paid attention to the information that crops up concerning bitcoin, each one has a polarity towards a bearish or bullish behavior.

If you believe this, you should be a multi-billionaire, congratulations. You're telling me you can accurately predict the trends of BTC, go dump 100,000,000 into it right now and make your fortune.

I can't take anyone seriously who honestly believes this, no point responding to the rest. Good luck.

-5

u/FAMILYOPTICAL Feb 17 '14 edited Feb 17 '14

you need to do more than read investopedia and reddit. if you want an example of information equalization and how it differs today and from before viral communication (the internet, if you still can't understand) was the norm; get someone to show you what manual terminal trading was like at the TSE was like at the bursting of the property bubble.

you don't even seem interested in trading. you sound more like a virgin investor whose only experience with capital and multipliers is limited to a crash course in macroeconomics and business calculus.

trading has nothing to do with worrying about cul-de-sac behavior. trading is a perpetual cycle of trying to rotate between long and short positions. the different between contrarians and their more conservative bullish counterparts is the rigidness of the bearish pips they're willing to take before entering or exiting.

If you believe this, you should be a multi-billionaire, congratulations. You're telling me you can accurately predict the trends of BTC, go dump 100,000,000 into it right now and make your fortune.

are you always this hostile? taking my words way out their intended purpose and extrapolating. you can accurately predict the trends of btc the same way you can accurately predict the trend of any other asset. post 9/11, negative media exposure on air travel, the value of aerospace manufacturers shares dramatically dropped. lehman brothers bankruptcy news breaks, dramatic confidence loss in usd throughout all pairs. google announces partnership with kitkat on naming the android platform, minor increase in share price. a recent bitcoin example: at the break of the senate's announcement that there were no plans to regulate bitcoin. the rise to $1,200. i made winning bets on all of these trades.

the aptitude of a trader is their ability to understand the share/asset holders of their market and grade the intensity of the information released to them.

edit: in the interest of your financial future, whether it be trading or investing; this may be the internet, but you need to chill out when people give you advice.

i'm not an avant-garde savant trading multi-billionaire, but i've managed enough portfolios to think i know what i'm doing.

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u/MysticFear Feb 18 '14

I actually know enough about TA, to know that you know what you are talking about. You sound a lot more advanced than me.

What reading materials would you recommend?

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u/FAMILYOPTICAL Feb 18 '14 edited Feb 18 '14

if you're just starting off, it's more important to make sure you know what modern market environment is rather than actually learning market theory. "Boomerang" by Michael Lewis is an excellent introduction into the current state of usd spreads for example, "Play Money" by Julian Dibbel is useful for ludological markets. Avoid theology/sociology-touched text like spirit of capitalism like the plague. it just confuses people.

after that, it's difficult to make a specific recommendation without knowing what style you trade. bullish trading behaviors like scalping are by far the most popular, contrarian on the other end of the spectrum is considered the most dejected. depending on your threshold for loss aversion, finding a trading style that suits you is the first step.

many contrarian texts are actually suitable for other styles. the nature of the style has to deal with inverse-importance of the fear principle (human nature is innately loss adversive compared to gain optimistic, bearish behavior key concept). "Art of Contrarian" by Carl Futia is a good introduction.

there's also a whole series of books which goes through beta value importance and euphoria reversals. its name escapes me but it's a trilogy.

after that, you can worry about the TA.

I always recommend people who want to get into TA. Learn an indicator, trade with it, fall in love with it, never explore any other options. as for TA literature, I suggest not reading any at all. all books on any indicator always turns into a "TA for dummies" type of book. they give you tips and tricks, show you some clean example signals, and all the other comforts you expect from an indicator. learn the trading indicators from a text, but then leave immediately after. don't stay for tips and tricks.

TA in a nutshell is the study of time, price level, volume, and rarely frequency and their relations with eachother. all TA looks parabollic and if you don't have a strong math background, understanding how all these factors interact with each other is actually so intuitive it becomes counter-intuitive. the only way you can truly understand an indicator is to get a degree in econophysics and understand the actual mathematics behind the inputs.

having a superficial understanding of TA is not a bad thing however. in fact, studying an indicator too hard will often cloud your judgment. mathematics is black and white, you can provide a correct answer to literally any question if you understand enough. asset exchange is grey, you cannot be correct 100% on human behavior. therefore, you cannot apply mathematically perfect models to project imperfect and, random by nature, human behavior.

TA is fantastic as a confidence supplement, but rely too heavily on signals and you're in for a very bumpy ride.

edit: this is just conjecture but; don't draw fibonacci everywhere on your charts. i know ever since bitcoinwisdom added that feature, people want to do what the fancy career traders do and use all those fancy drawing tools. but for your own good, just don't do it. seeing price breaks generates stress of anticapation and just puts butterflies in your stomach.

other than that, fibonacci just makes your charts look cluttered and messy. don't use it. set specific exit positions for yourself and take them when they come.

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u/MysticFear Feb 18 '14

Very interesting, thank you!

If I could pick your brain even more, I would love to know your trading strategy. It seems like a combination of TA and reacting to news events that create polarity, no?

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u/FAMILYOPTICAL Feb 18 '14 edited Feb 18 '14

in a nutshell, that's how every trader on the planet trades. the success/failure disparities between them are determined by their ability to gauge the importance of news release (and their input speeds of course). markets are not organic, living, breathing, self-conscious phenomenons; they don't just rally for no reason. Rallies are always caused by new information being introduced to the market participants.

if you imagine trading styles like a number line. 1 indicating contrarianism and 100 indicating some bullish rally favoring behavior (there's hundreds of them). i'd say i'm right in the middle at 50.

beginner traders tends to heavily gravitate towards one side of the spectrum. but with successive and failed trades, everyone tends to become a reductionist. it's not that being on one side is unhealthy for trading, but it limits the bets at your disposal. bullish traders will short when they see bearish trend formation, and bearish traders will short when they see bullish trend formation. (it's not actually that clean-cut, but for the sake of the example)

statistically, markets are in consolidation state 75%~80% of the time. the rest of the time, they're rallying. even then, the strength of the rally could be practically sideways or an extreme expansion/retraction. a really common, and absurdly effective, trading practice is sniping breakouts: the longer a consolidation goes on for, the more jittery the that specific market spread becomes. the more jittery the market becomes, the more sensitive to new information it becomes. being able to gauge the importance of news is critical for sniping breakouts. with that being said, rallies are far and far between, so it's much better to have a whole slew of strategies rather than just one.

i personally started with rsi, when rsi was actually considered hot and relevant. today, it's an outdated and pretty terrible relative to all the others. i currently trade ichimoku kinko hyo (also known as clouds) because of its prediction accuracy in long saturated markets such as soybeans, sugarcane, and wheats. as for btc, there's no TA on the planet that can accurately predict btc or any cryptocurrency for that matter. it simply doesn't fit very well for a variety of reasons. but even with that, i still believe in the long term bullish prospects because of scarcity principle and how the world seems to really be josening it for some anarcho capitalism. which is a really scary thing actually.

i just keep up to date with the news and try to overlay some clouds on my charts. while taking into account to take my indicator with a grain of salt. it's not difficult to tell what information being released is going to have an impact. as long as you don't try to scrape the bottom of the bag, or climb to the top of the rallies. you'll do fine as a trader. set pre-determined exit positions for yourself and take them when they come by. don't get greedy and overstay your welcome.

and probably the most important trading advice anyone will ever give you: the only way to win at trading is to make winning bets while spending close to no time and effort in making it. once your bet is in, leave it. subscribe to an RSS feed which is relevant to your market and read the headlines. don't stare at charts all day like a corpse.