10 ms·
Bitcoin Traders Claim There’s Method to Their Madness
- valuearb 9y agoGuessing at what the market will do is super smart when it doubles every month.
- notsofastbuddy 9y agoThe market will eventually stop doubling every month. It's hard to predicted when that will be, a month in advance. Getting the timing wrong can be disastrous. The market will eventually become saturated with efficient traders. For an efficient trader, this is easy to predict because it is accompanied by a slow decline in margins. You just have to be able to stop when you can't beat the market any more.
- TaylorGood 9y agoI’m in a discord chat with about hundred cryptocurrency traders. Reading their insights is great but wow do they put themselves on a crazy ride. I traded for one day only and the mind f$&k is a strong one.
- knes 9y agocan you link to the discord community? I'm always interested to see community behaviours in action
- piggybank 9y agoNot sure if it's allowed here on HN but, this is the one i'm operating: https://discord.gg/CNQf3p https://discord.gg/CNQf3p
- ajr0 9y agoexpired link? (I am not very familiar with discord)
- joeyspn 9y agoThere's also r/bitcoinmarkets slack... one of the oldest around along with whalepool.. https://signup.bitcoinmarkets.co/ https://signup.bitcoinmarkets.co/
- fileply 9y agothis is the one Im in http://traderead.com/chat http://traderead.com/chat
- fullshark 9y agoBitcoin has gone up 1547% in the last year. Unless you are heavily shorting it, you are making money and it's not necessarily because of talent or great strategy.
- QAPereo 9y agoUntil you successfully cash out, you’ve made nothing.
- richardlblair 9y agoPeople don't realize how long it would take to liquidate a large sum of $$.
- Zarath 9y agoNot that hard. Assuming you are storing it in cold storage: 1) Send to GDAX 2) Sell on GDAX 3) Withdraw to Bank
- gst 9y agoUnfortunately GDAX by default only allows to withdraw $10k per day. It's possible to ask for an increased limit, but reviewing those requests currently seems to take multiple weeks for them.
- deleted 9y ago[deleted]
- kinghajj 9y agoFWIW, I applied for a $50k/day limit on GDax recently, and it took effect within a couple days.
- icelancer 9y agoA few seconds on any major exchange, assuming you don't mean in the billions of USD.
- ErikAugust 9y agoA good look into trader psych is Taleb's "Fooled by Randomness". All of this predates Bitcoin, though I'd argue the open nature of cryptocurrency allows for people with "extraordinarily active imaginations" (let's say) to participate.
- ggg9990 9y agoA very effective trading strategy is to predict how others will react when fooled by randomness. Difficult in the stock market, easier in smaller markets like sports betting and crypto currency.
- Zenbit_UX 9y agoThere was a story on the top of HN recently about an Asian student who came to live in the US and joined a hedge fund out of uni. He successfully predicted a huge windfall for his fund - but for entirely the wrong reasons. He put a lot of effort and research into his analysis of the market and was sure he understood it well enough to bet big. He failed but luck saved him and made a killing. His boss told him not to tell anyone, ever, and then promoted him. His boss was also promoted for his 'talent' in managing a successful team. The student was self-aware enough to realize he failed spectacularly and left the fund, but many aren't. Cognitive dissonance is rampant in the financial sector and with bitcoin everyone feels like a stock-broker, it's a dangerous game if you let your ego dictate your strategy.
- ForHackernews 9y agoLink?
- AndrewDucker 9y agohttps://americanaffairsjournal.org/2017/11/western-elite-chinese-perspective/ https://americanaffairsjournal.org/2017/11/western-elite-chi...
- hxta98596 9y ago
- aitrean 9y agoDay trading crypto is a zero sum game. You can profit if you're able to somewhat predict the madness and stupidity of the market just before the market acts that way.
- the_cat_kittles 9y agothis is the simplest, most correct understanding. there are some things that drive the price of bitcoin that are more fundamental, like instability of various currencies, and government regulations on btc. but none of those have changed drastically recently. so what is driving the price? hype, and the price itself. i think you should be pretty skeptical any time you made money and youre not sure why.
- anonemouse145 9y agoI know exactly why I made money. This is a ponzi scheme with unlimited uninformed people joining. You feel your personal level of risk, find a time, and invest only what you can afford to lose. You can do the same with Tupperware if you know enough people to sign up under you, grab a bunch of free product and sign out. During previous dips, it was 100% guaranteed you could get a good return in one week. So that's exactly what any smart person was doing. Some could risk more, power to them. Personally, I'm not touching the market until it gets a lot closer to $1k. And I think the odds are getting better every day.
- solipsism 9y agoI'm curious, how did you come up with $1k?
- Fnoord 9y agoThat's what it was roughly worth before the hyperdeflation started. I put my money on waiting until after Tether [1] fraud gets exposed. [1] https://en.wikipedia.org/wiki/Tether_(cryptocurrency) https://en.wikipedia.org/wiki/Tether_(cryptocurrency)
- blunte 9y agoAs they say, past performance is no indication of future potential. This is especially true the shorter the trader's history. Thus, reading one trader's secret of success may as well be like listening to a slot machine player's 3-week winning strategy story. Meanwhile, identifying recurring inefficiencies and working out the details of how to take advantage of those inefficiencies can produce a more reliable income. Unfortunately, inefficiencies are really a polite euphemism for "other people's money that they didn't realize they were losing". Brokers and exchanges are quick to shut down a successful trader if that trader is costing them money, just as a casino will ban a player who consistently beats the house (for enough money to be noticed). I have my own crypto strategy, and it's about as simple as surfing. Each new wave (no pun intended, if you know what I mean ;) ) may grow and give you something to ride. Not all waves do, and timing when to get on is important. We people on HN probably have a nice advantage over the fascinated (and gambling-minded) masses. This is perhaps what the guy in the article was describing was his basis for success.
- jacquesm 9y ago> I have my own crypto strategy, and it's about as simple as surfing. Each new wave (no pun intended, if you know what I mean ;) ) may grow and give you something to ride. All the way to the scene of the crash.
- blunte 9y agoI guess the reason people keep surfing is that one out of every X waves is big and awesome, and worth the swim back out.
- rebuilder 9y agoSo far, it seems to me that a level-headed crypto bull would have had an advantage over the average crypto trader. Winning strategy, historically, would be to be biased towards holding Bitcoin, but selling when the price rises start to reach maybe 20% /day, and resisting the urge to buy back in when the price is rebounding a few months after a major bubble burst, choosing instead to start buying when the price has gone down to 20% of the previous top. One problem is, it's really hard to follow that strategy since most if the time, it'll look like the market is moving against you. A bigger problem is that the strategy assumes Bitcoin will continue to rise in valuation for at least one more bubble. Which is a huge assumption to make.
- jrochkind1 9y agoSo does nearly every habitual gambler. > “Those are legitimate needs that people have, to figure out if there’s a way to gamble their way to another lifestyle.” I'm not sure who decides what "needs" are "legitimate" -- but can't they just go to casinos, which have been legalized just about everywhere now? Also I can't believe that quote, sounds like a parody.
- analyst74 9y agoThere are amateur gamblers, then there are professional gamblers. The later do have systems in place to make money off the former.
- deleted 9y ago[deleted]
- philipwhiuk 9y agoI mean, the casino is more obviously bias towards an institution.
- hxta98596 9y agoHope. Hope is a two sided coin. Yes gamblers or speculators or whatever they may be called could go to casinos in person. Or gamble via online poker. Or go bet on a horse race. Or on sports via a bookie. Or trade bitcoins from their phone. Just different games for different tastes and currently legal.
- apo 9y ago"If the wind is strong enough, even turkeys can fly."
- IncRnd 9y ago> When he bought his stash, the price of a single litecoin was $67 > He sold his holdings on Dec. 12 when litecoin was worth $387, a 570 percent gain $387 is a 470% gain from $67 not 570%.
- deleted 9y ago[deleted]
- Zenbit_UX 9y agoWhile he may have been exaggerating, I doubt it. These numbers are crazy for stocks but entirely reasonable in the crypto game. His math can be explained but a common misconception when buying coins: Whales move the market. It's impossible to place a six-figure order and get them all for the same price. Simply placing an order that larger disrupts supply and demand enough that multiple sellers are required to cover, sometimes hundreds if your order is filled my small fish. What's most likely is he placed numerous 'smaller' orders over a period of a few days and only gave the price of $67 as the highest he/she paid. Probably loads of coins at much smaller levels and averaged out the returns to 570%.
- hxta98596 9y agoNo. The price never reached a 570% gain so your "most likely" is impossible. The error in the article confusing percentage and multiples is one of a common math errors and the most likely explanation. 382 is 5.7x the price paid or (382/67). That's not 570%. It's 470%. The most likely explanation is the majority of bloomberg reports know almost nothing about finance or math. Unfortunately and sadly it's still some of the best finance journalism available as there's little competition.
- rspeer 9y agoWhen they lose 75% of the money they invested in Bitcoin, they can keep doing the same math and be happy about their "25% gain".
- deleted 9y ago
- 659087 9y agoJudging by various crypto forums, the method is typically to build an echo chamber and keep telling each other they're all going to be billionaires, while burying the opinions of anyone who dares to disagree. Another method is to get lucky in a bull market and pat themselves on the back for being so talented.
- deleted 9y ago[deleted]
- webninja 9y agoOnly when the tide goes out do you discover who's been swimming naked. -Warren Buffett
- ubu7737 9y ago"He got interested in bitcoin in college because he liked the idea of a form of money that couldn’t be manipulated by governments." Of course he did. The idea of making money by manipulating governments takes money to begin with. He thought it through. The real question is, what are we going to do with all these useless people who want to manipulate currency markets for individual gain?
- mancerayder 9y ago"“It’s one of the most inefficient markets I’ve ever seen,” said Arjun Balaji an engineer who trades cryptocurrencies and surveyed the dot-com bubble from his vantage point in kindergarten." That's some vantage point!
- phs318u 9y agoAhhh Bitcoin! I've seen literally dozens of HN articles related to BC lately and over that time the price of BC has fluctuated madly. There's been much discussion over what's driving the mad price rises, and in the last 48 hours the price drops. "What are the fundamentals?" people ask? I'll admit that I had a chance to buy BC at $12. And didn't. (That's twelve. Not twelve hundred, or twelve thousand. Twelve.) That doesn't make me unique on HN by any stretch. But I have kept a watching brief over the years. Here's my gedanken experiment take on all this. Originally, appealing to IT nerds. Demand grew slowly and the community with it. Mysterious founders and mining syndicates made a (theoretical-until-sold) motza by hoarding coin. Articles started appearing on the strange new tech. However, at some point demand crossed over into darknet territory. Demand accelerated. At some point, major crime syndicates started looking at BC as a way to launder significant amounts. Demand really grew as very heavy money entered the market. Let's pause for a moment and consider the possibility that in the last year, the majority of the market (by volume; excluding the founding hoarders) would have been the "criminal" element. What are their key requirements of this "investment"? Opaqueness, security, ability to trade in volume, low or no "laundering losses". With BC, it's pretty much all green lights. So they kept piling on. Then a funny thing happened. The financial services establishment, the same folk that have historically made fortunes by fleecing the great unwashed, saw yet another opportunity to part the rubles from the rubes. And so, abetted by the media's voracious appetite for sensation, talked up this strange, "new", "this time it's different", investment opportunity. Highlighting the overnight millions to be made, with stories of people who bought low and sold high. Gushing about the net worth of the mythical Satoshi. And so the proles started piling on. When your friends and relatives (the ones that call you for IT support), who have never heard about BC before last month, start telling you that they're thinking of buying BC (aided by the handy smartphone apps of the new "pick and shovel makers"), that they're borrowing to by BC, that their friends are buying BC. Then any reasonable person should be hearing "Danger, Will Robinson!". Criminals aren't stupid. The kind of criminal enterprises that need to wash hundreds of millions of dollars a month or a week are not stupid. So what would they make of the increasing volatility? The prospect of not only washing your money, but growing it in the same transaction would be pretty alluring. However, as the sums increase, so does the risk. What if it goes down as hard as it goes up? What's a fiscally prudent criminal to do? Traditionally, if you get 75% of your money back from the laundry, you're doing well. What if the market turns and insane profits become insane losses? When you then add the increased regulatory scrutiny on BC, issues with exchanges, questions about security and transaction rate limits - perhaps that makes BC seem increasingly risker than some of the cryptocoin newcomers? As a launderer, maybe something like Monero might be a safer alternative? Or maybe stripe your money across a bunch of coins types? So you start pulling out. In droves. What happens to a market when some of the biggest players cash out? The rest crash out. Which is not to say that BC won't bounce around, recover, fall again, recover some more etc. But I believe, in the long term, there are better options out there and historically we'll all look back at BC as a successful failure. Having single-handedly created a new market for crypto-coin, shocked the traditional financial players into a new awareness, and yet fizzled into history as better options come online. What do y'all think? Possible?
- kjrose 9y agoFor some people who pump and dump. And others who basically ride the volatility there’s definitely a method to the madness.