Topic: Analysis - page 272. (Read 941596 times)

@masterluc

happy new year to you too

so you dont see another important leg down on the price before it continues its surge?

Happy new year )

What I see? I see zig-zags, price in positive both daily and weekly BB. What could it mean? It could mean true ending diagonal, which never happened before. And also very fucking risky.

uh-oh, is this the ultimate Elliott wave contrarian indicator? 

http://www.broadwayworld.com/bwwgeeks/article/Elliott-Wave-International-Becomes-First-Market-Forecasting-Firm-to-Accept-Bitcoin-20140117

I wonder why they didn't start accepting them back in September 2010 when they ran their first article, and a bitcoin was only worth 6 cents?

This was lovely. Thank you.

hehehe, at the risk of annoying you, and everyone else... you have one more assumption, what I called assumption a) in my post: that it is exactly *one* function generating the entire data. Absolutely non-obvious assumption, that one

I just wanted to say thank you to oda.krell for a splendid explanation of the graphs.

Just a point of note:

There are two (and only two) hypothesizes in this graph:

1. The price follows an exponential rise on this time scale (and onwards).
2. The price follows an double exponential rise on this time scale (and onwards).

The coefficient of determination (R²) clearly shows that hypothesizes 2 is more likely. http://en.wikipedia.org/wiki/Coefficient_of_determination

From end date of this graph and onwards, for every date the price stays closer to the green line than the red line the 2nd hypothesis is strengthened. I plan to revisit this graph at the end of the month to re- evaluate. What seems clear is that we need a substantial and long lasting price fall for the 1st hypothesis to be strengthened.

very nice,I saw it first time now.
So we both are fine with.
Since I am not an english native Speaker you had really challenged me.

I agree

Price has many components.  Several components are best modeled as random variables in some distribution(s).  If your trade frequency --which is limited by friction created by fees -- is high enough, then you can profit from relatively low S/N ratios, over the long run.  This is the basic ideology of successfuly high-frequency trading.  A great motivator for this approach is that risk is quite low for very short term trades.  The result is slow steady gains.  The analytic, technical, and market apparatus required is fairly substantial, however.

The more frequently you can trade with a given constant edge, the greater your gains over time.  Eliciting an edge of a given magnitude for a short term trade is much more difficult than eliciting an edge of that magnitude for a longer term trade.  

On a scale of human life, the reward/risk ratio for BTC is astronomical, and epistemic problems, analytic problems, market frictions, are inconsequential.

A rational maximizer of expected outcome will attempt to scale their time-frames to their epistemic, analytic, and mechanical resources.

Most players will fail to assess their correct scale, due to Dunning-Kruger effect.  They will trade too frequently, and probably suffer from other deep mistakes.

Yes, and no. If your point is to zoom out a bit, look at the big picture, and encourage people to hold instead of panic sell: sure. It makes sense to post a log trendline and point out that price can go higher, can fall down, but in the end it looks like we're in a very long uptrend.

But my 'orange line' example above wasn't purely semantic: it is the ultimate problem of what we're doing here -- using past data, analyzing it, and extrapolating to the future. And that alway carries the risk that it can at some point stop. "The Trend Is Your Friend, Until It Ends" holds for the short term view as much as it does for the ultra long term view.

We probably agree in a more practical sense: price would have to fall much much deeper before I begin questioning the overall uptrend that BTC saw since trading began. It's just that I would never call it a "bull market" if price would deflate all the way to, say, 90 USD. So in that sense, it's a semantical distinction: what you call "bull market" I wouldn't apply to such a long time frame, but calling it an "uptrend" I'm fine with.

That said, *if* we would fall back to 90, there's a good chance IMO we'd break through it. Not saying that BTC is finished in that case, but so much investor's confidence would be destroyed that all previous trends would, probably, be broken.

But tbh, I highly doubt it'll come to that. In fact, I'd be surprised if we ever visit sub-500 for longer than a few hours, maybe a few days, again.

I think we are a bit hair-splitting now about drawing the proper line.
I never drew the orange line and I dont not know wether the professional analysts from the german webside did it.(I doubt it)
If a solid trend  is going about to be broken you have also to take in account the time -scale.
Breaking a solid trendline is not done in a few hours/days, it takes more time.

Let me say a last word about the godmodetrader.de chart:in these nervous days/weeks here on bitcointalk.org I am very confident referring to that Chart since I am longterm-involved.
I can`t stand these hour-/days-charts as posted here so many times.
BTC is too dynamic to get "fenced" in charts like that.

Do you agree ?

No, the current all-time log trendline is unbroken of course. That's the whole point: it is drawn that way.

But I'm asking you to put yourself in the situation of a trader about a year ago. He used the same methods, tried to do the same thing, but he only had the price data up to that point,

The following is a very sloppily drawn trend line. Please don't argue about the exact points of contact etc., it's just there to illustrate my point (and it could be made more precise, if necessary),



RED line is (sloppily drawn!) the trendline you posted, the one from the german website.

Now time travel back to late 2012.

You just drew the ORANGE trend line, also through the lowest candle wicks, just like we are doing now in early 2014.

Maybe you can argue that back then you would have had a slightly less "solid" trend, less points of contact or something, but in the end, it's what you had back then, and what you had to work with.

So anyway, then came (roughly) December 2012/January 2013, and that orange line was broken. So it had to be redrawn.

The irony is of course that, as the previous AT trend line was broken downwards, we were about to enter a hugely profitable rally

When was the lower bound broken ?

you mean from Jauar 2013 a steeper line ?

That would be a "subtrend" within the longterm trend

Edit: Hope we discuss more serious and less pejorative

Which is empirically true. The "all time trend" (up to now) has never fallen below those points. If it ever does, the previously assumed all time trend is considered broken. In fact, that already happened, when the lower bound all time trend had to be updated at the last point (early 2013, I guess).

but you have not realized yet i claimed always the same :
and nothing else

But you ascribed this


to me

added a more serious response in an EDIT

Neither do I take your opinion  on TA too serious.
You did`nt say anyting about what the line says in my point of view.

Dude, two posts above it was pretty obvious you needed help understanding basics like linear regression and double exponentiation. I hope you don't mind if I don't take your opinion on TA all that serious, right?

lookmaicancounttopotatoe.jpg


EDIT: okay, let me be more clear:

re: double exponentiation. there is not "official" explanation, just like there is not "official" explanation of simple log linear price models. they tend to work as an approximation, although I would alway point out that they're too imprecise to trade on. If you want the actual source of the graph, I already gave you a name, user Ducky1.

re: bitcoinwondertrader.de's graph (or whatever his name was). My attempt to capture the motivation of that log line wasn't meant sarcastic, or anthing. that's roughly the idea behind it: price never dropped below, so until now, this marks the lower bound of the all time trend. what you quote after that doesn't contradict my summary at all -- I never claimed proponents of the log trend line say that price could never fall below this line, just that, so far, it never *has* fallen below it.

That`s why i asked aminorex for a source.

sorry,but in case you evaluate TA like that it is ridicolous.

The line says.

This is not a staple TA technique, as far as I know. Then again, what you seem to consider acceptable (the simple "log line") is also just a mathematical tool that is used across a wide range of fields (biology, CS), not just in TA.

What distinguishes the various "all time price graphs" are the starting assumptions about the underlying BTC price function. The graph you posted in here (that I criticized) is a straight line on a log chart with its slope and y intercept motivated by the lower candle wicks. The TA motivation approximately goes "the all time trend never went below those points, so this line marks the lowest boundary of the all time trend". Agreed?

Next, the "simple" log-linear model is a line of best fit of BTC price mapped to a log chart. Basically, it is the "best" (i.e. least erroneous) line you can draw through all BTC price points *if* you assume price is generated a) by exactly one, immutable b) exponential function (like, for example, the function "price goes up 5% each week").

By the way, assumptions a) and b) also hold for the "hand drawn" line you posted, just that it's not a line of best fit, but a line that connects the lower extrema of the candles.

The log-log-linear model, the green line in the graph above (which was made by user Ducky1 by the way, IIRC), does the same thing, find a line of best fit. Assumption a) above is the same, but assumption b) is different now: instead of assuming that a simple exponential function generated our price data, we are now looking for, i.e. we're approximating, a double exponential function.

Hard to believe price could rise that fast? I know I am skeptical about it. Then again, if you accept the possibility of an exponential price increase, I see little reasons in principle to outright reject double exponential growth.

@aminorex,
sorry,but i can  not follow the more mathamatical Discussion about different log scales.
In my textbooks about TA are only log Charts exposed and explained.
Do you have any source about your preferred log(logx) Charts just for my understanding what we are talking about ?