Topic: Crash!! - page 4. (Read 10594 times)

I still don't quite understand bitcoinica.

I only ever have 1 position. any additional buy/sell will adjust that position (base price and amount change). Are positions always unified into one position?

I now became in bitcoinica a weekly trader.

Also I greatly diminished my leverage, sometimes I use 1:1 for a while until a position go "against" me, but with 1:1 instead of that position auto-liquidating, I use my remaing spread to to improve my position for the direction I want (in hope of course, that the move against me was temporary and that it will reverse).

I am gaining money now, but I still have 2000 USD to get back all that I lost learning bitcoinica. And there are no guarantees that I won't do new shit and lose more 2000 :/

Spreads are dependent upon mtgox orders, and in some cases they are even negative.
The trick is to long into sell orders supposed to suppress the price which you think will fail and short into orders supposed to pump the price.

The problem though is you must 'know' that it will fail because if it succeeds you're screwed. This tactic get harder and harder the more money you have because there will be less coins or dollar available. Also your opponents you play against will become more and more powerful.

Another successful tactic is 'calling the top/bottom' and is the only time a market order is actually useful. That is during a low volatility period make the biggest market order you can and hope others jump on.

Once they do quickly liquidate. This only works with 1000+ coins though and is very risky. Because if they don't you loose badly.

I definitely agree that the spreads should be improved. The lag is a very interesting point. E.g. when prices fall or rise the spread is way out in Bitcoinicas favor and takes a while for it to catch up. Sometimes the market may have swung back before the spread went in your favour again or it was only in your favor for a brief few seconds.


Maybe someone could make a alternate bucketshop? Maybe test it out on LTC first. Would be interesting if we could get better spreads with LTC even with much less volume.

I was working my way up from 1 BTC trades to half my balance and then start using 2.5:1 leverage.  I'm very conservative.

I really don't know why you're using Bitcoinica without leverage. What's the point?!?!  If you were doing well before and you aren't on Bitcoinica, then surely you should move back to Gox.

I've day traded for months on Gox and it became my personal style that I really was good at.  Trying to day trade at Bitcoinica is impossible.  The spread is too large, the swings lag too much, and the algorithm he uses is made to do that.  It forces you into this long period swing trader.  My first 5 trades at Bitcoinica I lost big.  Then I finally learned how to use it, but I could only make 1-2% positive trades here and there...but I could lose 15% in no time flat if I got impatient and liquidated in order to switch positions for the next reversal.  I'm still using Bitcoinica, but it's like grinding teeth.  I don't even use leverage!  He really has to tighten up the spread by tweaking his algorithm.  He keeps blaming it on volume, something to the effect of "If more people use Bitcoinica the spread will narrow".  An yet he is #2 in volume already.  Forex brokers advertise 10 pips spread...it's common to see 1,000 pip spreads on Bitcoinica.

Bitcoinica leverage does help when you're too heavy in either currency. If I'm on the right side of heavy, I try to make my trades on Mt. Gox and move assets over to Bitcoinica for the stops (although I'll admit stop loss has not yet helped me). I like that I can place progressively larger limit orders inverse to probability: short 1 at $2.8, 10 at $2.9, and short 100 at $3 (it's a sure way to lose your shirt when you're wrong).

But considering I expected a peak today at $2.9, I'm annoyed I could only sell at $2.8 on Bitcoinica. I think you need to be gambling for the 50% weekly movements. You can't day trade on Bitcoinica.

This is the devil!
I don't even mess with bitcoinica, but I have been burned on market orders. I avoid them at ALL costs. If the train rolls out and I miss it, I wait until it falls back. Too many times I played catch-up after jumping on even a little late. The only thing this doesn't protect from is if/when it goes up and never returns. At that point, I'll just take the small loss, and buy in when the dust settles.

That's nothing.

I pretty much am beyond recuperation now, the only time I made a stop loss it gets filled and bounces right back.

I now believe the only way to really make money with bitcoinica is:

Constantly watch for reversal points.
Only place Limit orders, never do a single market order no matter what.

Only use stop orders once you are in positive p/l.

The bad thing is once you miss the train (miss the turning point) one time you are constantly running behind. So place a limit order so you just get your money back and start over. If you are using stop loss at this point you are guaranteed to loose money.


But that all doesn't help me I am down from 400+% to under 50%  
I was fairly successful until the 'manipulators' wall in such case you need to quickly switch sides if it goes against you not to loose money.

Back on topic!
I hate Bitcoinica spreads.  I shorted, the market went down, and I lost money.

+1 Proudhon, well said.

I think it's important for people to see Bitcoin not as a pruned and professional new tech project, but instead as a Wild West/industrial revolution phenomenon. With that context, one can see Bitcoinland is simultaneously full of promise and danger, brilliance and scam, optimism and torment. It's tumultuous - and will attract both great and terrible aspects of humanity into the fray.

It's a battle of innovation, creativity, patience, and stamina against uncertainty, doubt, sabotage, and trickery.

If you imagine Bitcoin as some formerly pristine thing that has been tarnished, that is the wrong outlook. Bitcoin has always been, and will for a long time be, a disruptive technology... and legacy systems, whether cultural, political, or economic, should not be expected to give up easily.

Bit regardless of all this, Bitcoin works. And as long as it works, I'll keep working with it.

This will make me take anything you say from this point forward much more seriously.  I hope that I will always be this open to legitimate critique.  There is room for disagreement here (and in the world at large) but let's try to keep things civil.  +Respect

The opinion of the majority is overrated. Bitcoin doesn't require 50% of people to support it. Hell, it doesn't require 1% of the people to ever know or care.

A single group using coins, even if it is thinly distributed across the globe, would make the project sustainable. There are quite a few options for such a group, and it's not insane to speculate on one appearing eventually.

All we can do is keep building services and shops.  People will come around when they consistenly hear about positive improvement in our economy without bad news to temper it.  We fucked ourselves letting it spike like we did and the only choice now is patience.

Good reply, proudhon.  Your points generally make sense.
How would you address the issue of the negative public image?

Ok, here are a few more thoughts.  To offer a partial defense of my mindset (not my tone, I admit to going too far), I didn't abandon bitcoin merely because the price declined so much.  I abandoned it because of why the price declined so much, and I still stand by my belief that the projects' credibility has been seriously damaged.  However, I'm going to back down from the claim that it's irreparable.  It's possible bitcoin will make it out of this and it'll be more widely adopted.  I'm not optimistic about it, but it's possible.


Basically, yes.  I regret it.


He's right.  I was hopeful about the project, not merely because the price was going up, but because it seemed like a very cool project was gaining serious traction.  Just to be clear, I've spoken to very few people IRL about bitcoin and even in my most optimistic days I cautioned all of them about investing in the project because of how volatile it is, and even explicitly advised against it.


For the record, I stopped mining even when my mining ROI was still quite high and it had much more to do with the heat in my office than the declining price.  I bought my mining hardware in late April/early May and it was paid off by the coins it generated in less than 3 weeks.

Again, I want to reiterate that I didn't turn into a bear troll because I wasn't making money anymore (I ended up way up in terms of overall money put in vs what I ended up getting out).  I turned because of why the price appeared to be declining and because it appeared to me and continues to appear to me that the prospects of restoring trust in the project to people not already involved is very low.

In any event, the bottom line is that I've been over the top, and I regret it.  I respect all the work everyone here and the developers have put in and continue to put into the project.  I would love for it to work out in the end and by that I don't mean merely for the price to be high, but I mean that I hope bitcoin ends up a secure, trustworthy medium of exchange/store of value/whatever.  Despite those well wishes I still doubt the project will ultimately succeed, but I wish to change my tone around here going forward.

Hehe. I'm up about 48% (in bitcoin) over the space of 3 weeks or so. If you are cautious, rational and understand market psychology and the emotions of the players, you can win. Sometimes... If not, you will probably lose more money than you gain and spend most of your time 'catching up' to try to get back to what you started with. This is a bad trading position to be in, because you are constantly 'on-tilt' emotionally, and prone to irrational decisions.

I think the best way to deal with that is to step back from the market for a few days and compose yourself. You should consider all of the money/bitcoin you invest already lost, since you should not invest nor trade with more than you can afford to lose. Then you can trade more rationally. If you are trading with excessive levels you should withdraw to whatever position you are comfortable with and trade with a smaller balance for smaller returns. That way you can learn the market, and suffer less punishing losses when you make a mistake.

It also helps hugely if you have not actually paid a lot of money for the coins, such as by buying them directly on the exchanges. Earning them by exchanging goods and services for them or mining them, means you are only losing your time (and maybe a little of your money if you are a bad trader, but far less).

I have earned all the coins I am trading with, and it helps you see bitcoin in a very different light.
I am trading solely for profit in bitcoin, not fiat.

You have to have a clear goal as to whether you want more bitcoin or more usd. In a falling market, it is easier to profit in bitcoin than in fiat. You should not be buying in a falling market if you want to make fiat profit. All you will likely be able to do is maintain your existing fiat value by accumulating more coins. But this in itself is not a bad strategy, because when the selling forces eventually run out and the market turns to a rising one or the purchasing power of the coins otherwise rises in the future, they will still have value of magnitudes greater. That is what a lot of people hope for I would imagine.

Also, I don't use leveraged trading platforms such as bitcoinica, because you can be far too easily hoodwinked out of your money. I trade on MtGox directly. The returns might be less, but the losses are more easy to live with and easier to correct and hold your nerve through. When you use leverage, you are sometimes not able to sustain the deep volatility of the bitcoin marketplace without a significant amount of capital behind you and a lot of balls. If you are trading smaller amounts, it is much safer to trade directly on the exchange.

Guess what happened to me
I made a 44% return on my first dollar.  I thought, "Yay! I'm good at this."  Turns out that when I put actual money in, my emotions took over and I began to lose money instead

If you want to practice. Just make a bitcoinica account with a dollar in it. See if you can successfully keep a steady return on that dollar.