Topic: Here we go again, another major price drop for bitcoins - page 2. (Read 23164 times)

Don't say you sold at a $2 premium through PayPal. Please.

Likely because you haven't understood the discussion you replied to

Traders don't have to outperform chance because markets simply don't move by chance. Why is this so difficult to understand?

Helps to hold coin and $ in several places/currencies at once.

BTW the trades were in TH-LRUSD  It's hardly giving away any information to say the smaller/less liquid boards have some fun opportunities.  I've done some "interesting" trades on wbxAUD and B7EUR recently (although I have some issues with B7 switching currencies unexpectedly).  A few weeks ago it was TH-AUD, but I don't have many AUD left there at the moment.  I don't bother trading on Gox much - no fun.

Edit: an afterthought, now Gox is doing JPY I might play there a bit more, but none of the exchanges uses my home currency so I don't particularly care which is which - I started originally with PLN (zloty's?)

Now, if only bitmarket.eu finally got their Paxum option running, like they said they would

http://bitmarket.eu is a good place to sell at a premium. I know because I usually buy at a premium there. There are large differences in price just depending on whether you want to look at trades in USD or EUR.

(Since it's P2P it's difficult to arbitrage though since you get a several day delay)

Where did you sell coins for $10.50? Mt. Gox has been trading 8.71 - 8.21 in the past 24 hours.

catching up to a different timezone, I'm happy to be "lucky" using the information I have on unknown causality.  Knowing the speed of trades helps when placing opposing bets, but that's moot.  I did both Classical and Bayesian stats at uni, but for post grad my Professor was very much the Bayesian school focused.

I was interested to wake up today and see I had sold a block of coins (about 60) around $10.50 when most of the trading was $8.40-$8.50.  I must be truly ignorant to have that happen

And they both do equally well/bad in the market, according to available research.

Yup, Doctor House expressed this wonderfully in an episode.


Actually, radioactive decay has a very certain and well understood cause.  Unfortunately, that cause is a quantum effect, so we can't predict it.  And if all of the experiments into J.S. Bell's theorem are right (and they certainly appear to be), we won't ever be able to predict it.  It isn't just that we don't know about the internal wheels and gears inside the particles, it really appears to be that there really aren't any.

At any rate, this isn't the right discussion to be having.  The bitcoin market is chaotic, not stochastic.  Actually, markets in general are chaotic.  Chaotic phenomena are totally deterministic, in principle, but never predictable.

Re: what is random and what is not, I would encourage anyone who is interested to learn about modern probability theory (laid out by Kolmogorov in the '30s) and stochastic processes.  One nice thing about this theory is the prominence that conditional probabilities and conditional expectations take.  This allows you to describe 'deterministic' and 'random' as simply two extreme points on a spectrum.  Something is deterministic when conditioned on a large information set, something is random when conditioned on a small information set.  Probabilities are always relative to an information set*.  Something that seems random is actually highly predictable given the right information, and something that appears predictable would have appeared random if you knew a little less.

One person may consider rolling a six being p=16.67%, whereas another person who noticed the die being slightly oblong might consider rolling a six being p=20%.  Another person with a supercomputer and highly accurate motion detectors might see it as p=0% (or 100%, depending on what number his supercomputer spits out).  All three people can be right in their own assignments of probabilities, the different numbers just illustrate that the probability of an event is always with respect to a particular information set.  Two people with different information will assign different probabilities to the same event.  It's not that one is wrong and one is right - they're both assigning the correct probabilities as they see it, it's just that one knows more than the other.  The more you know, the less random things become.

Trading is like that - you have some people who know almost nothing about what's going on..they don't read the news they don't read company reports they don't look at historicals; they don't analyse anything.  You have other people who spend their entire life reading all this stuff and conclude slightly different probabilities for assets rising or falling.

The point here is that the uninformed trader will see everything as random because from his perspective it actually is random.  It's wasn't that mortgage-backed securities actually had an objectively high probability of default as such, it was just that he didn't go out and grab enough information that would have revealed to him a high probability of default.  He sees things go up and down and has no idea why.  He sees some people make money and others lose money and that too looks random.  He sees the smart people who made money betting against subprime and assumes they were just lucky because, after all, this event was pure randomness.  Then he looks to the people who lost money on subprime and says, "well they wore the same pinstripe suits and they worked in the same bank and they drank the same fine wine, so they're clearly indistinguishable from those other guys that made money...hence verifying my position that it's all just random and unpredictable".

If he was uninformed but smart he would realize that while to him things appear indistinguishable from noise, it could be that to people better informed it would be more predictable.  On the other hand if he was closed-minded he might think "well if it appears random to me then it must be genuinely random."

This is the problem here...it's easy for things to look random or unpredictable, you just have to bury your head in the sand and ignore all the information that comes your way.  For things to become predictable you need to do hard work, hence not very popular.

* A good candidate for an absolute probability may appear to be the unconditional probability.  However, for any probability space with measure P you can always embed it in a larger space with a new measure Q that agrees with P in the small space but disagrees outside the smaller space.  So while the unconditional probability looks unique and objective once you've constructed the probability space, if the space had been constructed differently then the unconditional prob would have been different too.

What's the weather going to be like in six days?

(Traders still don't outperform chance. If you want to claim they do, please point to relevant data)

I agree some of his posts are hilarious.

But, there is no chance in trading.  There may be factors unknown to you, but that does not make it chance.  Everyone is placing conscious bid/sell orders and the bots are running according to algorithms dependent upon set parameters.

The more factors you are aware of, and the more you can understand the interrelationships between these factors simultaneously, your returns will be better.

I said this in another post, but chance in itself is a bogus word.
Saying something is due to chance is saying that acausality caused it.
Even probability theory doesn't rule out causality (e.g. the rate of decay of radioactive isotopes is said to be acausal) because one cannot assume that they can necessarily perceive/understand the logical syntax that guides this unique process.  Just cause you don't understand it doesn't mean it was luck or chance.

And, the Bitcoin market is far from the probabilistic nature of radioactive decay.

I'm sorry, but if you want to participate in a serious discussion I suggest you do it from a non-troll account. While I applaud the troll posts you have in your posting history (some of them are really really funny) it's just impossible to take anything you write seriously even if that would suddenly be your intention

You can't really gain an 'upper' hand in trading without a HFT bot or insider info.
Of course quality access to real-time news feeds & an ability to interpret them helps (if you just buy low & sell short after minor price increases) but that's about it.

Buying stocks is very much chance just as buying bitcoins or any other commodity.

The price is determined only by other sellers and the market can panic at any time.
If you don't have a cutoff where your program automatically attempts selling off all stock you could lose a lot in a short timeframe.

There are size limits on any trade, so the exponential returns complaint is false.

There is no chance in trading, you've just got to learn the rules.

Yes, that's the myth. It's also unscientific in that it's not falsifiable.


It isn't, of course, you just answered it yourself:


The only way to know (not guess) that your arbitrage trade will result in a profit is however if you cheat. Else you're just lucky in that your trade was executed before someone else's trade. After all, you're not trading based off knowledge no one else has.

FA fund managers and TA scam artists claim that they can beat the market with their "skill". There's no data set, and there have been much research into this topic, that indicates there is such a "skill". If there were, we'd see a skewed bell curve.

I should have added that most of my trades were not simple arbitrage, but coincident trading definitely helped with some of my profits (that is, I did have opportunities to buy and sell BTC at the same time with large spreads either in the same currency or multi currency).  Not sure why that would have been cheating anyway.  Maybe because I used my brain.

Historically, one of the nice things about analytics is if they work, everyone uses them and the advantage is removed, or else the real world effects get in the way.  Fischer, Blanck and Scholes didn't get rich off their work playing markets, but they did nicely out of their fame as economists/mathematicians.  (a further option is they do work, and no one would publish the info, they'd use it instead).

You "make thousands of dollars EVERY WEEK simply by playing the stock market" so assuming as you're so onto a sure thing you would naturaly be also reinvest nearly all your gains & are therefor are getting exponential returns, soon you will own the whole world or perhaps it's just not that simple or scaleable

how many $ thousands per week on average do you make & from risking or playing with just how much capital, without this info & more then "This is a ridiculous claim"

... which only exist if you cheat [colocated HFT], else the only factor deciding whether you're successful in using them or not is "luck", not skill, which is what we're discussing.


Quantity? Of all the words that's not the one I would've used. But sure, if you want to use that specific definition I would say that available research puts it at 0%.

(Your terminology, "getting to it", made me quite sure you were not using the accepted definition but something dreamt up from someone who indeed knows how to make money off traders. By selling them get-rich-quick books)