Topic: rpietila Wall Observer - the Quality TA Thread ;) - page 230. (Read 907227 times)

for the record: broken at around 10:00 UTC on 10k volume.

From my background the intuitive thing is to use F1 measure as a score.  Or area under ROC curve.  There are good wikipedia articles about these.

I have not thought it through, wanted to have feedback!

   Good times ahead it appears! 

Hey, my fortune cookie from today at Panda Express said, "YOU WILL BE COMING INTO A FORTUNE"

Does that count as confirmation!?   

And only 1 day after...
Quick TA update (at $500):
- 6H candle color/volume: after a row of tall reds we have turned exclusively tall green, conclusion: reversal seems confirmed
- Bid/ask strengh at market (Bitstamp): slippage to sell 5k: $77, slippage to buy: $83, conclusion: potential for high volatility
- Trendline comparison: we are now at -0.310 log units. The trendline is at $1,022 and rising $7 per day, conclusion: rock bottom (note: it is not necessary that 'rock bottom' will change until the parabolic uptrend starts, because the trendline is itself rising)
- Sentiment: awaiting a breakout or a pullback
- Prognosis: reversal seems confirmed and <400 fades, long-term buy zone

Quick TA update:
- 6H candle color/volume: BREAKING - huge green candle beats the previous reds AND action afterwards is very promising, conclusion: probability of recent reversal further increased
- Bid/ask strengh at market (Bitstamp): slippage to sell 5k: $84, slippage to buy: $143, conclusion: potential for extreme volatility
- Trendline comparison: we are now at -0.341 log units. The trendline is at $1,015 and rising $7 per day, conclusion: rock bottom (note: it is not necessary that 'rock bottom' will change until the parabolic uptrend starts, because the trendline is itself rising)
- Sentiment: short covering/panic buys are starting
- Prognosis: getting better; probability for going <400 gets smaller by the day, long-term buy zone

And I am quite sure I know the reason for that. It is the extreme information asymmetry between Bitcoin owners and non-owners. (To simplify,) Bitcoin owners know that bitcoins are very valuable, and they buy and hold as much as they can. But as a result of their price going up, it forces people to sell, not because they don't trust Bitcoin, or expect the EV to be anything less than $100k or whatever in a few years, but because their entire net worth consists of bitcoins and it is rational to diversify (cf. Kelly betting). Even if the price goes down, these true believers cannot buy much more because the same optimal allocation strategy holds true.

The ones who don't own bitcoins, don't know it is good They are converting to bitcoiners at an exponential rate, though (see my previous post, and this thread for the ownership distribution). This increasing adoption gives the steam to the rise of price, in a self-sustaining virtuous cycle.

First only very few people knew about Bitcoin, and they were technologically astute and early adopter type. Many could start using Bitcoin immediately upon hearing. In the second phase more people heard, but they were, on average, slower. In the third phase or so, in which I belong, I heard and it took me 12 months to buy. In the next one, people who heard in 2011, propelled the boom in 2013 because their average decision making time was even longer. In the whole of 2013, especially the time around the peaks, 100s of millions of people heard about Bitcoin. On average, these people are even slower than previous ones, perhaps taking on average 24 months to enter (and also a smaller percentage of them enters). But they are so many! There is nothing you can really do to prevent the fraction of these people adopting Bitcoin, and by doing it, their action increases the price again by a decade, letting the rest of the planet to hear about it and putting hundreds of millions of people in the pipeline.

Bitcoiners know it, the rest don't. The price does not go to $1 million in an instant because only the ones who realize the above thing, can push the price up, but it will nevertheless go there eventually, because the above thing is a self-sustaining loop. Therefore buying bitcoins when you read and realize it, is the most lopsided bet you can ever make. You can actually pay $460 for something whose EV (expected value = average payback of all scenarios weighted by their probabilities) is in between $100k and $1M+. ONLY the fact that people realize this one at a time, slowly but exponentially, keeps the bitcoin price "at check", growing at an average of 1000% per year, for 5+ years now.

My wealth is dependent on the above being true. Nobody has explained to me, why it is not so. The stage is yours!

Kudos for the person who explained this to me in 2010, after which it took me 12 months to buy, after which it took an additional 18 months to realize it, which realization threatened my sanity, which was only saved by starting to smoke cigars. After 12 more months I tell it to you, please don't repeat my mistakes. Consider if it is valid, and invest accordingly. I am quite sure that next month you will not see this low prices any more, because the information is freely available.