Topic: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion - page 30026. (Read 26709950 times)

@JorgeStolfi pretty impressive piece of work there. i think you made quite a point altough a forecast between $300 - 2200 by feb/22 is quite reasonable and easy to apprehend.. but +1 for the demonstration

Here is my prediction for the coming month:



The plot shows the Bitstamp prices from Nov/2013 to Jan/2014 (purple) and estimated lower and upper bounds for Feb/2014 (green).  I claim that, in any 1-hour interval in the coming month, the Bitstamp price will be within the two green lines above, with 95% probability.

For example, I claim that on Feb/22 the price will be between 300 USD and 2200 USD with 95% probability.

(Note that this is not the same thing as saying that the entire price plot will stay in that region for the whole month with 95% probability.)

This prediction is based on the simple "log Brownian" model that I described a while ago.  Namely, it assumes that the price change from one 1-hour interval to the next, in log scale, is a normal random variable that is independent of the previous history. 

More precisely let P(i) be the weighted mean transaction price in the 1-hourinterval number i.  Let Z(i) be log_10(P(i)). The model assumes that

  Z(i+1) = Z(i) + C*RAND(i)

where the factors RAND(i) are independent random variabls with zero mean, unit deviation, and Gaussian distribution.  Therefore, for any n > 0,

  Z(i+n) = Z(i) + C*sqrt(n)*RAND(i,n)

where factors RAND(i,n) are again random (but not independent) variables with zero mean, unit deviation, and Gaussian distribution.

Analysis of the Bitstamp prices from Sep/2013 to Jan/2014 yields 0.00964 as the best fit for the parameter C.

Since 95% of the probability of the Gaussian distribution is within 2 deviations of the mean, the model implies that, n steps in the future,
the value Z(i+n) will be within the values

  Zmin(i,n) = Z(i) - 2*C*sqrt(n) and
  Zmax(i,n) = Z(i) + 2*C*sqrt(n)

with 95% probability, where Z(i) is the current (last known) price.  The green lines are these two bounds, converted back to linear scale (Pmin(i,n) = 10**Zmin(i,n), etc.)

More specifically, according to the model, at any specific 1-hour interval i+n in the future, the log price Z(i+n) will be

   below Zmin(i,n) with 2.5% probability;
   between Zmin(i,n) and the current price Z(i) with 47.5% probability;
   between the current price Z(i) and Zmax(i,n) with 47.5% probability;
   above Zmax(i,n) with 2.5% probability.

Note that, by this model, the future prices P(i+n) may be on either side of the current price (red line) with equal probability, even though the inverse log mapping yields a much wider range above than below.
 
Of course this model is quite rudimentary and basically useless for traders.  There may be more sophisticated models, but I doubt that they can yield better predictions. 

(The Brownian model is visibly inadequate for small n, since the log price increments from one interval to the next do not have a Gaussian distribution.  As a consequence, the 2*sigma interval Zmin(i,n) to Zmax(i,n) contains somewhat less than 95% of the probability.  However, by the Law of Large Numbers the distribution becomes almost Gaussian after a few hours. )

(before people ask: no, a model with a linear "historical trend" term Z(i+n) = Z(i) + T*n + C*sqrt(n)*RAND(i,n) does not seem appropriate, and its predictions for the next month would not be significantly different.)

I really dont like these Winklevossies. It seems they only try to make more money outta other people hard work and with daddy's money. They dont see the interest in bitcoin but only that grabbing 1% of it all would make them richer. They just pretend to be so smart but they just seems to get f**cking second if not last all the time.

ergo Zuckerberg ditched them
ergo Satoshi (and even FBI) got way more BTCs than they can ever dream of
ergo them ETF is far from opening.
ergo i wont consider a single news related to them as they mean nothing.

I have seen many instances of performing a cross trade for the same client.  

Imagine a stop loss order getting hit for a client who then immediately reverses his trade position.

e.g A guy is long 50 and then wants to go short 25.   In this instance if the broker has somebody who wants to go long 25, then a Sell 50 Cross 25 does the job.

The volume of the cross trade does not have to match the initiating trade volume.  As long as there are other trades to match the cross, then you can do whatever you like...

EDIT:  I just noticed you said "account".  That would be pointless as all you are doing is generating fees for the broker.

I want expancive coins.

Hmm...


http://www.wired.com/wiredenterprise/2013/12/fbi_wallet/

Thanks, but that's for two different brokers. We are talking about an account buying to himself.

Close but not quiet there. So Winterflosss' have how many BTC? How about the SecondMarket (think i remember BTC70K been throwing around). That's a lot of BTC. At the meeting IIRC someone from the panel asked where they get their BTC, answer was muffled early adopters and other sources. I doubt early adopters are business people and what price do you offer them? If it was me to entice i'd offer some % on top of current exchange rate who would pass that up? And dump say 10% of the acquired BTC on the market. 70k bought, 7k BTC are dumped on market to guarantee the lower buying price. Small price to pay so you get as many coins and hold it from CCMFing. It'll continue as long as they'll be major trades off the market while relying on the exchange rates (what else would you use).

Edit: and for early adopter why sell on exchange and loose on slippage when you can sell for a premium and without slippage

I'm gonna nominate for your PM. Free BTCooze for everyone. Yeah!

Let's use Corn Futures as our commodity.

Broker X has 2 clients.

Client 1 makes breakfast cereals.
Client 2 is Jo Farmer with 5000 acres of corn that will mature in 2 months.

Client 1 wants to buy 200 tonnes in 2 months.
Client 2 wants to sell 100 tonnes in 2 months.

Broker X enters the market place and offers to buy 100 tonnes.
Broker Y sells him 100 tonnes.  Broker X immediately "crosses" 100 tonnes.

The "crossed" trade is a buy and sell at the same price.

Broker X has now bought 200 tonnes and sold 100 tonnes fulfilling both orders.

I was lucky enough to work in the Australian Futures Exchange during the "open out cry" era.  "Open out cry" is trading directly with a bunch of people that is monitored by officials who then relay the trades to the outside world.

Imagine 200 people in a circle 30 feet wide all trying to trade.   I was on the desk relaying buy and sell orders to the traders in the circle.   It was up to the traders to figure out when to "cross" or not.

The movie Trading Places shows this type of exchange.  HTH.

EDIT:  You cannot perform a cross trade unless you are already in a trade. 
In the example above, Broker X could not simply cross 100 without first trading with Broker Y.

Explanation

had some fun with charts.



 

I think I might wait for the year of the Goat

You have to hope for some bad news. 

We got trolled by China thats for sure.

New exchange opening in Hong Kong in march. Thats what I call a crash...to the moon !

Look at the 10-day/15-minute chart with enabled Parabolic SAR on http://bitcoincharts.com/charts/bitstampUSD#rg10zig15-minztgSzm1g10zm2g25zvzps

It really looks like a dragon!   And its snout seems to point up

Happy Chinese New Year. Wonder where the horse will take us, but I am very tempted to go all in at this time.

Those darned Internet promises again.

i was promised cheap coins. are they coming or not? i sold some in 770s. 

That's how I first read it too. 

LOL.  When I first read that I thought you were calling my explanation a piece of ....

I don't know much about Proof of Stake, but I understand that the current priority scheme is one of the denial-of-service protection measures in bitcoin.  It makes is so that legitimate 10 mBTC transactions built from coins that have been sitting in your wallet for a few days have a higher priority than someone ping-ponging coins back and forth every block trying to bloat the "unconfirmed transaction" and increase confirmation times for the average user: https://blockchain.info/unconfirmed-transactions