Topic: Why didn't you sell? - page 4. (Read 13386 times)

It did, and you were wrong.  Even if it goes to 0 tomorrow, for many, holding was the right decision because now they can probably cash out higher than they would have been able to from a panic sell.  Arrogant prick.

good things come to those who hold

Um it is .36 now after a few more bad attempts to increase my small holding trading.    I did not even try to gain some of my losses back during this past week.  I have learned my lesson the hard way and as hard as it is say, BitChicksHusband was right yet again.  Sigh.  That is more painful then the lost .14 coin!

I see some people trying hard to find some bullish news to compensate for the china crisis. I 'm talking about the news from the swiss parliament.
That makes me suspicious.

Seconded. JayB's line of thinking is the reason why most people are stuck in financial dependence. It's part of the despair to not even do the little things which lead the path to prosperity.

addendum: There are two ways to accumulate bitcoin. The trading and the mining...

Nice of you to say, I'm honestly truly just looking out for other people, maybe I'm wrong. Who knows. I think mostly everybody on here is the little guy, I like to see the little guy do well.


I started with $100, its all I could afford at the time and all I felt I could risk.

The biggest risk I think today is having no BTC if it goes mainstream. YMMV.

I sold 80% of my coins between 1100-1200. Picked up some coins on this crash but almost all out now. Really hoping that I didn't miscall this bull trap....

cuz i dont hold btc except of one

I think it takes something more than common sense to successfully daytrade. Just look all those ridiculous wannabe daytraders that  are posting random graphs and consider that technical analysis.

Unfortunately it will likely be deemed 'dumb'. :-)

Very well said.

Ugh, you are totally off topic with the trading fees argument. That has little to do with the point I'm making.

I'm going to draw a comparison here with the diet industry.

In the 1980's the USDA published guidelines about what comprises a healthy diet.

30 years later and in the face of overwhelming evidence against what they recommend at the time university educated nutritionists still recommend a 'balanced' diet based on those principals. Such that the foundation is bread and cereal.

Obesity, type II diabetes, metabolic syndrome are running rampant. The nutritionists have tried everything to justify why their food pyramid can't be wrong. They just can't see the glaring truth that people should eat plant matter first and foremost (vegetables). Everything else sparingly.

You remind me of those nutritionists, university educated, smart enough yes, but so sure of what you have been taught being 'true' that you refuse to think for yourself.

Time and time again in this thread people have spelled out the folly in trying to trade based on such naive heuristics as 'the china news was bad, so I would have sold'. I gave you an unlikely, but yet quite possible scenario in which you could lose badly and you ignore it. Instead telling me all about how you can find out the news before anyone else, know exactly how that news is going to affect the market, and then trade accordingly.

The news does not move markets, people move markets, and people are hard to predict. If people are hard to predict, then you are better off using something else. Even elliot waves is better than trying to trade the news!

I ask you this - how do you know the china news was bad, did you know that as soon as you read about it (because to me it looked good) or are you only able to tell us that after the fact because there was a sell off. Did you read about it before the market moved, or was the market already moving? If it was how far had it moved, do you still have time to make the trade, how did you know it wasn't going to reverse sharply?

Have you not noticed that every day the financial news is full of post-hoc rationalisation about why the market did this or that today. Its all written *after* stuff happened. At best you get semi-predictive news, written by somebody from an organisation that has a vested interest in trying to influence market sentiment one way or another. Much like you are doing now.

Was the silk road news bad, it certainly looked it, turns out the market rallied after that little bombshell. How is the fed taper going to affect the PM market? What's the news coming out of switzerland going to do to the price? Why are we already closing back in on $1000 is it a dead cat bounce or the next leg up? Was it the keiser report that explained the run up in LTC, or the interest in china, if it was china what caused them to pick it up? Do the chines watch the keiser report? how do you explain the subsequent NMC rise, a count that was so badly broken it looked to be going to zero.

Most of all I would like to know what on earth sparked the 2000% ANC rally on nov 22nd? I was just hours away from having some serious coin in that, bitcoin was flat, I put in a buy just under market price expecting it to fill, I came back the next day and 90% of my order hadn't filled (at least I got that tenth!), instead it had tripled overnight. What should I have done at that point? (I actually just bought what I could and had to be satisfied with the smaller position, because I believe ANC brings something new to the alt coin scene - here I go pumping it up eh!) Anyway god knows what triggered the rise - perhaps it was my buy order? Bitcoin was flat (for bitcoin) that day. Maybe a dog barked in Sweden?

Why the rise in FTC on the 30th, and why the subsequent retreat? Do you know? I don't but I was able to acquire more BTC through rebalancing and still retain a significant amount of FTC.

I watched all of these happening, I watch a lot of alt coins all the time, its starting to prove more profitable than my day job. I'm mostly in BTC but I also have a little bit of various other coin that I think might be contenders. I read the news and watch the charts but I don't pretend to believe that I have enough information to be able to 'trade' the way you describe it. I gently rebalance my portfolio, I look to mitigate risk, I massage the numbers to keep the ship on course. I do not chase the pennies. I let the coin do the work, and when it has appreciated according to the plan, I sample its fruit. I do *not* chop down the tree thinking a bigger one will grow!

This (to me) is reality, its about preservation of capital, acting rationally, keeping cool through the lunacy of the whole thing. I wasn't old enough to be part of the dot com boom and bust, but this is comparable, maybe even bigger.

I survived through the practical application of knowledge gained from being in various markets for some years. Equities, leverage trades, options. I had successes, which seemed to be perfectly understandable because the markets did exactly what they signs said they would do. I patted myself on the back. The losses, were excruciating, because the markets, they did exactly the opposite of what they said they were going to do - but only just enough to stop you out, before going on to do exactly what you "knew" they were going to do I was convinced that TA worked... and it does, until it doesn't. It was round that time when I read talebs work. This is what changed my stance on TA. I can see how it works, and I can see that if you have enough resources and are quick enough you can gain an edge, but the stress and time for the gains (with limited capital, you can only make limited gains) it just doesn't add up. So I had to unlearn everything I knew. Now I am like those annoying ex smokers, that cough and splutter in public at the merest whiff of a cigarette. No really, I *am* one of those annoying ex-smokers

Then, more specifically with BTC I learned through the stress of trying to work the $1-$32 bubble, and the anguish of what to do in the months that followed, how the charts didn't behave like they 'should' how nothing seemed to make sense.

This experience taught me so much about bitcoin, and more importantly about myself, what my greed and fear looked like, how they affected me. Why I did the things I did. Only then was I able to confidently instigate a plan, and to have the patience to execute it without fear that it is wrong. Everyone else in the world might think its wrong for them, but my plan is exactly right for me. This is when we come back to the notion that some random on the internet can come along and try and tell me "I should have done X": utter horse manure.

University teaches you a lot, I won't deny it but the most important thing is not to know stuff, but to know when you don't know stuff. I have to keep learning, I know I don't know shit about what is going on, and that is powerful, because that knowledge allows you to develop a plan that doesn't really on knowing what is essentially unknowable. So far, its all going swell, I am delighted to be me right now. Something I am not so sure I could have confidently said 5 years ago.

Seriously go ahead and try to trade! Or, save yourself some money by just posting what you *would* do if you had 100 BTC, as people in this thread have invited you to. See how it goes. I think sometimes the only way one really find out how hot the plate is, is by touching it yourself.

I'll start:

With my 100BTC my first move will be to move it all to an offline wallet, and wait.

IF anyone else wants to play along feel free

There's a difference between making money 50% of the time and losing the other 50%, and being right 50% of the time and wrong 50% of the time. You are confusing things my friend.

If you pick a stock randomly today and predict it will go up in the next hour without gathering much information about it, you'll have 50% chance being right and 50% chance being wrong. Now if you not only make that prediction but also put money into it, you'll have less than 50% chance of making money and more than 50% chance of losing money. Why? simply because you have to incur other costs in the process (i.e. transaction costs) and so you can only make money once the stock goes to a price beyond = (price when you invested + transaction costs + other costs).

The 50-50% odds you are giving would probably apply to the movement of a random stock in the market today, all else constant.

Now if on the other hand you pick a stock that is affected by a recent news (just like Bitcoins after the Chinese government's news) there will be more than a 50% chance the stock in question will go down in value if the news is negative and more than a 50% it will go up in value if the news is positive. I would confidently say the stock will go down at least 90% of the time if the news is negative and  up at least 90% of the time if the news is positive. Now off-course this will not go on infinitely, there's a time window when this will occur (but that's another topic).

So you tell me, if that's the case and it's that simple, then why don't most people make money trading right after news come out? there are a couple of reasons:
1- They find out about the news or act upon it once its too late (once the value adjustment has been made), and this happens much more quickly in mature market like the NASDAQ or the NYSE.
2- They perform the trade at the right time but the transaction costs offset the possible gain they can be making in the process. Why?
   - Because in mature markets stocks are less volatile and so move in a lower magnitude than new markets. That is to say that while Bitcoin might lose 40% of its value to a negative news, for a mature company the loss in value might be 1 or 2%, and so the transaction costs are high compared to the gain they could be making, which on average would cancel out the gains that are made in the process.

The reason to the above explanation has to do with an economic phenomena that says the following: In a system where there are enough players, and where information is equally available to everyone at the same time, opportunities cancel out. It doesn't mean that opportunities don't exist at all, it just means that opportunities don't exist on the long term. Meaning that if you are among the fastest 1% of people who short the stocks of a company after bad news, then you can make money in the process, but you can't beat the market all the time. Sometimes you'll beat the market and sometimes the market will beat you, and so on average it's a zero sum game.

This is why they say mature markets are efficient. Efficient in the sense that as long as money can be made, new players will join until the market reaches equilibrium (gains = losses).

What's different about trading Bitcoin? The only and most significant difference is that the economic conditions discussed earlier STILL don't apply. Meaning that not enough players are playing the game, or not enough players have access to information. By not enough players I mean, an amount of players that is not sufficient for opportunities not to exist. Those opportunities may disappear if more players join and the market becomes more liquid and less volatile. But for the time being, it's not the case. And this exactly, is why I said actively trading (in a rational way) might work in your favor for now ( because equilibrium is not reached yet).

The only time this stops being complete bullshit is when you are able to publish your trades in some thread, about the time when they happen, not three days after. Without that, your hindsight is not at all interesting or entertaining. But the reality is a bitch, and once you start publishing your actual trades, you won't open threads like this one In fact I don't think you would've even seen BTC at 1200 as you'd been completely wiped out of the game five times by now.

+5 Insightful

I am an awful poker player. I know exactly what I should do, but I go ahead and do whatever I feel like doing. I am great at bankroll though and so I have loads of fun because I lose exactly what I knew I was going to

Like the old lady at the slots, I am paying to be entertained, and there is no harm in that, unless you don't know that is what you are doing.

I could argue "that this could be the case 99% of the time and then there's 1% chance a black swan would occur and the market would move in a way that is different to what I predicted" but I didn't.

If that was the case, then your e.v. would be better, so of course your follow on statement makes sense.

The thing is the reality is that its more like 50% of the time you will be right and 50% you will be wrong. (nod to oda: some amongst us might be able to shift the odds to a few percent in their favour and get a positive ev in the long run and more power to them, but I bet even the best amongst them didn't *know* to sell at 1200 and buy at $700, I expect their gains were much more tame and much more wary of risking the whole stash. Just as the best poker players in the world know all about bankroll management.)

So on the whole the average joe is facing a losing proposition trading (is this really why you are suggesting people should trade?looking for a few more rubes?), unless you are *brilliant* or lucky. Thats the ~99% of cases. What remains is the chance of the black swan. As Taleb suggests, you position yourself to take advantage.

1. If BTC goes to 'da moon' you want to be holding as many as you can.
2. If BTC goes to 0 (or near enough) and never recovers you don't want to have missed out on the good times.

To hedge against #2 you take a little off the table at well planned intervals, but you try not to compromise #1. That's your big 'option' play so to speak. The insurance against BTC becoming new money whilst you had your eye off the ball.

Apply some math so to tweak your ordered for your own preference of locking in gains now vs potential bigger gains later. Stick to the plan. Zero downside and unlimited upside. Its the holy grail.

Possibly having 20% more BTC to then risk in the next trade where I might lose it all. Thats a bad proposition in anyones book.

I dont believe for a second this would happen (thats why its a black swan!) but...

Imagine another run up over christmas the price goes 'over $9000' then levels out at $9250, volume drops off, the sell side on gox is absolutely huge, buy side is weak... a red candle forms below the 10 day ema, then below the 30 day... bids are drying up, the sell side is f*kn huge and growing at an astonishing rate as so many 'normal' people are sitting looking at gains beyond there wildest dreams. tens of thousands of dollars for 2 or 3 btw that they picked up at $600 back in november....

You are convinced this is the next swing trade, you quickly dump your stash and get a good, no *great* price: $8900 only 5% off the ATH, you have thousands of dollars in play and bids every $200 all the way down to th 68% fib retracement so you can 'get back in cheaper'. By your best estimates you should have around 40% more BTC once this correction is over.

Then as the sell side is finally deep enough that Warren Buffet is able to put in that 210k BTC order he's been looking to fill without pushing the price over $20k. The asks are obliterated up to $18,500 WB is delighted that he averaged in at only $14k only $3bn to get 1% of the money supply, he was just hedging against BTC becoming new money. You are now all in dollars facing a potential 50% haircut on your BTC. The panic sends the markets racing higher... when do you buy. WB famously 'never sells' those BTC aren't going to be back on the market for a long, long time. What do you do.. the price is already over $20k and you haven't even had time to log into gox to place your orders to get back in, and really are you gonna rush to jump back in for a 50% loss? You are going to hesitate... $25k .... You are going to capitulate and buy in, then immediately take a 20% haircut as the price then stabilises at $20k.

Phew. what a ride!

I was asleep whilst all that happened and when I wake up the next morning I have a little chuckle about the fact the BTC has gone and done it again and shake my head in disbelief whilst putting through a SEPA transfer because a few of my sell targets were breached. Tell the wife who laughs again. We continue to joke about when I'll be able to get that porsche for 1BTC that she said I could have all the while not really believing it will ever happen, but at the same time starting to wonder....

Then, continue to hold... For The Longest Time™

nah, I guess OP is a bitch 

This is interesting as it sheds light on some of the nuances the OP doesn't really see.

Well..  There were several different types of wagers described in your post. A few of them were completely negative expected value bets. For example the old lady at the slot machine. That bet is expected to lose over the long term. You also mentioned poker, horse racing, and of course timing the market. These three all have a -EV for most and a +EV for a few. You can win money at poker.

In fact it is how I built my bitcoin stake slowly over the last 2 years. I am NOT A extraordinary poker player by any means except I am able to combine bankroll management with some skill at low stakes to win over the long term.

Similarly market traders can do this successfully if they are knowledgeable disciplined and lucky. I imagine trading Bitcoin is like skiing Mount Everest. There are many opportunities hiding in this arena for those who are skilled. But more than half the game is knowing when not to play. This is true for poker as well as trading Bitcoin. And just like poker the vast majority of traders would be unsuccessful and in a market like this one get their asses handed to them. So congratulations to all of us dumb buy and hold idiots to use Jays words. Congratulations to us for knowing to stay out of the game.

One thing you learn to do after a million poker hands or so, is spot a fish.

OP is a fish.  I'd welcome him at my table any time.

I'm sorry I included your nickname at first by mistake, I corrected it afterwards.

You can't predict with 100% certainty. But with a high enough level of certainty (above 90% or so I'd say) you make a gain in the long term. The reason why this works in a new and volatile market (and not necessarily in a mature market) is because the moves are so big (40 - 50%) that the gains you make by having a high enough certainty would offset the losses you make by missing it few times and incurring transaction costs.  

Edit: The reason why I know the Bitcoin market will move so drastically is simply because for the past 4 years it did so. It is true for nearly all new markets. I don't see why it would've been different this time (although it could've acted differently this time, but odds were saying otherwise). I was merely playing on odds. Off-course it's risky I never said it wasn't. But my argument is the odds were in my strategy's favor so why not take the chance. Life is about taking risks, and it's all about benefiting when the odds are in your favor. That's all I'm saying.