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Tribal Elder
Tribal Elder
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Nov 11, 2019
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576
From your avatar, it seems like you are into software. Then I suggest you ask people who actually make good money in such jobs or as entrepreneurs. instead about asking PUAs about this. PUAs know how to get laid and that's about it..
 
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Rain

Tool-Bearing Hominid
Tool-Bearing Hominid
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Jun 13, 2016
Messages
534
Day-trading (or any kind of short-term trading) is something I'd lump into the arbitrage category. You're buying something you think is undervalued, to sell it later when it is (hopefully) more valuable... or overvalued. Again, most of the folks I've met who've tried day-trading are breaking even at best
By day trading what do you mean? Stock market? Forex market? Bitcoin and altcoin? Something else?

I think we're in a bull cycle market for Bitcoin, Etherum and some altcoins. By that, I mean buy and hold. The same thing happened in the last two bull markets for bitcoin due to the halving that happens before the bull cycle starts if I'm understanding correctly. You'd want to close your buy orders or convert your instrument back to cash once the bullcycle is over, as cryptocurrency might pullback bigtime once it's over. That's more investing as opposed to trading.
 

Tony D

Tribal Elder
Tribal Elder
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Jul 26, 2018
Messages
429
Funny thing but I just made a video about this. Might as well promote it here.

One thing about Upwork. I've applied there multiple times as a writer, and they rejected me every time because they say they have too many writers with the same credentials. Lol? There's loads of other places anyways.

 

Chase

Chieftan
Staff member
tribal-elder
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Oct 9, 2012
Messages
5,484
@Rain,

By day trading what do you mean? Stock market? Forex market? Bitcoin and altcoin?

Yes.

Any of that can be day trading.

If you are buying and selling you chosen investment vehicle daily, or nearly so, you are day trading.

Also, as noted earlier, if this is your strategy, you are almost certainly losing money to investors with a longer time horizon.

I think we're in a bull cycle market for Bitcoin, Etherum and some altcoins. By that, I mean buy and hold. The same thing happened in the last two bull markets for bitcoin due to the halving that happens before the bull cycle starts if I'm understanding correctly. You'd want to close your buy orders or convert your instrument back to cash once the bullcycle is over, as cryptocurrency might pullback bigtime once it's over. That's more investing as opposed to trading.

Right. Crypto's in a bull market right now. Probably still at the beginning of one. And historically a bull run does trail the halving.

The problem with trying to time the market is not knowing what the market will do (and yeah, there are all kind of charts you can look at... you can get into technical analysis with the Mayer Multiple and the MVRV Z-score and all kinds of things... you will still not be able to accurately call peaks or troughs).

If you're interested in crypto I suggest you get familiar with the Reddit board on that... a week or two of reading there will get your head right:


Also, there is a reason folks in the crypto space talk about HODL:


The smart way to invest is to a.) only use money you don't need, and b.) only put it into assets you expect to appreciate long-term, then c.) once you do, lock those assets away and forget you even have them for a good 15-20 years. Don't collect until they've fully matured.

That's smart investing.

Day trading or otherwise trying to time the market is basically just charity for institutional investors.


@Tony D,

One thing about Upwork. I've applied there multiple times as a writer, and they rejected me every time because they say they have too many writers with the same credentials. Lol? There's loads of other places anyways.

Interesting.

I didn't realize UpWork limited its pool of freelancers. I thought anyone could join to hawk his services & wares.

Well in that case I might just tweak my credentials/positioning... then go about applying for the jobs I wanted regardless.

Chase
 

Rain

Tool-Bearing Hominid
Tool-Bearing Hominid
Joined
Jun 13, 2016
Messages
534
If you are buying and selling you chosen investment vehicle daily, or nearly so, you are day trading.

Also, as noted earlier, if this is your strategy, you are almost certainly losing money to investors with a longer time horizon.
How long would the longer time horizon be? ie where is the crossover point between buying or selling daily, and closing it the same day.... versus buying and selling over a longer period of time.... that period being how long roughly speaking.
The smart way to invest is to a.) only use money you don't need, and b.) only put it into assets you expect to appreciate long-term, then c.) once you do, lock those assets away and forget you even have them for a good 15-20 years. Don't collect until they've fully matured.

I agree with point A. But not 15-20yrs.
If you have bitcoin for example, and the end of the bullcycle maybe comes up in August or something, and its at 50k. Why not close it? if you purchased it now at 30k, or earlier at 12k a few months ago, thats a significant profit, then maybe it has the big fall after the bullcycle. I don't know if just hodl for 15years is the best idea for bitcoin and others. If you close it near enough to the peak you'll make significant profit, and then if history repeats price will tank[go down]. Then buy at the start of next bullcycle.

I don't think you don't need to time the peak 'perfectly' to make a profit like this for bitcoin and maybe some others.
 

Chase

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I don't think you don't need to time the peak 'perfectly' to make a profit like this for bitcoin and maybe some others.

Suggest you talk to the folks on http://old.reddit.com/r/bitcoin about your desired approach.

There are a lot of guys there who have been in Bitcoin for 5+ years, many of whom are very experienced with what you're trying to do.

Talking to very experienced people about things you are not at all experienced with is basically the difference between, "Wow, I really like this girl. I bet if I just tell her I'm in love with her she'll realize I'm perfect for her too and we'll fall in love!" versus "I really like this girl, but guys are telling me to play it cool, make a move, and stay romantic yet chill. Okay, well, every fiber of my being wants to confess my love, but let me try this."

Or "Man, I want to go swimming in that ocean. It looks really inviting! I'll go to where that fun white foamy water is" vs "Well I definitely want to go swimming but the lifeguard says that white foamy water is a riptide that will pull me way out to sea then dash me to death on the rocks. So I should probably go swimming in the area he says is okay and not the area with the riptide, even though it looks really cool."

In general, you want to err on the side of getting experienced peoples' opinions on things first, try out their advice, then start getting creative with your own original ideas after.

Chase
 

Rain

Tool-Bearing Hominid
Tool-Bearing Hominid
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Messages
534
b.) only put it into assets you expect to appreciate long-term, then c.) once you do, lock those assets away and forget you even have them for a good 15-20 years. Don't collect until they've fully matured.

That's smart investing.

Day trading or otherwise trying to time the market is basically just charity for institutional investors.
So your opinion is that, it's way to risky to do any form of trading and/or holding/hodl, unless its 15-20yrs?
 

hey_lover

Modern Human
Modern Human
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Jun 7, 2016
Messages
101
There is no timing the market, only time-in the market. The truth about trading is that by doing it alone you are at a huge disadvantage, as you're at the bottom of the information chain so you can only be reacting to news and information when the smart money has already come and gone. Best bet as a retail investor is to take a longer term investor approach, and even better to put your money in a fund or trust and do something better with your time. You won't be able to compete with the investment bankers and hedge fund traders as they simply have far more resources and tools than you do.

The biggest hindrance to any potential gains is yourself so managing your behaviour is largely what will determine how successful you can be. So limit the number of decisions you make, put your money in a trust or fund run by a professional manager (even then 90%+ of fund managers fail to beat their benchmark) and if you're American, just buy an S&P 500 tracker fund and go fishing instead. Most people need to be burnt a number of times before they heed that advice, if they ever do.
 
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Rain

Tool-Bearing Hominid
Tool-Bearing Hominid
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Messages
534
There is no timing the market, only time-in the market. The truth about trading is that by doing it alone you are at a huge disadvantage, as you're at the bottom of the information chain so you can only be reacting to news and information when the smart money has already come and gone. Best bet as a retail investor is to take a longer term investor approach, and even better to put your money in a fund or trust and do something better with your time. You won't be able to compete with the investment bankers and hedge fund traders as they simply have far more resources and tools than you do.
I've been part of a paid[not expensive to join] private forex forum since the middle of last year. The guy now talks about cryptocurrency as well. I don't "trade the news". I noticed something in the charts and have my own way of trading, and its profitable. It's based on the daily time frame and the trades usually last a few days and sometimes many weeks. That's not how he trades though.

I have also learned to trade with the trend, like the guy who runs that paid private forum does. So, that's now two ways to make money. It's only more recently I've gotten good at trading with the trend, I did not pick it up right away.

There's also a third way, and that's 'investment'[as opposed to trading them] with crypto, gold and silver. I don't know how long I'll hold Gold/Silver, maybe a few years[Not 20years from today, no.]. We have a bull flag on Gold and possibly Silver USD charts, the measured objective of that might be a good area to maybe think about closing and re-enter on the pullback if we still in a bull market for those metals.

Why should I give my money to someone else[who might screw it up too I might add or have very very little growth and charge fees] and just go find something else to do with my time? Do you and Chase realise that you're scaring people off of trading/investing? I'm guessing neither of you have met a profitable retail trader.

The biggest hindrance to any potential gains is yourself so managing your behaviour is largely what will determine how successful you can be. So limit the number of decisions you make, put your money in a trust or fund run by a professional manager (even then 90%+ of fund managers fail to beat their benchmark) and if you're American, just buy an S&P 500 tracker fund and go fishing instead. Most people need to be burnt a number of times before they heed that advice, if they ever do.

Why not learn to trade, and then have more time for fishing? What if you can learn it like this?
october 21 2020
EURUSD at the time of this is around 1.18level

EURUSD 2:35 he mentions he exited some of his position for a profit. Price here is about 1.207 and he had exited a bit more when price was higher.

8:09 EURAUD price is about 1.60area

4:52 price 1.57area
6:50 measured objective target is multithousand pip move.
If it does go there I think it may take a few weeks/months.

I don't know that he actually traded this or just one of his ideas. Either way, it's one of the trades I'm in, and yes, its in profit. No, I won't be holding it for 15-20 years. I also have other trades that he doesn't always talk about anyway, eg GBPCAD don't think he's mentioned that in ages, yet here I am two long positions in profit. It might fail, there are no guarantees, but yeah I'm making my own trades too not just looking at his or other member ideas.

I'd like to touch on crypto again. When I mentioned crytpocurrency back on Jan 15, where was it?
BTCUSD high for that day was about 39,000. Bitcoin right now is roughly 48,800
ETHUSD high for that day was about 1,250. Etherum right now is roughly 1,750

If anyone wants an idea, not advice, just an idea, why not buy some Bitcoin or Etherum? It's only month 3 of the bull market, Etherum is way cheaper. You can also buy it through a broker, you don't have to buy it through a crypto exchange and have a virutal wallet or cold storage wallet with the password keys for the actual 'coins'. You can trade it as an instrument CFD[eg btcusd or ethusd]through a normal forex broker, you might also be able to do that through a cryptocurrency broker but I'm not sure on that last part. Either way I just do it through a forex broker using metatrader4, no worrying about the asset/coins being stolen.

Here's a few ideas on where Etherum might end up over the next few months
JustinBennetFX said:
I'm using a time-based target for everything. But if ETH pulls a 2017-style BTC rally, we're looking at $25,000. If it does more of a 2013-style rally, then $50,000 is possible.

JustinBennetFX said:
(3/4) If the crypto market cap is truly going to $10 trillion this cycle, and I believe it is (at a minimum), 30% of that would be $3 trillion.
Divide that by the projected circulating supply for #ETH of around 120 million, and you get a price of...
$25,000
(4/4)But that assumes Ethereum doesn't continue to chip away at Bitcoin's dominance.
In my opinion, it will.
In that case, even an ETH price tag of $25,000 may be too conservative.
If you buy ETHUSD for 1800, and it goes up to 25000 near the end of that maybe 9th month bull market cryptocurrency cycle, and you close it... that looks profitable to me. If you go through a forex broker, my idea would be don't use high leverage on cryptocurrency, easy to be tempted with 500:1 or 100:1 leverage accounts[which might even be too high/risky leverage for normal forex too], but a good idea is to request a leverage change to 1:1 or 2:1 for crypto.


Suggest you talk to the folks on http://old.reddit.com/r/bitcoin about your desired approach.

There are a lot of guys there who have been in Bitcoin for 5+ years, many of whom are very experienced with what you're trying to do.
Have a look at this tweet chart image showing Bitcoins bull market and bear markets over the years, using a monthly time frame.
Notice how the monthly time frame chart that he posted, each time Bitcoin surpassed its previous all time high, we have about 9months of bull market. What happens after that? The bear market for maybe 3years. Market pulls back what, over 50%? Why would I give all that back? I do not have any plans to hold ETHUSD for passed that 9month mark, let alone 5whole years or 15-20years. Why do you suggest going over to reddit to talk to people who might tell me to hold it way passed the bull market ending? If the bull market ends, thats it, close your trade! Why hold it?
 
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Chase

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@Rain,

First off, none of this is financial advice. FTC warning here. But just to give some perspective...

Notice how the monthly time frame chart that he posted, each time Bitcoin surpassed its previous all time high, we have about 9months of bull market. What happens after that? The bear market for maybe 3years. Market pulls back what, over 50%? Why would I give all that back? I do not have any plans to hold ETHUSD for passed that 9month mark, let alone 5whole years or 15-20years. Why do you suggest going over to reddit to talk to people who might tell me to hold it way passed the bull market ending? If the bull market ends, thats it, close your trade! Why hold it?

You're assuming the ability to a.) correctly call the top, then b.) correctly call the bottom.

Here's what I suggest you do, if you want to use the technical charts for Bitcoin:

  1. Pull up a price chart. You can use the one on Coindesk: https://www.coindesk.com/price/bitcoin

  2. Pull up the Mayer Multiple, the most accurate technical chart for telling when Bitcoin is overbought or underbought: https://www.buybitcoinworldwide.com/mayer-multiple/

  3. Pull up the MVRV Z-score: https://www.lookintobitcoin.com/charts/mvrv-zscore/

Next, plot each of the past bubbles -- there was one in 2011, two in 2013 (one driven by a single whale), one in 2017, plus there's the one we're in right now -- and, looking at the Mayer Multiple and MVRV Z-score, figure out where would've been the best time to sell.

Notice that if you go by the MVRV Z-score, sometimes the best point to sell at it is the first peak, and if you miss selling during it, you miss the best gains. Other times, if you sell at the first peak, you miss half your gains. Let's say you decide to follow the MVRV Z-score. How long after the first peak above the red zone should you wait before selling?

Now look at the Mayer Multiple. Between the date it first goes red and when the peak selling price is, notice that for each bubble the length of time between when the chart goes red and when the bubble peaks decreases. It was down to 20 days in the 2017 bubble. If you went by this for the 2020/1 bubble, the bubble should've peaked January 23rd at the latest. But instead it didn't. Bitcoin prices consolidated again, then the bubble resumed bubbling. We are now 45 days since the Mayer Multiple first went red, and it is still red, and the market remains a bull market.

So when are you going to sell? At what point?

Let's figure for the sake of argument somehow you properly time the peak, however.

Let's imagine Bitcoin does a 10x over its previous ATH and hits $200K somewhere around September this year.

I have no idea it's going to do that and have no information to say it will; I do not know. There's no suggestion to anyone here about anything.

We're just saying, for this hypothetical situation, it does that.

Let's say you call it correctly, and you set up sell orders for a quarter of your position each at of $160K BTC, $170K, $180K, and $190K. After it hits $200K, it then goes into a slow crash and within about 6 months has settled back down at around $100K. You didn't get out quite at the peak, but you got out very nearly so.

You're predicting it'll go down to $70K, at which point you'll start to buy back in. So you've got your funds waiting in reserve, with your call options in place. You watch as it goes from $100K, down to $95K, then back up to $115K, then down to $90K.

Then it goes to $120K. Then $150K.

Should you get back in?

You're still waiting for it to go down to $70K.

Then it hits $170K. $180K. $190K.

Suddenly it's $220K.

Then it's $250K.

$300K.

Eventually it dips down to $275K.

You start thinking maybe you ought to "buy the dip" and get back in... at 1.57x the price you got out at.

After that, you spend some time hanging out on Bitcoin forums, advising other eager young guys, "Don't be like me, son. Learn from my mistakes. HODL."

They scoff at you, telling you how silly you'd be to hold when Bitcoin follows these predictable booms following the halvings, then bear markets after the bubble bursts, and why wouldn't you profit take at the peak then buy back in on the dip...?

A few years later, you see them on there again, also chastened, also now telling people to hodl, just like you.

Again, no financial advice here, you can do whatever you want, and I personally have no idea how any particular financial vehicle will fare in the future.

But you might do yourself a favor, and do a deep dive into the technical charts, and see if you are able to use what you learn from the 2011 and 2013 bubbles to accurately predict when you should sell in 2017, and when you should buy back in.

Then see if you can figure out exactly when you should sell in this current bubble, and then at what point you'll buy back in.

(IMO, the hardest part is not timing the top -- it is deciding when to buy back in. Because you have no idea when that is, and everyone else who sold trying to time the market is also going to be looking at when to buy back in too)

Then also consider the fact that now you are dealing with billionaires, banks, hedge funds, and all manner of institutional investors also asking themselves that same thing, all while the money printer is going brrrrr like crazy setting up the dollar for inflation at an unprecedented rate (USD had already lost 1/3 of its value in just the first 20 years of the millennium alone, and that was at much lower levels of QE).

Keep in mind too that previous Bitcoin bubbles involved small numbers of total investors, with very few institutional investors. It is no longer that way. There are lots of institutional investors now, and by the time this bull market runs its course they are all going to be involved in it.

tl;dr: ask yourself if you, as an amateur trader, are going to successfully outwit the market, and all the very, very smart people who do this for a living and have access to all the same charts that you do.

Chase
 

Train

Chieftan
tribal-elder
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To add a few thoughts to this convo on trading. Train here, not Rain, as our names are really similar, hahaha.

I know one guy, a scalper (i.e. short term trading, like seconds to minutes in trade duration). He advocates trading with the big fish, the ones that move the market. Sorta like hitching a ride with the "big boys" if you will.

The idea is that individual investors can't move the market for liquid stocks/futures/etc. He doesn't hold long trades (duration of days to months) because predictive power goes down. One can more successfully predict what will happen in the next 6 minutes than the next 6 months.

He uses order flow data to trade. Basically like knowing who's buying and selling at variety of prices and volume. Think like being in a trading pit full of people buying/selling and jumping in when the big fishes enter the fray.

Don't know how much is applicable to cryptocurrency. But it seems to follow similar principles of order flow. I haven't traded these much.

But individual traders can be profitable. But I suspect these are a very slim minority. Vast majority wash out.

What I've heard is that the pros trade on order flow. If you look at trading companies computers, that's what you will see, order flow data. Rarely charts. This is what I've been focusing on now since my lack of progress using chart data.

I'm luckily profitable via swing trading and dogecoin. The latter I got in before the pump but left midway through the dump. But I'm focusing efforts on learning how to read order flow.

What makes trading hard are all the marketer pseudo traders pushing their BS and the legit people staying relatively silent either to keep their edge or disinterest in mentoring. Markets are brutal too. There were days I had 3 figure profit days only to lose it in literally 10 minutes.

But I'm keen on exploring this since it fits my lifestyle goals (remote, well-paying, solo part-time job). Plan is to invest half of earnings in index funds for long-term wealth accumulation and extra hedge should I get tired or lose my edge.
 
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Chase

Chieftan
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5,484
@Train,

He uses order flow data to trade. Basically like knowing who's buying and selling at variety of prices and volume. Think like being in a trading pit full of people buying/selling and jumping in when the big fishes enter the fray.

Don't know how much is applicable to cryptocurrency. But it seems to follow similar principles of order flow. I haven't traded these much.

If you can accurately gauge the moves major traders are using, could be interesting.

However, I'd recommend everyone interested in short-term trading read Nassim Taleb's Fooled by Randomness. He talks about a lot of these big traders and how easy it is to make money and look like you know what you're doing during a bull market. As soon as it turns bear most of these seemingly-prescient traders get wiped out.

There's also a Malcolm Gladwell book (I forget which one now) where Gladwell compares the success of hedge fund managers in one decade to their success in the next. If trading is a skill set, we should expect to see the best performers from the 80s largely remain the best performers in the 90s, the middle performers in the 80s largely remain the middle performers in the 90s, and the worst performers in the 80s largely remain the worst performers in the 90s. Instead it's complete random noise in terms of who ranks where in the 1990s, which strongly suggests hedge fund managers are simply making lucky (or unlucky) bets.

So, even with following large investors, there is not a guarantee you are going to consistently be winning.

During the 2008 recession, a lot of the institutional investors had their clocks cleaned. Fortunately for them the government was there to bail them out with taxpayer money... so really the banks got to enjoy their profits during the good years, and then taxpayers were the ones who got their clocks cleaned later instead. This is an important thing to keep in mind with these institutional investors: they can be very aggressive with their trades, because they cannot really lose (you and everyone else will bail them out, either directly with taxes or indirectly with quantitative easing, if they wipe out).

You, on the other hand, are not so blessed.

So you can follow along with them, but remember they are playing a different game than you are: play fast and loose, make money when times are good, get bailed out when times are bad. If you play like them, you can make money when times are good, but when times turn bad, and they always do, no one is going to bail you out.

With regard to cryptocurrency, the big obstacle with trying to track the behavior of major players is how easy it is to split up cryptocurrency purchases to make them look like smaller purchases by anonymous players. This was what Elon Musk did to buy up $1.5 billion of Bitcoin completely under the radar (he didn't announce his purchase until after it was complete... for obvious reasons. He got in at an average price of $33K BTC. His announcement restarted the rally and now it's $50K).

Most of the institutional players buy their crypto this way. Because the cryptocurrency market is a lot smaller, you cannot just buy or sell a very large amount in one go; the supply is too constrained. So you need to make a series of smaller buys or sells.

To avoid signaling to the market when they are buying or selling, they will make these buy and sell orders from a bunch of different, seemingly unrelated addresses. That's because if everybody knows Big Guy A is selling, everybody is going to start selling, and the price will fall and Big Guy A gets less money for the same sell order. Conversely, if everybody knows Big Guy B is buying, everybody is going to start buying, and the price will rise and Big Guy B must spend more money to buy the same buy order. If it looks like a bunch of random activity spread out over time, no one knows.

So normally these players look to keep their market movements very quiet, unless/until they want to affect the market (typically after they've already made their moves, so they can then sell high and/or buy back in low).

Chase
 

Train

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Good point, I've always wondered about the randomness of stock picking in the long term. I recall one publication utilized dart throwing to pick stocks randomly... And they beat experts too! But definitely, the average investor isn't too big to fail like what happened in 2008.

But these institutions like you mentioned have so much capability at their hands. They use tech to get trades in literally milliseconds. And they're using AI to try to better their high frequency trading. This one trader I follow mentioned how he used to get 2-3x more profit before the advent of high frequency trading. Hard to compete against machines for sure.

I haven't heard of those books but I'll give them a read! I have a total fascination with trading and that whole world. But yes, the more I get into that world, the more every trade seems like a crapshoot. And every analysis is a fart in the wind. Exactly like that scene in Wolf of Wall Street where Leo's character's boss says it's all a fugazi, hahaha. The biggest winning trade I got on dogecoin was luck honestly. And I would have had twice the profit if I didn't get greedy haha.

Ah yes, did see Elon announce that and have heard that these big players have ways to keep quiet. But they can make a splash when desired. Heard of this one big player gloating on how he single-handedly raised the price of coffee a few cents when he put a lot of buying power into it.

I could talk about this forever haha but agreed on your points here. I'd say trading is a loser's game 99% of the time. I'm even weary of index funds, the supposed "safe" way to invest.

For wealth accumulation, a small business seems more predictable at first glance. Perhaps real estate. But I've read how those 2 domains also have their fair share of graveyards full of people hoping to rake in the money.

Maybe I'll just buy a lotto ticket and hope for the best hahaha. Probably end up on one of those lotto winner murder documentary shows lol.
 

Rain

Tool-Bearing Hominid
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534
You're assuming the ability to a.) correctly call the top, then b.) correctly call the bottom.
So when are you going to sell? At what point?
There may have been a miscommunication. None of my posts here have mentioned any idea about shorting[sell orders] during the cryptocurrency bear market. Which is why, if you buy now, it does not matter if bitcoin reaches 150k or 200k because you timed the top wrong. Thats way more than todays price of bitcoin, you would be in profit. That's the point, 50k to 150k or 200k, how much more do you need? It's profit. Close it. Don't close it and hit sell, just close.
They scoff at you, telling you how silly you'd be to hold when Bitcoin follows these predictable booms following the halvings, then bear markets after the bubble bursts, and why wouldn't you profit take at the peak then buy back in on the dip...?
Why not just leave cryptocurrency alone after the bullmarket, and start buying the dip sometime, maybe a few months, before the next halving? You know, that means after closing your buy order near the end of the bull market[sep/oct 2021], and then not touching cryptocurrency for about 2years and maybe some more I don't have super precise chart in front of me. No need to worry about selling.

I have had thoughts about selling the cryptocurrencdy bear market, and its tempting but I don't know. Thinking more, it would be a worse risk reward ratio then buying in the bull market, so whether that still worth it I don't know for sure.

But being pedantic, that wasn't what I wrote in this thread. I've written nothing about selling bitcoin or etherum or any cryptocurrency in this thread until right now. You've made an assumption that's not based on any idea I have put forward here. The idea was to buy Etherum or ETHUSD, and you've jumped on it and turned it from a simple ,easy, buy and hold till maybe sep/oct 2021 and turned the idea, into a buy and then sell idea. Did I imply that somewhere?

Is your main concern about closing bitcoin too early? Or you think it might drop right now, and not go back up again?

You're predicting it'll go down to $70K, at which point you'll start to buy back in. So you've got your funds waiting in reserve, with your call options in place. You watch as it goes from $100K, down to $95K, then back up to $115K, then down to $90K.

Then it goes to $120K. Then $150K.

Should you get back in?

You're still waiting for it to go down to $70K.

Then it hits $170K. $180K. $190K.

Suddenly it's $220K.

Then it's $250K.

$300K.

Eventually it dips down to $275K.

You start thinking maybe you ought to "buy the dip" and get back in... at 1.57x the price you got out at.

At what point does bitcoin go through all those prices there? Is that before or after the next halving in 2024? If you're implying that buying at 1.57x the price you got out at[eg september/october 2021] would happen before the next halving, please provide a chart. I can't see any previous bitcoin bull market where price was 1.57x higher after the bull market top, without having a halving occur first. We've had three bitcoin halvings[including 2020] so we have had two previous bull markets before this current one.

If you are really concerned about that, you could close half or 75% or 90% something at the end of this bull market, and leave a little bit on just to see, but I wouldn't think that's very probable.

(IMO, the hardest part is not timing the top -- it is deciding when to buy back in. Because you have no idea when that is, and everyone else who sold trying to time the market is also going to be looking at when to buy back in too)
You could dollar cost average your way in, maybe some a few months before the 2024 halving, and some within a few months after the halving, and maybe some after that once it starts moving upwards towards its previous all time high.

About your scenario above of bitcoin dipping ,then going to a new all time high 1.57x the price I might have closed at in 2021, so this new all time high of 275k in 2022 or 2023 , like way before the halving in 2024, and then not dipping at all before that halving, I do not know. But if it does what its done before[bear market for 2years maybe a bit longer, and then halving], in what would then be 3 predictable cryptocurrency bull market cycles by 2024, then that would be an easy answer.

Did you or anyone you know lose money trying to sell bitcoin and/or bought bitcoin at the wrong time? Was it because of the conflicting Mayer Multiple that you mentioned above?
 
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Chase

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I know a guy with a bunch of stories like that. All his buddies into crypto sold around the 2017/8 bubble. A bunch of them were guys deep in the technical charts, timing the post-halving bubble to get out before the bear. He was the only one in the circle who bought and held. His wealth is obviously a lot larger than all theirs now. The ones he's still in contact with tell him they wish they'd done as he did.

Another guy I know got into crypto during the 2017 bull market. He felt fairly confident it was going to go up significantly from where it was. He was also looking at charts, watching podcasts, deep in analysis, etc. Unfortunately right after he got in, the market crashed. He ended up selling his position. Took a significant a loss. Bitcoin's now over 2.5x the price he paid for it then... but of course he wasn't trying to long-term invest, so he just lost money on it.

You can get a million stories like my friends' from reading the Bitcoin board on Reddit though. There are legions of guys there who've already been through multiple bull-bear cycles, halvings, dips, peaks, and so on. But it seems like your mind is set.

You're excited, and you feel like you've stumbled on a surefire way to outwit the market (the same one a lot of people stumble on).

Just wanted to share a word of caution here about overconfidence in one's ability to outsmart (or out-luck) the market.

There's a reason guys like Warren Buffett (who makes strategic long-term investments) are worth a lot more than any day trader you can name.

And there's a reason why the wealthiest guys who do do a lot of trading are all on Wall Street doing it with OPM, rather than their own (and getting wealthy off management fees, rather than by a cut of the profits they aim to make).

Chase
 

Rain

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tl;dr: ask yourself if you, as an amateur trader, are going to successfully outwit the market, and all the very, very smart people who do this for a living and have access to all the same charts that you do.
I did read all of what you wrote, we can come back to crypto later.
Just wanted to share a word of caution here about overconfidence in one's ability to outsmart (or out-luck) the market.

There's a reason guys like Warren Buffett (who makes strategic long-term investments) are worth a lot more than any day trader you can name.

And there's a reason why the wealthiest guys who do do a lot of trading are all on Wall Street doing it with OPM, rather than their own (and getting wealthy off management fees, rather than by a cut of the profits they aim to make).
I saw you go and like hey_lover post where he mentioned better to look at it from investor viewpoint not a trading viewpoint, or better get someone else to look after your money. Add to that the two posts I've quoted above by you.

Are you telling me I can't be a profitable forex trader, because I'm a 'retail' trader and not one of the hedge fund manager big boys or whatever you call them? Even if my trades last a few days to a few weeks, or some months I can't be profitable? To be clear, I'm talking about forex, not crypto.
 

Chase

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Are you telling me I can't be a profitable forex trader, because I'm a 'retail' trader and not one of the hedge fund manager big boys or whatever you call them? Even if my trades last a few days to a few weeks, or some months I can't be profitable? To be clear, I'm talking about forex, not crypto.

Yes. In all statistical likelihood.

Also, the big boys don't do so hot on the profits side of things themselves:


In 2007, Warren Buffett made a $1,000,000 bet with the hedge fund manager Protege Partners that the S&P 500 would perform better than a hand-picked selection of hedge funds.

The S&P 500 has returned 7.1% annually from 2008-2016, while the hedge funds have only returned 2.2%.

The only reason Wall Street investment banks make so much money is scams.

They have entire systems to manipulate stock prices by trading with each other in various ways and colluding on price movements.

Most of it is legal with the SEC, and any time any of it isn't, the penalty is a small fraction of the earnings they get from running the scam.

You can call it 'not a scam', because there's a bunch of technical mumbo-jumbo in how they're doing it, and a lot of it is too complicated for non-bankers to understand. But if you read through it and understand exactly what they are doing, then parse the motivations for why they are doing it, it is impossible to come away from it saying anything other than "This is just an outright scam, used to fleece both hapless corporations and clueless retail traders."

Read about how Wall Street tried to bankrupt Tesla to profit off the bankruptcy a few years back. Tesla was doing fine as a company, but Wall Street put it in mortal danger just to stack more paper. Elon Musk has hated the big banks ever since. There was no reason for Tesla to die, except that Tesla dying would've made some people a lot of money. They are doing stuff like this every day, to thousands of companies, and you, as a tiny retail investor, don't get a seat at that table.

The hedge funds don't do as well as the investment banks because they are run by people who are basically just stock pickers, with much smaller amounts of capital at their disposal, whereas the investment banks are entire huge entities able to throw their weight around in the market, and who largely work together, to push the market in directions they want.

The hedge funds are what you want to be, basically, except they fail to get a market-beating return with other people's money, instead of what you will be doing, where you will most likely fail to get a market-beating return with your own. Unlike you, the hedge fund managers get paid by fees they collect from their investors, even if they're losing to the market (as normally happens).

The trading ecosystem thus looks like this:

  1. Investment banks: top of the food chain. Can do almost anything they want to manipulate stock prices, with most of it legal, that which is not legal only incurring minimal fees, and if they wipe out, they U.S. government prints a bunch more money to give to them so they can go try again. They eat everyone lower on the trading totem pole for lunch.

  2. Hedge funds: middle of the food chain. They survive by feeding off the management fees, even as they produce overall lower returns than you'd get simply throwing all your money into an index fund. Simply by normal rules of distribution, a few hedge funds produce dazzling results over periods of up to a few years, meanwhile others produce heavy losses, but over enough time, they all follow the law of averages and return to a middle ground of returns (that is lower than the overall market). They lose money relative to the market because they're getting beat by the investment banks, but they still have resources for strategic investments, and are able to snack to some extent on the uninformed bets made by retail traders.

  3. Retail traders: bottom of the food chain. These guys all think they're going to outwit the market, somehow... somehow get information the big investors don't have, somehow read the trends better than the professionals. They never think about whom they're making money from if they make it; they don't realize the only way they get a profit in trading is if someone else who put money into the market loses it -- e.g., an investment bank, a hedge fund, or another retail trader. These guys are lunch for the hedge fund and i-bankers.
According to a 2013 study of the Taiwanese stock market led by economist Brad Barber of the University of California, Davis, Graduate School of Management, and encompassing everyday trade in that market over a 14-year period, less than 1 percent of all participant traders made a profit. Putting it another way, 99 percent of all day traders lost money.

And where does all that money the day traders / retail traders lose go?

To the i-bankers and, to a lesser extent, the hedge funds.

Again, retail trading is charity for the big boys. It is a nice way for regular people to very kindly share their money with banks and hedge funds, who are always appreciative of more donations.

If you really want to gamble, why not learn card counting and go hit up a casino?

Your odds are INFINITELY better doing things that way than trying to luck your way into the 1% of retail traders who ekes out a small positive return.

Nothing illegal about card counting, btw; the casinos only ban you once they figure out if you're doing it because it tips the odds in your favor instead of in theirs.

There is no such mechanism like this in trading -- unless of course you work for an investment bank.

Chase
 

Rain

Tool-Bearing Hominid
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If you really want to gamble, why not learn card counting and go hit up a casino?

Your odds are INFINITELY better doing things that way than trying to luck your way into the 1% of retail traders who ekes out a small positive return.
I've got a much better reply coming, but I want to make sure we're talking about the same thing. I mentioned forex. eg a currency trader a forex trader a retail forex trader. Trading currency like the EURUSD or GBPJPY or etc etc. These forex currency traders, their trades based on the daily timeframe chart and they hold them for days/weeks/months basing their trading on the daily timeframe and higher, and you think only 1% of forex/currency retail traders make money? eg your whole post above includes the retail forex traders that I've just described?

According to a 2013 study of the Taiwanese stock market led by economist Brad Barber of the University of California, Davis, Graduate School of Management, and encompassing everyday trade in that market over a 14-year period, less than 1 percent of all participant traders made a profit. Putting it another way, 99 percent of all day traders lost money.

And where does all that money the day traders / retail traders lose go?

When you say day trader, they're only holding it for a day or a few days at most. Does that study include the ones that hold for longer like I've mentioned? It appears not to.

Is that where you quoted, if not I'd like to see the actual study *only* if it is not talking about day traders and only if it talks about currency/forex traders. The website above with your quote, its talking about "day trader". Not a 'medium term hold for days/weeks/months' trader. It also talks about the entire stockmarket like the study I put below. Again, I am only talking about currency/forex traders and only 'medium term' holders not day traders.

This the study? It's 2017 and has Brad Barber one of the researchers and I've quick look


Do Day Traders Rationally Learn about Their AbilityAbstractWe analyze the performance of and learning by individual investors who engage in day trading in Taiwan from 1992 to 2006 and test the proposition that individual investors rationally speculate as day traders in order to learn whether they possess the superior trading ability.
So maybe that's what this 2017 paper is based on except it's more about learning and certain learners more likely to be profitable? Do some of the graphs show more than 1% are profitable? Well whatever, doesn't matter because I'm not talking about the stock market or 'day traders':

Two problems with that study.
We focus on day traders, those who buy and sell the same stock within a day, as these traders are almost surely speculators.
The study does not include traders that hold their trades for more than a day, like I've mentioned.
and

Using thecomplete transaction data for the Taiwan Stock Market over 15 years (1992 to 2006), we find evidence of learning among day trader
That is the entire Taiwan stockmarket. I don't think it includes forex/currency traders. Even if it did, if forex/currnecy win and the 'stock market guys' lose, you're lumping them in the same category.

My question is about currency/forex traders only and they hold their trades for a few days/weeks/months. eg not day traders[who close trades always in the same day or few days max] and not stock market stock exchange traders.

I've mentioned this multiple times but all I'm getting from you is stock market and day traders, not what I'm asking about.
 
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