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In Bitcoin We Trust


Discussion in Cryptocurrencies

Updated January 8th 2018 by CenFlo
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In Bitcoin We Trust

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  #1 (permalink)
Portland, OR
 
Experience: Beginner
Platform: Sierra Chart
Trading: Bitcoin
 
Posts: 57 since May 2013
Thanks: 30 given, 42 received

In Bitcoin We Trust

I have been lurking on the boards for a couple years. I decided to create a Bitcoin journal to document my experiment.

Disclaimer:
Bitcoin is incredibly volatile, you should not invest any money(s) you aren't prepared to lose. Before I converted anything, I prepared myself mentally for BTC to go to 0. On top of this, given it's nature you open yourself up to a very real risk of exchanges being shut down, your wallet being stolen, data corruption, service outages (DDOS), governmental regulation etc. At this premature stage it is quite literally the wild wild west.


That being said, the concept of a Cryptocurrency speaks to me personally, and I can't help but be a part of it. I will do my best to include resources, but please ask any questions you may have.

I swing trade my Bitcoin, on a 60m timeframe. I have a full time job, and can't handle much more than that. Given the current market conditions and my experiences thus far, I primarily read context using some Price action concepts channels, S&R. I don't feel bar by bar analysis is holding to conventional behavior in such an illiquid market just yet.

I also use a 10 and 21 bar ema as it is prevalent metric among Bitcoin traders, even defaulted on the popular charting site bitcoin.clarkmoody.com.

I use Sierra Chart for charting, as they are the only renowned platforms that have implemented the mt.gox feed natively, and soon trading!

This journal will be fairly boring, as Bitcoin's swings are large and span multiple days, i'll do my best to keep it updated with any fundamental events.

Here are a few resources if you aren't familiar with Cryptocurrency or Bitcoin.





https://en.bitcoin.it/wiki/Myths
https://en.bitcoin.it/wiki/FAQ
https://en.bitcoin.it/wiki/Trade

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  #3 (permalink)
Portland, OR
 
Experience: Beginner
Platform: Sierra Chart
Trading: Bitcoin
 
Posts: 57 since May 2013
Thanks: 30 given, 42 received


So, where are we today?

I reference the daily chart frequently. The prevailing trend from February has been supporting each crash, it is an important reference point.




Here is my 60m chart, I sold my previous long with at 139 earlier this week. This morning I re-entered at 106, my Bitcoin alarm actually woke me up . I should note that I don't currently hold funds on mt.gox, the exchange im currently at is quoting a +$2 premium from gox. Also, shorting is not currently an option in most of the exchanges, but it is coming soon.


I'll hold this long until I see a major cross of the trend line and emas. I expect the channel to expand with more volatility, probably closer to Monday.

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  #4 (permalink)
Portland, OR
 
Experience: Beginner
Platform: Sierra Chart
Trading: Bitcoin
 
Posts: 57 since May 2013
Thanks: 30 given, 42 received

It has long been speculated that China will cause the next boon to Bitcoin (see Q coin), today a huge step was made with the BTC documentary that ran on state censored CCTV, here is a good analysis:

I'm a Chinese born US citizen, here's what I thought of the CCTV BTC Documentary : Bitcoin

This week downloads for the official BTC wallet from China dwarfed USA:
Download Statistics: All Files

I added a good article explaining China's virtual currency past.
http://qz.com/74137/six-reasons-why-chinese-people-will-drive-the-next-bull-market-in-bitcoin/

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  #5 (permalink)
Portland, OR
 
Experience: Beginner
Platform: Sierra Chart
Trading: Bitcoin
 
Posts: 57 since May 2013
Thanks: 30 given, 42 received

Securities

Trading the pair isn't the only way I invest in Bitcoin. I also purchased some shares of ASICMINER at ~0.8 a couple weeks ago https://btct.co/security/ASICMINER-PT.

Investing in BTC securities adds another layer of risk, that is likely outside the tolerance of most. I actually am beginning to divert some of my holding into my trading funds, as they begin to outperform.

If you want to read about ASICMINER https://bitcointalk.org/index.php?topic=99497.0, a Bitcoin mining company that builds their own ASIC hardware to stay competitive. They have just recently begun reselling this hardware to consumers via auctions, raking in a premium.

The journal will primarily be talking about the BTC/USD, but if you have any questions on alternative investment routes I will do my best. Again, this is all extremely risky but I think it would be fruitful for most to follow the evolution of Cryptocurrencies.

[EDIT] I want to clarify the whole mining aspect of Bitcoin, as it is routinely misreported. The process of mining is actually a dual purpose function that verifys each transaction block adding to the network ledger, the electrical cost to run these machines is far from an "environmental disaster".

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  #6 (permalink)
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I have a BS in computer science from a US News top-40 engineering school and had to endure Turing machines and assembly code, and wrote many thousands of lines of C (and still do--it's my favorite language). I had the very first Pentium, the 60MHz (you know, the one with the FP bug that Intel tried to cover up), and was using computers from when I was a kid, building them from parts for a small profit for friends and teachers at school. I had to explain the usefulness of the whole "internet" thing back in the early 90s to my grandparents, who, until they died, still did not understand what ".com" meant, no matter how simply I explained it. I was fortunate to connect at 9600 with my free local public library, when we had those devices that would dial up and make that awful sound.

So, with all of this "tech" background, and being a pretty early adopter of technology, why the f*** does BitCoin make me feel like I'm 80 years old and still living in the age of black and white television? What is it that scares me s***less about an invented currency that has no central bank? I have done all online banking for years, and have not had a land line since 1999. I deposit all checks through my phone, and do not even go to the bank anymore. I am "cool" and "tech savvy," but I watch your bitcoin video and feel like I just missed the last 5 years of the world or something. Mt. Gox? The Dark Web? Tor? The Silk Road? MintChip? WTF?

In all seriousness, I do find it cool. Very cool. I have a question for you, and the answer is probably very obvious. Since there are a max of about 21 million bitcoins, what is the expectation for this currency in the future, seeing as how there are 6 billion people alive? Is it not intended to become much larger than a novelty?

Good luck with this by the way, I wish you well!!

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  #7 (permalink)
Portland, OR
 
Experience: Beginner
Platform: Sierra Chart
Trading: Bitcoin
 
Posts: 57 since May 2013
Thanks: 30 given, 42 received

Bitcoin can be denominated to 8 decminal places, and more if the development community feels the need. we are already started to standardize some of the verbage for the future like milibtc or mbtc, but that is ongoing.

This is one of the reasons why I think it will be a great trading vehicle, you can decide precisely how large of a position you want. As well as other reasons like the very low commissions https://mtgox.com/fee-schedule and my favorite, the data feeds are free and available to all. No stupid CME fees and such, probably why my Bitcoin only package with Sierra is $10.

It has taking me.....many many hours to understand enough to place a modest amount of capital at risk. It's not quite ready for mass adoption as the learning curve is steep, but a lot of start ups are working on this with hardware wallets and the like. Hopefully I answered your questions, feel free to ask away, I will do my best but am still a novice in both Bitcoin and trading.

[edit] I forgot to add that after the max 21 mil have been mined, there is still an incentive to the miners to continue validating blocks through transaction costs, however I believe it isn't until around 2150 that all Bitcoin will be mined. On the subject of transaction costs, in your wallet client you can actually choose how much you want to pay from 0 fee to whatever you want, the higher the fee you pay the quicker your transaction will be validated by the miners.

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  #8 (permalink)
Portland, OR
 
Experience: Beginner
Platform: Sierra Chart
Trading: Bitcoin
 
Posts: 57 since May 2013
Thanks: 30 given, 42 received

On a somewhat related note. One of the techniques the DDOSers had used on Mt.Gox the the past several weeks is to spam their trading engine with 0.001 size trades, demonstrating the granularity of business the exchanges are willing to accept. Filtering out the nefarious trades is another matter, which they are beginning to solve...although I am still very anti-gox, they have shown to be technologically incompetent. But there are exchanges coming out that I am excited for.

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  #9 (permalink)
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  #10 (permalink)
Portland, OR
 
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Thanks Mike. I was just wondering how to do that.

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