Post
Topic
Board Speculation
Re: I have made a 25% return this week trading *against* the pirate
by
ArticMine
on 23/07/2012, 23:37:21 UTC
how does pirate make money if he buys high and sells low Huh
Buying high pushes the price extremely high, allowing someone who can corner the market to profit by selling. Selling low pushes the price extremely low, allowing someone who can corner the market to profit by buying. If you're the one doing the high buying and low selling, you know when it's going to start and when it's going to stop, allowing you to time your trades until after the walls re-appear. Some lucky and/or wise counterparty recognizing this happening can both profit during the buy up or sell down (when you're buying high and selling low) by taking your trades and they can also profit during the buy low and sell high phases by taking the trades of the walls that other people put up.

No. His strategy is to sell high and then buy low. The reason he may end up selling low and then buying high is because selling high and then buying low is a bear market strategy that does not work in a bull market.

How do you know his strategy?

Because he is paying a premium 7% a week to borrow BTC rather than say 2% a year to borrow USD. So it is pretty obvious we are talking about a bear rather than a bull here.