Quote from: JorgeStolfi on March 01, 2015, 03:32:52 PM

Quote from: billyjoeallen on March 01, 2015, 11:02:36 AM

Quote from: JorgeStolfi on March 01, 2015, 10:44:01 AM

Quote from: molecular on March 01, 2015, 10:36:24 AM

You're forgetting the large group of people who do not think about Bitcoin price at all.

You mean, those who will buy bitcoin for ideological reasons, at any price? They must all have all run out of money, because they are not buying for 255$, either.

I have a tradeable balance of $35,000. I'm not out money or even close. That doesn't even count fiat I have in my bank account. I'm just waiting for a little bit of retracement to maximally punish any weekend dumpers.

You are looking to gain more by short-term trading, profiting from short-term variations of the price. That is not a rational strategy, since the expected gain of that activity is slightly negative. Some traders may make a profit, but some will lose money, and the average gain of all traders (compared to the long-term expected gain) will be negative.

If your expectation of the price increase over the next few years is more than the expected increase in value of other possible investments, then the best strategy is basically invest all your disposable money as soon as you can, and hold until you want to spend your profit.

Otherwise, the best strategy is not to invest at all.

Short-term speculation makes sense only if you believe that there is some key attribute -- knowledge, skill, luck, courage, determination, intelligence, reaction speed -- that increases one's expected profit at day trading, and that you have more of that thing than the average speculative trader out there.

Indeed, it seems that the only reason why day-trading exists is that most people think that they are better than average in that regard. Which is not likely, since the traders that are dumber than you will go broke and drop out before you do, while the super-traders with robots and privileged information, who are surely better at the game than you, will hang around to the end and will probably take your money before you can take theirs. (You may have noticed the absence lately of several posters who apparently enjoyed eating dog food in order to pay for Risto's cigars and for KnC's global warming plants.)

If you accept that you are no better that the average day-trader, and you have a positive expectation for the price in the long run, short-term trading will give less expected profit than just buy and hold -- because you will not profit from the end-to-end trend during those times when you are holding dollars. For example, if you expect a 20% valuation over 3 years, but you keep 50% dollars and 50% BTC, on the average, over that time frame, then your expected profit will be only 10%.

A similar conclusion holds if you have a negative expectation for the price in the long term: day-trading is a bad idea, because you are expected to lose money while you are holding BTC. If you expect the price to drop 20% over the next 3 years, then, by day-trading with a 50% BTC average position, you will have a 10% expected loss. Whereas, if you don't invest at all, your loss will be 0%.

Agree 100% about trying to trade, this has been my experience.