Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
Happy 2017 to everyone, I think the next step is the 1050$ if it breaks i don't have any idea what would be the next stop of this rally, maybe some old bitcoiners have an idea 
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?I think that we need to look at the current ATH as the next stop and a potential resistance point...
There is considerable potential that the current ATH would not be a resistance point because we are already so close to it, but I think that we still need to see how this price range plays out between $1060 and $1180
Seems to be plausible, i'm very cautious because it's my first time as a bitcoiner as i experience a rally a these prices, so thanks for your thoughts
If you are nervous about retaining value with your BTC holdings, you can sell a little bit on the way up. Usually you do not want to sell too much because you could end up with a bunch of fiat and a lacking in BTC.
Everyone is different regarding how they will do it, but I tend to sell 1% to 2% of my BTC holdings every $100 price rise of BTC in about every $10 to $15 increments (in other words staggered in both directions - up and down), and then I buy back when BTC prices go back down... therefore, on average I end up selling less than 1% for every $100 (and my BTC holdings grow overall with the same amount of investment, more or less).
I started this selling strategy at a bit over $250 (but my selling between $250 and about $400 was an even smaller percentage of my BTC holdings because my BTC portfolio was then in the red) and today, I still have nearly 92% of my BTC holdings in BTC and the other 8% in fiat.
Some kind of a strategy of taking profits (even small amounts) can help you to be less nervous during BTC volatile periods (which are almost inevitable) but I think that even with extensive practice a lot of us get nervous no matter what when the price becomes really volatile (especially when it goes down), so we have to figure out ways to hedge and to safeguard some of our nervousness that are tailored to our own situations.
This is an excellent strategy, imho, because you actually profit from volatility. IOW, a volatile price rise from A to B will leave you richer than a steady rise from A to B. You (the investor) win, at the expense of the speculators.
It actually seems to play out like that in practice, too, as long as you stick to your guns and continue to stagger your bets in both directions.... It probably works at bringing down some of the overall volatility too, if everyone were to engage in such a practice.
If you assume price = constant + superimposed sinusoidal curve, with the amplitude of the curve big enough to trigger buying and selling, then by your method, you repeatedly buy low, sell high, over and over again. Which means you make money, assuming the spread and transaction costs are less than what you earn from buying low and selling high.
Any curve can be represented as a sum of sinusoidal curves, i.e. a Fourier series. Therefore, it becomes mathematically provable that your method, if properly implemented, will cause you to benefit from volatility.
I'm not clear about the math terminology, but I agree that a bot could be programmed with such methodology and overall be profitable, and I think that the profitability kind of assumes an overall upwards BTC price trajectory. If the price trajectory goes down overall, likely the losses would be less than if no such system were followed, but it would not necessarily be profitable if the longterm price trajectory ends up being downwards.
Without a bot, there is both a potential for human error and also human impulsivity and emotions to sometimes cause actions that are not quite fitting with complete logical and technical inputs - that can also include accounting for various behaviors of other traders and the news, etc. that may cause deviation from the model.
Maybe in the end, some of the human interventions can be minimized or averaged out so that they do not cause losses or gains that are outside of normal parameters? Everyone likes to believe that they can kind of beat market averages, but frequently that ability to beat is proven to be quite difficult to achieve. No matter what if a bot is not employed, there will tend to be a bit of human influence that can rise to a kind of gambling component that may or may not play out profitably.