Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
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'd like to see that proof 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.
A couple of problems I see with it:
1) you are talking about piecewise sinusoids (right? reset at each sudden price change?). That complicates any kind of frequency domain analysis. Lots of noise.
2) After a price change, how do you determine what phase (and amplitude) to start the next piece at?
If you really did mean fourier analysis of the whole price data, then you would see low frequency cycles with a bit of luck (but too many people already found those, so they're tiny). The sudden price moves add way too much noise to be able to detect anything sinusoidal at day trader frequencies.
I trade much higher frequency and thrive on the volatility.. I'd say usually 20-100 trades per active trading hour..
I determine where to start the next position 90% based on what is happening in the books..
The books are constantly changing, so I need to get into the rythem of the certin exchange, stare at the books for 10 minutes or so to get a feel for the waves, enter positions when you see the waves in the books coming to push the price buoy back and forth..
I have found on huobi and ok that their are a lot of book "setups" where they try to make you think one thing and then they do the exact opposite..
Like they will put up a sellwall and buy into it themselves right before they dump, you think it's going through the wall and then WHAM they slam it when everyone is buying..
I flip tons of small price movements and try to stay away from longer term "swing" style trading unless the pattern is painfully obvious.. Like last night I went to sleep at abot 4X margin long and was happy this morning.. Made another 10% today in my morning routine trading for the first couple hours when I wake up.. I wake up staring at the books until I see something I have to have and then it's on..
Also, when I say profits I mean increasing my BTC stash, I could give a crap how much of an alt or fiat I can make but rather just focus on making more BTC..