Quote from: arepo on May 01, 2013, 07:10:15 AM

i see that. there's been a whole lot of questionable price action on gox these days....

i'm starting to regret so many people knowing about bitcoin -- it always attracts the worst first Tongue

lag >7 min now, most definitely directly because of this.

Quote from: arepo on May 01, 2013, 06:36:43 AM

Quote from: farfiman on May 01, 2013, 06:30:13 AM

You can try to predict the actions of the masses with some success but not the action of 1 or 2 people and that's all it takes to move things considerably in this market.

again, the basis of my argument against the perceived 'absolute power' or manipulators, or even just traders with large amounts of capital proportional to the market cap, is that the self-regulating nature of the market makes direct price manipulation proportionally expensive to its magnitude.

this being said, it shouldn't necessarily "break" the various methods of TA. for instance, it's interesting that the large move was timed perfectly with the triangle consolidation. these moves are more predictable than you think.

Does it not seem like certain tactics, unpredictable from a TA framework, which we may call price manipulation:

1: Can allow a trader to incite movement with disproportional effect relative to the cause.
2: Will tend to play out in a predictable direction. (To the manipulator, yet unpredictable from TA),
3: Can be executed / set in motion at a specific and particularly suitable time. (Known to the manipulator, unknowable* to the market at large).
4: Results in changing market conditions which impact the data relevant to technical analysis, often invalidating previous analysis.
5: Plays out in a such a manner that post-fact analysis will "agree" with the manipulator, especially after the rest of the market has started chasing the manipulator**, causing players*** to agree with and, react to the movement of the manipulator, joining the manipulator in the same direction as the initial movement.****

6: That this can cause the cost of initiating the tactic (which might otherwise be prohibitive) to be greatly discounted by knock-on effects of some market participants "piling on" to an initial movement, joining the manipulator which predictably (how predictable?) leads to a cascade/amplification effect.
7: That such a cascade/amplification effect brings the cost of manipulation down, and adds to the reward of manipulation.
8: That such a cascade/amplification effect tends to benefit "the leader", but comes at a cost to "the followers."
9: That initial followers of the "manipulator" stands to benefit, "ahead of the pack" followers benefit some, "average" followers benefit none, and "later than average" followers being hurt.
10: That knowledge of such an effect can prime the market, creating further incentive to be among the initial followers, amplyfying cascade effect, if similar events were to reoccur.

11: That all of the above is consistent with a notion of "rational" manipulation tactics (and a small number of rational initial "followers".)
12: And also, a greater number of irrational "lemmings", giving chase to their disadvantage.
13: That since TA is a delayed reaction (immediate changes taking time to propagate into the data) The technical analysts, as well as those that follow them, are at greater risk of ending up among the "lemmings" if and when such events do in fact occur.

Note: This picture assumes a single manipulator entity, which is unlikely in practice, or if it were so, is unlikely to be stable, since other agents will pick up on and try to emulate any successful tactic, which creates competition between would-be-manipulators, which complitates the course of events for everyone, and should perhaps be anticipated to lead to a reversion to normality as the market matures. However, there would be windows and moments of time where manipulation tactics remain profitable.

This currently seems to be the case. If and when manipulation tactics seize to be profitable (to the manipulators and the early followers),
or those who would be lemmings recognize that they missed their window, and are being lead to jump up a cliff,
we predict that such manipulation tactics should be diminished in effect and frequency, or stop all-together.

* Unknowable in the details. General features can be anticipated, <> A discussion of this point could be worthwhile.
** Which they should, as can be argued. (So long as they are quick enough to be among the first to respond.)
*** Humans, bots, algorithms, technical analysis -- as well as the heuristics on which all of those rely to make BUY/SELL/NO ACTION decisions.)
**** Initially, at the start of the motion, first wave of re-action is almost always in the same direction as the initiating action,
however, if the attempt is partially or wholly unsuccessful, things get... complicated.

Quote from: arepo on May 01, 2013, 04:46:52 AM

yes, i was watching, and it was clear that the dump was a single or a few entities, not an emergent movement. there's a lot of bearish news in the air, and the market is short-term overbought. i'm trying to determine if we should expect $120 to hold, or if we're gearing up for a correction-to-the-correction of the bullish move to $165. i highly suspect these individuals were attempting to 'paint the tape', as a very bullish consolidation turned very suddenly into a very bearish picture. this event will be good to consider in another problem i'm working on, can/does price manipulation break standard methods of TA?.

Thoughts?