Post
Topic
Board Bitcoin Discussion
Re: Settle down
by
xtapol
on 12/06/2011, 01:42:12 UTC
But while we're on the subject, Bitcoin is a terrible market for short-term trading. Low-volume markets are nasty, and you're likely to lose your shirt.

I disagree.  There is plenty of volatility, and trading can turn volatility into profit.  Low volume is only a problem if the volume is low relative to your trading capital and frequency of trading.  People have suggested dollar-cost averaging and buying the dips... that's already half a trading strategy.  Use the corresponding techniques on the sell side and you're a trader.   

We should be encouraging traders, as they will provide liquidity and smooth out some of the volatility.  Exactly what the bitcoin economy needs.

If you're a seasoned trader, you love wild swings (although they're a lot harder to deal with without derivatives). If you're an average trader, or one of these people panicking now who know *zero* about trading, this is not the environment for you. Low volume is not just a problem because it limits your moves, it's a problem because higher liquidity means saner markets.

As to the rest of your comment, I agree - absolutely we need more traders. I'm just not willing to accept the level of risk that comes with *being* one of those traders right now, and I think most people here shouldn't either.