What does 1% edge 3900 BTC mean? What's the difference between that line and just the 1% edge line. Is that the 4k Ceeste mishap?
In other words, we can expect to follow the 1% edge 3900 BTC line from here on out?
That's a minus sign: 1% minus 3900. We seem to be sticking to that line, and we are expected to do so.
It keeps coming up on the site chat. Most people think that we should get back to the red 1% line, but I disagree. Once you're off the expected line by X BTC, you expect to stay off it by X BTC. In our case X=3900 BTC.
That's not to say we won't have a whale come and lose 3900 BTC more than expected to us tonight and put us back on the red line. But it's just as likely he'll win 3900 BTC more than expected and take us even further below the red line.
If anyone can give a convincing argument as to why that's true I'd appreciate it, because I'm never able to convince the chatters that it's the case. "But the law of law numbers says we'll get back to 1%". "Yes, we expect to get back arbitrarily close to 1%, but we also expect to stay 3900 BTC below it. (X-3900)/X tends to 1 as X tends to infinity". And on it goes...
The basic fallacy here is... the gambler's fallacy. Past results have no effect on the future. Investors expect to get 1% of all
bets. Getting back to the red line would require more than 1% of future bets, and that's not more likely just because of past losses.