Also Goomboo, the question which is probably on the tip of a few tongues right now. Pure skepticism -- I'd like to ignore it, but curiosity has the better of me. Although you instructed people not to use your 10/21 forumla, its almost impossible to expect anyone would not use it (Diffusion of responsibilty). If someone (such as youself) had a hunch that a bunch of people would be working explcitly with the 10/21 system, is there a way that you could use a counter-measure to make extra profits from this manipulation of the trend?
(this question is asked with much respect by the way).
(this question is asked with much respect by the way).
That's what I meant when I said this isn't going to work for long.
So if you will short when there is a crossover (and many ppl do this). This creates a extra downward momentum so the way to make a profit from this is to also sort yourself. So in a way if many ppl use it. Don't really see how you could make extra profit of this. If the market goes up again there is a new crossover so you if you this system, you will sell your shorts and go long.
(I'm not an expert just a enthusiastic noob.
)Right, until enough people do this, then when there's a crossover I watch everybody short, I put a few thousand in bitcoinica on 10:1 margin and squeeze everyone out.
Good point. But most important thing is not working met a big leverage. Because of the way it works on bitcoinica, the risk is to high. To protect you from this it would be quite easy. If your short on 6.5 just set a stop order on 6.7. This way you liquidate your position when the market turns against your position. This of course will lose you money. But it also protects it.
I was also wondering about the values to use for the moving leverages. Maybe the gap between the everages should be variable compared to the margins between the sell and buy price. (Because this is a direct loss your taking when selling/buying fast on bitcoinica). So if the sell/buy price is 6.13/6.25 the margin is 0.12 you should be using something like 10/22 for the moving averages.
Totaly not sure about this but it seems if theire is a great gap between buy/sell, the higher difference in your 'moving avarages' lines will only make you jump sides when it is clearly time to switch. (You need to be sure because a change of direction 'cost' more money)
On the other hand when there is almost no margin you can switch possibly cheap so your should switch faster to maximize profits.
This is just a theory but seems logical in a way to me.
edit: your avatar is exactly the face i'm making while writing this.
edit2: Or maybe divide the margin by 2 and make this the difference between the moving averages
