Author Topic: Bitshares price discussion  (Read 887299 times)

0 Members and 1 Guest are viewing this topic.

Offline cylonmaker2053

  • Hero Member
  • *****
  • Posts: 1004
  • Saving the world one block at a time
    • View Profile
  • BitShares: cylonmaker2053

Offline cylonmaker2053

  • Hero Member
  • *****
  • Posts: 1004
  • Saving the world one block at a time
    • View Profile
  • BitShares: cylonmaker2053
Do you consider trends as part of technical analysis? 

I would say there is proof that prices trend and it's pretty obvious why, because for one, new information isn't absorbed/known to all market participants at once and takes a while to be assimilated.

https://books.google.co.uk/books?id=NwFw3p0pXtIC&pg=PA104&lpg=PA104&dq=richard+fARLEIGH+TREND+IS+YOUR+FRIEND&source=bl&ots=4sKTR_mRcu&sig=V3hPkQVubFzzVJzQ3J7wjHyWT74&hl=en&sa=X&ved=0CEwQ6AEwB2oVChMIr5elu6DnxgIVBccUCh1Q_gV1#v=onepage&q=richard%20fARLEIGH%20TREND%20IS%20YOUR%20FRIEND&f=false

Personally I prefer understanding and interpreting the information that makes prices move.

i also very much enjoy understanding prices, which is why i've been focusing on asset pricing so far. yes, trends do contain information and seem to affect prices as documented in Jagadeesh and Titman's 'momentum effect' ...there are some excellent papers proving it has existed in historical data and is now incorporated as a pricing factor in risk adjustment models. i'm not sure how momentum factor relates to TA, but that would be an interesting study.

Offline infovortice2013

  • Board Moderator
  • Hero Member
  • *****
  • Posts: 521
    • View Profile
    • BitShares en español
  • BitShares: traderx
this week 1650-1700k
New Keyoteeid: 5rUhuLCDWUA2FStkKVRTWYEqY1mZhwpfVdRmYEvMRFRD1bqYAL
new08/21 id 5Sjf3LMuYPSeNnjLYXmAoHj5Z6TPCmwmfXD6XwDmg27dwfQ

Offline Empirical1.2

  • Hero Member
  • *****
  • Posts: 1366
    • View Profile
We hit for the second times the new support at .00001727. This time with lower volumes the price went up so I guess there less seller pressure and we are about to see the price go up ?

Maybe it will go up and hit a the former support at .00002. Then we'll see if it can brake it with enough volume ...

I'm reading my very first book of charts technical analysis, I love it ! Any opinion on noob TA ?

i'm not a fan of TA as it's never proven actual predictive power. as far as we know, prices in the short run follow something close to a random walk ...if you ever generate a price chart from a random walk process you'll see that it'll look just like any stock or asset price movement; there'll be things that look like resistance levels, trends, trend breakouts, etc. but the fact that we created the charts from random walks should show that our human minds all too often find meaning in the meaningless :)
There are literally thousand of profitable traders , both long term and short term, that use nothing but technical analysis.  Most people who say technical analysis doesn't work have either never tried it or blew up their account because they lacked discipline. Technical analysis is 20% system and 80% risk management.  Nothing predicts market movements 100% of the time, but if you ride your winners and cut your losers short you stand a great chance to make a lot of money.

there being a set of people profiting on technical analysis for some period of time doesn't prove it works; we'd need more evidence to prove it's not in the noise of randomness or luck, and so far that evidence doesn't exist. TA strategies do not have a documented record of producing alpha, so use them at your own risk.

however, i do appreciate the risk management techniques ...

Do you consider trends as part of technical analysis? 

I would say there is proof that prices trend and it's pretty obvious why, because for one, new information isn't absorbed/known to all market participants at once and takes a while to be assimilated.

https://books.google.co.uk/books?id=NwFw3p0pXtIC&pg=PA104&lpg=PA104&dq=richard+fARLEIGH+TREND+IS+YOUR+FRIEND&source=bl&ots=4sKTR_mRcu&sig=V3hPkQVubFzzVJzQ3J7wjHyWT74&hl=en&sa=X&ved=0CEwQ6AEwB2oVChMIr5elu6DnxgIVBccUCh1Q_gV1#v=onepage&q=richard%20fARLEIGH%20TREND%20IS%20YOUR%20FRIEND&f=false

Personally I prefer understanding and interpreting the information that makes prices move.

If you want to take the island burn the boats

chryspano

  • Guest

Offline jsidhu

  • Hero Member
  • *****
  • Posts: 1335
    • View Profile
Im certain anyone talking smack has already dumped. Its phsycology. He just comes on hoping he didnt make bad decision howver since he sold as 0.02 hes already crying.
Hired by blockchain | Developer
delegate: dev.sidhujag

Tuck Fheman

  • Guest
Headline for Newmine's next post:

Bitshares devs to abandon Bitshares, work to make blockchain for some bank.

Dare me?

lol please do, i'll be waiting to pick up some BTS on the dump :)

I don't think weak hands can survive these depths, but I don't mind if Newmine tries to find a few. ;)

Offline cylonmaker2053

  • Hero Member
  • *****
  • Posts: 1004
  • Saving the world one block at a time
    • View Profile
  • BitShares: cylonmaker2053
Headline for Newmine's next post:

Bitshares devs to abandon Bitshares, work to make blockchain for some bank.

Dare me?

lol please do, i'll be waiting to pick up some BTS on the dump :)

Offline cylonmaker2053

  • Hero Member
  • *****
  • Posts: 1004
  • Saving the world one block at a time
    • View Profile
  • BitShares: cylonmaker2053
If enough people believe in TA then the more likely it will look right. The more money chasing an outcome can make that outcome come true. It like being in crowd, the more people push in one direction the more likely everyone will move that direction. Plus you have a 1 in 360 chance of being right anyway. (360 degree in circle).

yeah maybe there is some element of self-fulfilling prophecy with trading...that's at least true of the momentum effect, a proven return factor at least in the short-intermediate term.

Offline cylonmaker2053

  • Hero Member
  • *****
  • Posts: 1004
  • Saving the world one block at a time
    • View Profile
  • BitShares: cylonmaker2053
Like you suggest, your brain is wired to sabotage you every step of the way, and it won't ever stop trying to find patterns and giving gut feelings etc.  If you can't separate your emotional dreaming from a clear rigorously defined method... you will likely fail.

well said  +5%

Offline NewMine

  • Hero Member
  • *****
  • Posts: 552
    • View Profile
Headline for Newmine's next post:

Bitshares devs to abandon Bitshares, work to make blockchain for some bank.

Dare me?

Xeldal

  • Guest

there are actually scientific methods to prove something and that's what Finance is all about. don't let me being a student give you a sense of superiority; i'm going back for my PhD later in my career, so most of my life hasn't been spent in academia. however, my background is irrelevant for arguing a point. just look at a random walk generated price chart and there's no way you'll be able to differentiate it from a stock chart. you can draw out all the TA techniques you'll like on that random walk chart, but it wouldn't change the fact that there are no hidden mechanisms to exploit, just randomness.

for all the persistently successful TA traders there are likely many more who failed. if you took a large population and set them to trading you'll find some subset every period who were successful. advance another period and there'd be some subset of that subset who were successful. repeat for n periods and you're still going to naturally find a smaller subset of successful traders. at the end it'll look like the remaining few are gifted, but no matter how you slice it you would have had a small set of winners at the end of any random process.

Your walking chart example is not really relevant.  Markets are not random. Price and volume are not random.  You'd be a fool to try and trade something knowing it was not based on anything but a RNG.  TA applies to real, human traded value based instruments. 

Actually TA would probably still apply to this Random walk scenario.  You'd see that its volume was very poor, like a penny stock, and therefore there would be no reliable way to apply TA.  The edge you get from TA is very small, so ideally you'd be trading things with massive trading volume that would not be subject to random interests, blown by the wind.

A good TA trader is also not stuck in a vacuum.  Its important to follow some basic news.  For example if you know that some event like quarterly earnings reports or FOMC minutes are being release, these events are a spike in randomness and TA goes out the window.  Its best not to trade these events from a purely TA perspective.  but with proper risk management they are not such a big deal either, and will even out over the long term.

hey maybe there is something there wrt signaling and taking advantage of those signals. there's nothing in asset pricing theory, at least, that suggests TA has merit, but there's a lot we don't understand about the world yet. i just wanted to advise caution is all as there are plenty of charlatans out there selling trading strategies that don't hold up to the promises they make.

of course stock prices aren't products of RNGs, i just brought that example up to show that people often find patterns in noise bc our brains are wired to pick out patterns.

Absolutely, and caution is well advised. : ) Anyone looking to actually make a career out of trading should expect to lose their ass at least a couple times before the importance of risk management sinks in.  No amount of reading/studying can prepare you for the emotional turmoil of both a losing and winning trade.  Time in the seat is the best education you can get, and even with that, most are simply not cut out for it.  You'll be certain of which you are after some time, if you still have any money left.   trading(specifically day trading) is not about hitting home runs, its not even about getting on base.  Its about following a highly disciplined art of making contact with the ball at least 51% of the time. 

Like you suggest, your brain is wired to sabotage you every step of the way, and it won't ever stop trying to find patterns and giving gut feelings etc.  If you can't separate your emotional dreaming from a clear rigorously defined method... you will likely fail.


Offline Pheonike

If enough people believe in TA then the more likely it will look right. The more money chasing an outcome can make that outcome come true. It like being in crowd, the more people push in one direction the more likely everyone will move that direction. Plus you have a 1 in 360 chance of being right anyway. (360 degree in circle).
« Last Edit: July 18, 2015, 06:05:24 pm by Pheonike »

Offline cylonmaker2053

  • Hero Member
  • *****
  • Posts: 1004
  • Saving the world one block at a time
    • View Profile
  • BitShares: cylonmaker2053

there are actually scientific methods to prove something and that's what Finance is all about. don't let me being a student give you a sense of superiority; i'm going back for my PhD later in my career, so most of my life hasn't been spent in academia. however, my background is irrelevant for arguing a point. just look at a random walk generated price chart and there's no way you'll be able to differentiate it from a stock chart. you can draw out all the TA techniques you'll like on that random walk chart, but it wouldn't change the fact that there are no hidden mechanisms to exploit, just randomness.

for all the persistently successful TA traders there are likely many more who failed. if you took a large population and set them to trading you'll find some subset every period who were successful. advance another period and there'd be some subset of that subset who were successful. repeat for n periods and you're still going to naturally find a smaller subset of successful traders. at the end it'll look like the remaining few are gifted, but no matter how you slice it you would have had a small set of winners at the end of any random process.

Your walking chart example is not really relevant.  Markets are not random. Price and volume are not random.  You'd be a fool to try and trade something knowing it was not based on anything but a RNG.  TA applies to real, human traded value based instruments. 

Actually TA would probably still apply to this Random walk scenario.  You'd see that its volume was very poor, like a penny stock, and therefore there would be no reliable way to apply TA.  The edge you get from TA is very small, so ideally you'd be trading things with massive trading volume that would not be subject to random interests, blown by the wind.

A good TA trader is also not stuck in a vacuum.  Its important to follow some basic news.  For example if you know that some event like quarterly earnings reports or FOMC minutes are being release, these events are a spike in randomness and TA goes out the window.  Its best not to trade these events from a purely TA perspective.  but with proper risk management they are not such a big deal either, and will even out over the long term.

hey maybe there is something there wrt signaling and taking advantage of those signals. there's nothing in asset pricing theory, at least, that suggests TA has merit, but there's a lot we don't understand about the world yet. i just wanted to advise caution is all as there are plenty of charlatans out there selling trading strategies that don't hold up to the promises they make.

of course stock prices aren't products of RNGs, i just brought that example up to show that people often find patterns in noise bc our brains are wired to pick out patterns.

Offline cylonmaker2053

  • Hero Member
  • *****
  • Posts: 1004
  • Saving the world one block at a time
    • View Profile
  • BitShares: cylonmaker2053
banks and hedge funds employ traders that use nothing but technical analysis.  Some bank trading departments Lose money 1 or 2 days out of the entire year.  I don't know how much more evidence you need to see that TA does work.

The only certainty in life is death, and of course there are going to be people who are not successful. That is the case with every profession.  Maybe our ideas of TA are different, but price movements are based on human emotions of fear and greed.  There has been vast amount of research done using Fibonacci and its ability to predict price movements.  Elliot wave is another concept that has been used to accurately predict future prices.  The key is to use these techniques along with risk management to be profitable.

Let's say I think stock xyz is going to hold $10 support level.  I would set a buy order at $10 with a stop loss at 9 dollars and a take profit at 12-13 dollars.  I would risk 1% of my account on this trade. If I'm wrong I lose 1%, if I'm right I make 2-3%.  I only have to be right somewhere around 40% of the time in order to make money. I would have to be wrong something like 300 times straight in order to blow up my account.

fair enough, i haven't studied TA enough to really weigh in one way or another, other than the basics i've presented about there being insufficient evidence to suggest alpha. i've only read a few TA books over a decade ago and seen a tiny bit of asset pricing theory reference to the subject...certainly not enough to be adamant against it, just skeptical.

real people putting their money where their mouth is, like you said with hedge funds and IBs employing TA traders, suggests there might be something there, so i'm not completely ruling it out.