Trading strategy

Okay, I have started trading on an exchange. Here is my intended strategy

i) I have chosen two cryptos, both of which I want. I want PPC, and I am also happy to have BTC, so that’s my pair

ii) I have got out of thinking of the dollar price, and think only in terms of the PPC/BTC rate

iii) Assuming I bought some PPC at, say, 0.0022 BTC, I create a sell order for 10% more (i.e. 0.0024)

iv) Sooner or later, they sell and I get the BTC equivalent. I then use the BTC to set a buy order for PPC, but at a price that is 10% lower (back at 0.0022)

v) I repeat this process, back and forth. Basing buy and sell orders on an expectation of 10% price swings is realistic, and exceeds the percentage commission extracted by the exchange for each sale. Since I want both PPC and BTC, I am always happy with the outcome of the trade

vi) From time to time, I will draw off some peercoins and/or a fraction of a BTC to my client or paper wallet, to preserve a modest but growing profit

The risks I perceive are the exchange imploding, or my account getting hacked. But I don’t see any risk in the trading strategy, itself

Any comments or suggestions on how I can improve this scheme? It seems foolproof, which makes me wonder whether I have overlooked anything

First: I think there is a flaw in your logic because the notion of a base currency has been discarded. To see this, substitute GOOG-USD for your PPC-BTC trading pair. GOOG is volatile while USD is stable, so the obvious goal is to trade them in an attempt to exploit the volatility of GOOG relative to the USD (buy low, sell high). When you trade between two things you want, all you are doing is re-allocating risk capital. Neither PPC or BTC represents a stable base for trading. The reason you “want” both is because you expect both of them to appreciate relative to a base currency like the USD. If BTC, PPC, or both were to collapse relative to the USD, separate allocations only determines the degree to which your capital gets depleted.

Second: If you take either BTC or PPC as your base currency, there is no guarantee that the cyclical price behaviour you assume in v) will continue. Traders are always looking for such repetitive patterns in stocks, commodities, etc, but rarely have this work over the long-term.

yes, what he said.

i would include NBT as nbtppc and btcppc are way more volatile than just ppcbtc. Also because alts move in sync with btc (usually, or as pillow noted, first btc up then alt up)

Hi Robert,

You’re using a range-based trading strategy that works well in sideways-moving markets, where the price stays relatively consistent. Unfortunately, it performs poorly in both upward-moving and downward-moving markets.

If the market jumps up and continues to climb, you would miss out on nearly all the gains. If the market drops and continues to fall, you would participate in nearly all the losses. Try looking at historical price charts, and mentally apply your strategy to them over the long run. I hope these examples help you to see the potential weakness in such a strategy.

I’m sure Pillow may have another opinion, but it’s my thought that, unless you’re using sophisticated automated trading software and have a lot of experience, you won’t improve your average return with active trading than with passive (one or two trades per 3+ months) trading. You’ll simply end up paying more in fees. In the end, active trading is a negative-sum game: you can only make money at the expense of other traders, and that after paying trading fees. It stands to reason that most active traders will damage their earning potential with this activity.

Chronos is correct. If you feel like being an active market participant, why not average into positions of your favourite cryptos? Make small purchases when you have some discretionary fiat funds available and slowly build up your holdings. In this way, you’ll have a better chance of buying something – even a small amount – at prices close to the low. You won’t feel as compelled to try to time the market, which is almost always a losing proposition.

Like they said… you are currently participating to the PPC/BTC ratio downtrend. Your strategy is working for now because the PPC/BTC ratio has a predictable and constant downtrend. But sooner or later people will find PPC price very affordable and the pump will be brutal.

Lot of people are currently holding PPC, most of them are minting with them. The coins that you see on the market that are being traded are mainly from bots and miners (miners are dumping PPC for BTC, this is why there is the PPC/BTC downtrend).

Your strategy works on the short term. But, I wouldn’t risk my PPC now, the price is very low and it can pump hard at anytime. There is no reason for people to dump PPC now at such a low price, so the chance that you see something like a 200K PPC drop or sell wall is very low.

Also, be careful about Nubits Dividends, 100BTC worth of PPC are going to be bought in a few days (normally before the 21st https://gist.github.com/KiaraTamm/ffd7e5d891ec08955001). Have a look at the order book and check how high it can go… As soon as volume is back people are going to put buy walls and if you are in BTC you’ll be lost (meaning that you’ll loose most of your PPC). Then you’ll buy PPC again at a higher price, but then it will drop, so you’ll loose BTC because you’ll sell, etc. :slight_smile:

Robert, see whifmoi’s contrarian trading lesson and discussion http://www.peercointalk.org/index.php?topic=528.0

When price is range bound (some call it consolidating) or if volatility is usually within your%, you will profit from this strategy. If PPCBTC trends down, fast enough to outpace your switching strategy between assets, you will only buy peercoins ONE time (because iii. says that you have to have bought peercoins to make the swtich). Your loss in terms of BTC will be limited, but you will have to invent a new strategy. It’s likely that you would decide to disregard rule iii. and try the strategy again, i.e. buying peercoins when ration goes down another 10%. If trends keeps on going down and you keep disregarding rule iii. you will in the end have a lot of peercoins but no BTC.

As long as you follow all of the rules, you are likely to make profit until the day volatility whipsaws and break your strategy. The question is then, will you have the discipline to never execute the strategy again? If you do execute the strategy again, you will have broken rule iii. If you break rule iii. you are not following the strategy, hence you trade without a strategy.

The strategy you are using is a pretty common one for people trading gold x silver. What they do is that they look at the historical ratio and identifies when price of silver in terms of gold is historically high or low.

I also follow a similar strategy, but instead of looking at 10% I study “infliction points” where there is buying and selling pressure. You find those when you apply EMA 20, 50 and 200 and look at the price chart in the timeframe most people/bots look at. Start with daily chart and drill down from there. Study the volume and then buy/sell when price is more likely to bounce.

[quote=“RobertLloyd, post:1, topic:3075”]Okay, I have started trading on an exchange. Here is my intended strategy

i) I have chosen two cryptos, both of which I want. I want PPC, and I am also happy to have BTC, so that’s my pair

ii) I have got out of thinking of the dollar price, and think only in terms of the PPC/BTC rate

iii) Assuming I bought some PPC at, say, 0.0022 BTC, I create a sell order for 10% more (i.e. 0.0024)

iv) Sooner or later, they sell and I get the BTC equivalent. I then use the BTC to set a buy order for PPC, but at a price that is 10% lower (back at 0.0022)

v) I repeat this process, back and forth. Basing buy and sell orders on an expectation of 10% price swings is realistic, and exceeds the percentage commission extracted by the exchange for each sale. Since I want both PPC and BTC, I am always happy with the outcome of the trade

vi) From time to time, I will draw off some peercoins and/or a fraction of a BTC to my client or paper wallet, to preserve a modest but growing profit

The risks I perceive are the exchange imploding, or my account getting hacked. But I don’t see any risk in the trading strategy, itself

Any comments or suggestions on how I can improve this scheme? It seems foolproof, which makes me wonder whether I have overlooked anything[/quote]

I used to day trade, but found it to be overall economically unproductive and not a good use of precious time.

Now, I do my best to determine fundamental value and then go there, invest, and stay patient.

Thank you, everyone, for your comments and suggestions - I have read through the thread several times - very stimulating

Half my peercoins are in paper wallets, and I intend to keep them there, so my long-term investment is unaffected. Most of the rest are minting for the good of the network. Only the remainder is for the trading so, even if I make a right hash of it, I will not be compromised (too much)

Oh dear, I appear to have made a hash of it slightly sooner than expected, although not in the sort of way I’d expected

I set up an account on Bter. I yesterday proceeded to set up two-factor authentication. This was via Google Authenticator on Windows

I did this by downloading and installing Google Authenticator. Bter gave me a special key, which I copied into Google Authenticator. It then gave me a “Time-based One-time Password” (TOTP) every 30 seconds. I used one of these to enable the two-factor authentication on my Bter account

Here’s the problem: I closed Google Authenticator, then reopened it - but it did not remember what I had just set up. It is just blank. Thus, it is not offering me the password" every 30 seconds, meaning I cannot log into my Bter account. I am definitely accessing the right Google Authenticator, as it is password protected, and I open it with that password

This problem happened within seconds of me successfully enabling the TOTP

I have raised a support ticket with Bter, asking them to disable the TOTP on my account, but can anyone here help with the following questions?

  • Has anyone here experienced anything similar?
  • Is it technically possible for Bter to override and disable the TOTP on my account?
  • How do I prove to them I am the account holder, given that it is anonymous from the outset?
  • Have I goxed myself? :o

I have yet to hear back from Bter

Wholly molly. I’ve got no good advice and only write to extend my emotional support. :omg:

Just had a reply back, confirming that they can help, and asking for proof of identity, etc.

That’s what I was thinking. They basically need you to prove you’re the account owner. I’m not sure about what would happen in the case you’re using a nickname and fake account info (i.e. on BTC-E).

Good luck! :slight_smile:

Matter successfully resolved

Bter are very careful on this and put me through some stringent tests (which I don’t want to describe publicly)

The process took about 48 hours, from first email to last

[quote=“RobertLloyd, post:15, topic:3075”]Matter successfully resolved

Bter are very careful on this and put me through some stringent tests (which I don’t want to describe publicly)

The process took about 48 hours, from first email to last[/quote]

Nice to hear that things worked out for you.
I remember my own scare and brush faith not long ago. Brrr… :slight_smile:

Hey RobertLloyd,

I’m curious to heard about your trading strategy. Did you have any success with it, or still have any?

I’m also interested on trading, (since i got my 1st 5Peercoins [thx guys :)] and don’t know how to increase it.)

Similar topic on youtube by Sentdex:

Maybe system using ShapeShift: (lol :D)

Prepare Nubits coin to buy Bitcoin

1.] if Bitcoin Price is too low
then trade the Nubits into Bitcoin

 [many days later...]

2.] if Bitcoin Price is too high
then trade the Bitcoin into Nubits

Repeat procedure 1 again. heheheh… i don’t know is this effective technique :slight_smile:

Happy trading guys!!! Take care… :))