The 10 Commandments For Trading On BTC-E
Musical and advisory accompaniment: 10 Crack Commandments
This post does not constitute financial advice.
Commandment #1: You have already won
Congratulations, you are in the first 1% of people to hear about Bitcoin, let alone buy any. If you own more than 0 at this stage you’re pretty much guaranteed to make a positive return, provided you don’t screw it up thinking you’re the world’s best daytrader. In addition, cryptocurrency is deflationary, there’s plenty of idiots like this making you rich. When in doubt, hold and wait for it to rise.
Commandment #2: Do not type in all caps
You’ll get banned.
Commandment #3: Understand what you’re looking at
Read this: Explanation of candle graphs
Commandment #4: Green candles operate on a Gandalf-esque schedule, so to be a beneficiary be early rather than on time
If the trollbox is going crazy about ‘green candles’ and <Insert coin code> unless you already own your position in that coin you’re too late. Trying to buy as the rocket takes off just means YOU get left at the top while the people who bought in long before the candle started sell to you. Price drops, they buy back in, and wealth has just been transferred, with you on the wrong end.
Commandment #5: Take profit in increments
If you see the opportunity to be the one doing the selling (refer to Commandment #4), DON’T sell 100% of your coin and then frantically try and buy it all back (see Commandment #7) as you realize the correction was shorter than you thought. Put 20% on the line if you’re confident, stay calm, and collect. If not confident, refer to Commandment #1. It’s like surfing, there will always be another wave.
Commandment #6: Understand that fees matter
The fees on BTC-E are wholly percentage based (no flat fee). This means there is no penalty for selling a large quantity in several small increments instead of together. This is why Commandment #5 is advisable, there is no upside in terms of saving on transaction costs to dump everything at once, and it’s much riskier. On the other hand, every millibit you pay in fees is Bitcoin you have sacrificed to the system, so try to pick strong positions and stick to them. Also note that the requirement to transact “through” BTC means that swapping a strong LTC position to a strong FTC position is going to cost you double the fees.
Commandment #7: Buy high, sell low
No, really. Overestimate the price you can purchase at, and underestimate the price you can sell at.
Keep in mind that the orderbooks are fluid, and the price changes every millisecond. If the price indicator reads 0.0012, then submit your buy order for 0.0015. Submit your sell order for 0.009. Buy orders indicate the maximum you will buy for (not the price that your coins are guaranteed to be purchased for) and sell orders the minimum (same). It’s a good idea to give yourself a little leeway, as it ensures your purchase is completed in its entirety as fast as possible, and that half your order doesn’t get left behind never to be filled because the swell of buy orders (including yours) pushed the price up 0.0001.
You shouldn’t be trading every little nook and cranny with your 0.1 LTC remember (see Commandment #5). If that extra 0.001 is going to kill your profit, you need to be making smarter purchases less frequently.
Commandment #8: Nothing matters except the price
Ignore any bullshit about The Keiser Report, Fontas, The Bitcoin Foundation, Coindesk or plutonium1977. Watch the price, not some irrelevant predictions from an “expert”. It seriously doesn’t matter that much if Keiser says “Litecoin” or not on his show, the market is well past that. At the end of the day only you are held accountable by your bank balance.
Commandment #9: Ignore the trollbox
You can safely ignore the following:
Anybody trying to incite or publicize a “pump”.
There are no pumps organized in the trollbox, and anyone trying (and failing) to start one is revealing an obvious bias at already having bought in. If any organized collectives do exist, they are not organized publicly you can rest assured. This includes links to obviously sham Twitter accounts.
Anybody else using the word “pump”.
Everybody and their dog thinks they know when a “pump” has ended, and they prove it by randomly shouting about it. It correlates to the actual end of a pump less often than if they were rolling dice, so you know they’re not even guessing, they’re actively wrong.
Anybody that says LTC is on Gox, China is crashing or ‘Arize chickun’.
All trollbox memes. Oh, and ‘XXX to the moon!’.
Anybody that tries to facilitate serious discussion / analysis
For example: “Here’s the price chart for XPM for the last three months. <link> Take a look at this and let me know what you think.” Look, it’s called the trollbox for a reason, anyone trying to be intellectual over the clamor needs to learn the concept of ‘fighting a losing battle’.
Anybody making a price prediction, especially with a short timeframe
I don’t even understand why people say things like ‘LTC to 40.3 in 5 minutes’. Do they actually think anyone pays attention if they were right or not? This category includes people that claim to have some history of communally recognized prediction success, eg. ‘NMC on the rise. Anyone who was on last week/last night/last 10 minutes knows I’m correct.’
Right, so if 95%+ of the trollbox is stupid, how do you figure out who’s actually making money? People actually banking do one of two things:
Stay silent
They’re making money, what more needs to be done? Unlike the horrible ‘daytraders’, they don’t need to compensate for their frequent losses by feebly pretending they have an impact on the market through hyperbolic / overly meme-ified statements in trollbox.
Troll like crazy, without any of the listed indicators
Some of the real traders / whales just enjoy the mayhem. I haven’t been able to pick el mech yet, but I think there’s a good chance he’s in the mix. Their contributions revolve around trash talking coins they don’t hold, sarcastic comments (occasional wordplay) and baiting all of the people listed above. If you notice someone doing this consistently, in the unlikely event they make a serious call you should probably pay attention. Or maybe PM them and ask what their portfolio distribution is.
Commandment #10: Hold some coin offline
BTC-E is pretty major, and so has the resources and experience to make sure their security is tight. That said, a Bitcoin site is hacked and emptied every week, so siphon your winnings offline. It’s like eggs and baskets.
My picks:
Short term: LTC and NMC
Mid term: XPM
Long term: BTC
Musical and advisory accompaniment: 10 Crack Commandments
This post does not constitute financial advice.
Commandment #1: You have already won
Congratulations, you are in the first 1% of people to hear about Bitcoin, let alone buy any. If you own more than 0 at this stage you’re pretty much guaranteed to make a positive return, provided you don’t screw it up thinking you’re the world’s best daytrader. In addition, cryptocurrency is deflationary, there’s plenty of idiots like this making you rich. When in doubt, hold and wait for it to rise.
Commandment #2: Do not type in all caps
You’ll get banned.
Commandment #3: Understand what you’re looking at
Read this: Explanation of candle graphs
Commandment #4: Green candles operate on a Gandalf-esque schedule, so to be a beneficiary be early rather than on time
If the trollbox is going crazy about ‘green candles’ and <Insert coin code> unless you already own your position in that coin you’re too late. Trying to buy as the rocket takes off just means YOU get left at the top while the people who bought in long before the candle started sell to you. Price drops, they buy back in, and wealth has just been transferred, with you on the wrong end.
Commandment #5: Take profit in increments
If you see the opportunity to be the one doing the selling (refer to Commandment #4), DON’T sell 100% of your coin and then frantically try and buy it all back (see Commandment #7) as you realize the correction was shorter than you thought. Put 20% on the line if you’re confident, stay calm, and collect. If not confident, refer to Commandment #1. It’s like surfing, there will always be another wave.
Commandment #6: Understand that fees matter
The fees on BTC-E are wholly percentage based (no flat fee). This means there is no penalty for selling a large quantity in several small increments instead of together. This is why Commandment #5 is advisable, there is no upside in terms of saving on transaction costs to dump everything at once, and it’s much riskier. On the other hand, every millibit you pay in fees is Bitcoin you have sacrificed to the system, so try to pick strong positions and stick to them. Also note that the requirement to transact “through” BTC means that swapping a strong LTC position to a strong FTC position is going to cost you double the fees.
Commandment #7: Buy high, sell low
No, really. Overestimate the price you can purchase at, and underestimate the price you can sell at.
Keep in mind that the orderbooks are fluid, and the price changes every millisecond. If the price indicator reads 0.0012, then submit your buy order for 0.0015. Submit your sell order for 0.009. Buy orders indicate the maximum you will buy for (not the price that your coins are guaranteed to be purchased for) and sell orders the minimum (same). It’s a good idea to give yourself a little leeway, as it ensures your purchase is completed in its entirety as fast as possible, and that half your order doesn’t get left behind never to be filled because the swell of buy orders (including yours) pushed the price up 0.0001.
You shouldn’t be trading every little nook and cranny with your 0.1 LTC remember (see Commandment #5). If that extra 0.001 is going to kill your profit, you need to be making smarter purchases less frequently.
Commandment #8: Nothing matters except the price
Ignore any bullshit about The Keiser Report, Fontas, The Bitcoin Foundation, Coindesk or plutonium1977. Watch the price, not some irrelevant predictions from an “expert”. It seriously doesn’t matter that much if Keiser says “Litecoin” or not on his show, the market is well past that. At the end of the day only you are held accountable by your bank balance.
Commandment #9: Ignore the trollbox
You can safely ignore the following:
Anybody trying to incite or publicize a “pump”.
There are no pumps organized in the trollbox, and anyone trying (and failing) to start one is revealing an obvious bias at already having bought in. If any organized collectives do exist, they are not organized publicly you can rest assured. This includes links to obviously sham Twitter accounts.
Anybody else using the word “pump”.
Everybody and their dog thinks they know when a “pump” has ended, and they prove it by randomly shouting about it. It correlates to the actual end of a pump less often than if they were rolling dice, so you know they’re not even guessing, they’re actively wrong.
Anybody that says LTC is on Gox, China is crashing or ‘Arize chickun’.
All trollbox memes. Oh, and ‘XXX to the moon!’.
Anybody that tries to facilitate serious discussion / analysis
For example: “Here’s the price chart for XPM for the last three months. <link> Take a look at this and let me know what you think.” Look, it’s called the trollbox for a reason, anyone trying to be intellectual over the clamor needs to learn the concept of ‘fighting a losing battle’.
Anybody making a price prediction, especially with a short timeframe
I don’t even understand why people say things like ‘LTC to 40.3 in 5 minutes’. Do they actually think anyone pays attention if they were right or not? This category includes people that claim to have some history of communally recognized prediction success, eg. ‘NMC on the rise. Anyone who was on last week/last night/last 10 minutes knows I’m correct.’
Right, so if 95%+ of the trollbox is stupid, how do you figure out who’s actually making money? People actually banking do one of two things:
Stay silent
They’re making money, what more needs to be done? Unlike the horrible ‘daytraders’, they don’t need to compensate for their frequent losses by feebly pretending they have an impact on the market through hyperbolic / overly meme-ified statements in trollbox.
Troll like crazy, without any of the listed indicators
Some of the real traders / whales just enjoy the mayhem. I haven’t been able to pick el mech yet, but I think there’s a good chance he’s in the mix. Their contributions revolve around trash talking coins they don’t hold, sarcastic comments (occasional wordplay) and baiting all of the people listed above. If you notice someone doing this consistently, in the unlikely event they make a serious call you should probably pay attention. Or maybe PM them and ask what their portfolio distribution is.
Commandment #10: Hold some coin offline
BTC-E is pretty major, and so has the resources and experience to make sure their security is tight. That said, a Bitcoin site is hacked and emptied every week, so siphon your winnings offline. It’s like eggs and baskets.
My picks:
Short term: LTC and NMC
Mid term: XPM
Long term: BTC