Author Topic: Lesson: Contrarian Trading (Read 456 times)

whifmoi · « **on:** September 29, 2013, 11:13:41 am »

Manipulation, greed and panic: How to compete and profit from it.

In todays world manipulation done by the "elite" is leading to greedy buys and panic sells. And everybody who is dreaming to be millionaire by owning cryptos can loose everything. Nearby: why do you want to be a millionaire, what is the reason for this?

I'm a socialist, and doing this for human beings (and wild animals and plants). If you are a millionaire already, or want to get rich quick, stay away.

1) Choose real values as assets
For my lesson I choose Bitcoins and PPcoins as my assets. I have no preference between the two. I really believe in these assets, like I would into gold and silver, the own house, or company shares. I know its risks, and its advantages. If you have no trust, then do not own them.

2) Choose a ratio in between the assets
Because I have no preference, I choose to own 50% of my assets in BTC, 50% in PPC. On many different assets the independent ones should have equal weight. Don't change the choosen weight of one asset without a very good reason.

3) Trade
Trade ONLY the way that you get closer to the weight target of 2). You can use timing, meaning you can wait for larger price jumps before you execute. If you miss this good trading point, you have missed an opportunity only, but you have not lost your assets.

For some time I will do real trades. You will see how I will gain value out of manipulation, greed and panic. Yourself must withstand it, this is no easy task at the beginning. Start with small values if you wish, this is one very big advantage of cryptos. You can try to reproduce this strategy, and compete me in timing. If you have questions then you can ask. Convinced trend traders please stay away.

In the next post I will list all trades done by me. I trade on vircurex for this. Because I don't want to influence the price, I will not give any estimation, and my trades will be filled into the next post AFTER execution.

I will modify this post if new important information needs to be added.

whifmoi · « **Reply #1 on:** September 29, 2013, 11:14:36 am »

My Trades
Date Time Type PPC_Quantity BTC_Price BTC_Balance PPC_Balance Spot BTC_weight PPC_weight 2013-09-29 01:57:46 init - - 4.93166438 1155.82162320 0.00180 70% 30%

2013-09-29 04:13:26 buy 396.98890000 0.00180100 2013-09-29 04:13:36 buy 16.53175000 0.00180100 4.18691370 1568.51523190 0.00190 58% 42% 2013-09-29 12:28:51 buy 3.02294894 0.00190100 2013-09-29 16:10:56 buy 52.08333333 0.00191999 2013-09-29 16:10:57 buy 37.91666667 0.00192000 2013-09-29 16:11:34 buy 1.04248033 0.00192000 2013-09-29 16:11:34 buy 49.91000000 0.00192312 3.91038314 1712.20271033 0.00192 54% 46% 2013-09-29 21:03:36 buy 90.00000000 0.00193100 3.73659314 1802.02271033 0.00192 52% 48%

Date Time Type PPC_Quantity BTC_Price BTC_Balance PPC_Balance Spot BTC_weight PPC_weight 2013-09-30 01:49:47 buy 1.00361300 0.00196100 2013-09-30 04:58:01 buy 9.00000000 0.00198100 2013-09-30 04:58:08 buy 8.98190000 0.00197100 3.69909274 1820.97025231 0.00195 51% 49% 2013-09-30 05:13:26 buy 7.87830938 0.00196100 2013-09-30 05:16:26 buy 9.00000000 0.00195100 3.66608438 1837.81480508 0.00194 51% 49% 2013-09-30 06:44:18 buy 8.98190000 0.00196100 2013-09-30 06:45:31 buy 9.00000000 0.00195100 2013-09-30 06:45:57 buy 9.00000000 0.00193100 2013-09-30 06:45:57 buy 9.00000000 0.00191100 3.59633388 1873.72474128 0.00192 50% 50% 2013-09-30 09:40:42 sell 1.00000000 0.00197000 2013-09-30 09:40:42 sell 1.00000000 0.00198000 2013-09-30 09:40:42 sell 9.00000000 0.00198890 2013-09-30 09:40:45 sell 9.00000000 0.00199700 2013-09-30 09:47:11 sell 9.00000000 0.00204900 3.65448146 1844.72474128 0.00202 50% 50% 2013-09-30 10:02:07 sell 9.00000000 0.00206890 2013-09-30 10:02:07 sell 9.00000000 0.00207900 2013-09-30 10:02:07 sell 9.00000000 0.00208900 2013-09-30 10:07:09 sell 9.00000000 0.00209900 3.72935452 1808.72474128 0.00210 50% 50% 2013-09-30 10:17:54 buy 4.82549465 0.00201100 2013-09-30 13:01:59 buy 4.17450535 0.00201100 2013-09-30 13:13:46 buy 9.00000000 0.00200100 3.69324653 1826.68874129 0.00205 50% 50% 2013-09-30 16:14:51 sell 9.00000000 0.00212900 2013-09-30 16:14:56 sell 9.00000000 0.00214900 2013-09-30 16:15:05 sell 8.05997000 0.00216900 2013-09-30 17:50:14 sell 0.94003000 0.00216900 2013-09-30 18:01:10 sell 8.99950000 0.00217900 2013-09-30 18:10:55 sell 9.00000000 0.00218900 2013-09-30 18:11:06 sell 9.00000000 0.00219400 2013-09-30 18:11:10 sell 9.00000000 0.00219900 3.82984372 1763.68924129 0.00215 50% 50%

Date Time Type PPC_Quantity BTC_Price BTC_Balance PPC_Balance Spot BTC_weight PPC_weight 2013-10-01 00:08:32 buy 8.98190000 0.00213100 2013-10-01 00:13:14 buy 8.98190000 0.00211100 2013-10-01 00:21:18 buy 8.88625235 0.00209100 2013-10-01 00:21:21 buy 0.11374765 0.00209100 2013-10-01 00:21:21 buy 9.00000000 0.00207100 2013-10-01 00:21:21 buy 9.00000000 0.00205100 3.73582552 1808.56311370 0.00215 49.0% 51.0% 2013-10-01 02:35:38 sell 2.28253178 0.00212900 2013-10-01 02:36:29 sell 5.71746822 0.00212900 2013-10-01 02:37:59 sell 8.00000000 0.00214900 3.76998108 1792.56311370 0.00214 49.6% 50.4% 2013-10-01 03:53:26 sell 8.00000000 0.00214900 2013-10-01 03:53:26 sell 8.00000000 0.00216900 2013-10-01 03:53:27 sell 8.00000000 0.00218900 2013-10-01 03:53:27 sell 8.00000000 0.00220900 2013-10-01 03:53:27 sell 8.00000000 0.00222900 2013-10-01 03:53:27 sell 8.00000000 0.00224900 3.87532200 1744.56311370 0.00215 50.8% 49.2% 2013-10-01 04:42:13 buy 9.00000000 0.00217100 2013-10-01 04:43:03 buy 9.00000000 0.00218100 3.83615400 1762.52711370 0.00215 50.3% 49.7% 2013-10-01 04:58:04 buy 0.49040382 0.00215100 2013-10-01 08:16:34 buy 2.00000000 0.00216100 2013-10-01 08:16:35 buy 2.00000000 0.00215200 3.82647315 1767.00853672 0.00213 50.4% 49.6% 2013-10-01 08:44:51 buy 4.00000000 0.00214200 2013-10-01 08:44:51 buy 9.00000000 0.00213100 2013-10-01 08:44:51 buy 9.00000000 0.00211100 2013-10-01 08:44:51 buy 9.00000000 0.00209100 2013-10-01 08:44:52 buy 9.00000000 0.00207100 2013-10-01 08:44:52 buy 9.00000000 0.00205100 2013-10-01 08:44:52 buy 9.00000000 0.00203100 2013-10-01 08:44:52 buy 9.00000000 0.00201100 3.68743215 1833.87453672 0.00214 48.4% 51.6% 2013-10-01 10:17:28 sell 7.99950000 0.00212900 2013-10-01 10:33:52 sell 7.99990000 0.00212900 2013-10-01 10:36:38 sell 8.00000000 0.00212900 2013-10-01 10:36:54 sell 8.00000000 0.00213900 2013-10-01 10:37:12 sell 8.00000000 0.00214900 2013-10-01 10:37:13 sell 8.00000000 0.00215900 2013-10-01 10:37:13 sell 8.00000000 0.00216900 2013-10-01 10:37:26 sell 8.00000000 0.00218900 3.82469182 1769.87513672 0.00218 49.8% 50.2% 2013-10-01 11:55:47 buy 1.00000000 0.00215100 2013-10-01 11:55:55 buy 2.00000000 0.00214200 2013-10-01 11:56:02 buy 4.00000000 0.00213200 2013-10-01 13:07:44 sell 1.00000000 0.00214900 2013-10-01 13:09:48 sell 0.99999999 0.00215900 2013-10-01 13:14:01 buy 1.00000000 0.00213101 2013-10-01 13:14:57 buy 1.00000000 0.00213100 2013-10-01 13:14:57 buy 2.00000000 0.00212100 2013-10-01 13:14:57 buy 4.00000000 0.00211100 2013-10-01 13:14:57 buy 9.00000000 0.00209100 2013-10-01 13:14:57 buy 9.00000000 0.00207100 2013-10-01 13:14:57 buy 9.00000000 0.00205100 2013-10-01 13:14:57 buy 9.00000000 0.00203100 2013-10-01 13:14:57 buy 9.00000000 0.00201100 3.70478520 1827.75513673 0.00208 49.4% 50.6% 2013-10-01 13:42:51 sell 1.00000000 0.00204900 2013-10-01 14:36:53 buy 1.00000000 0.00203100 2013-10-01 14:36:53 buy 2.00000000 0.00201100 2013-10-01 14:50:32 buy 4.00000000 0.00199100 2013-10-01 14:50:32 buy 9.00000000 0.00197100 2013-10-01 14:50:33 buy 9.00000000 0.00195100 2013-10-01 14:50:33 buy 9.00000000 0.00193100 2013-10-01 14:50:33 buy 9.00000000 0.00191110 2013-10-01 14:50:33 buy 9.00000000 0.00189100 2013-10-01 14:50:33 buy 9.00000000 0.00187100 2013-10-01 14:50:33 buy 9.00000000 0.00185100 2013-10-01 14:50:33 buy 9.00000000 0.00183100 2013-10-01 14:50:33 buy 9.00000000 0.00181100 3.53964121 1914.57913673 0.00206 47.3% 52.7% 2013-10-01 15:02:52 sell 8.00000000 0.00204900 2013-10-01 15:02:54 sell 8.00000000 0.00205900 2013-10-01 15:38:25 sell 8.00000000 0.00206900 2013-10-01 15:55:23 sell 8.00000000 0.00204900 2013-10-01 15:55:23 sell 8.00000000 0.00205900 2013-10-01 15:55:24 sell 8.00000000 0.00206900 2013-10-01 15:58:15 sell 24.00000000 0.00207899 3.68807154 1842.57913673 0.00205 49.4% 50.6% 2013-10-01 16:05:21 sell 1.19212618 0.00207899 2013-10-01 16:32:19 buy 1.00000000 0.00203100 2013-10-01 16:38:27 sell 6.80787382 0.00206900 2013-10-01 16:38:28 sell 8.00000000 0.00208900 2013-10-01 16:38:28 sell 8.00000000 0.00210900 2013-10-01 16:38:28 sell 8.00000000 0.00212900 2013-10-01 16:38:28 sell 8.00000000 0.00214900 2013-10-01 16:38:28 sell 8.00000000 0.00216900 2013-10-01 16:38:28 sell 8.00000000 0.00218900 2013-10-01 16:38:28 sell 8.00000000 0.00220900 2013-10-01 16:38:28 sell 8.00000000 0.00222900 2013-10-01 16:38:28 sell 8.00000000 0.00224900 2013-10-01 16:38:28 sell 8.00000000 0.00226900 2013-10-01 16:38:28 sell 8.00000000 0.00228900 2013-10-01 16:39:48 sell 8.00000000 0.00230900 2013-10-01 16:39:48 sell 8.00000000 0.00232900 2013-10-01 16:39:48 sell 8.00000000 0.00234900 2013-10-01 16:39:48 sell 8.00000000 0.00236900 2013-10-01 16:39:48 sell 8.00000000 0.00238900 3.98859020 1707.57713673 0.00205 53.3% 46.7% 2013-10-01 17:11:17 buy 79.99990000 0.00212893 3.81827602 1787.41703693 0.00210 50.4% 49.6% 2013-10-01 17:27:26 buy 1.00000000 0.00213100 2013-10-01 17:34:17 buy 1.82895000 0.00211100 2013-10-01 17:34:18 buy 0.17105000 0.00211100 2013-10-01 17:34:34 buy 1.82151038 0.00209100 2013-10-01 18:24:53 buy 2.17404000 0.00209100 2013-10-01 18:28:02 buy 8.98190000 0.00207100 2013-10-01 18:32:39 buy 3.15807000 0.00205100 2013-10-01 18:47:39 sell 1.00000000 0.00214900 2013-10-01 18:47:44 sell 2.00000000 0.00216900 2013-10-01 18:48:50 sell 4.00000000 0.00218900 2013-10-01 18:52:12 sell 8.00000000 0.00220900 2013-10-01 19:46:39 sell 8.00000000 0.00222900 2013-10-01 19:46:39 sell 8.00000000 0.00224900 2013-10-01 19:46:39 sell 8.00000000 0.00226900 2013-10-01 19:46:40 sell 8.00000000 0.00228900 2013-10-01 19:46:40 sell 8.00000000 0.00230900 2013-10-01 19:46:40 sell 8.00000000 0.00232900 2013-10-01 19:46:40 sell 8.00000000 0.00234900 2013-10-01 19:46:40 sell 8.00000000 0.00236900 2013-10-01 19:46:40 sell 8.00000000 0.00238900 3.97725437 1719.51428627 0.00240 49.1% 50.9%

Date Time Type PPC_Quantity BTC_Price BTC_Balance PPC_Balance Spot BTC_weight PPC_weight 2013-10-01 23:48:48 sell 7.00000000 0.00238900 2013-10-02 00:30:53 sell 7.00000000 0.00238900 2013-10-02 00:39:57 sell 3.10982043 0.00238900 2013-10-02 01:05:00 buy 0.97044162 0.00233100 2013-10-02 01:05:05 buy 0.51292894 0.00233100 2013-10-02 01:06:52 buy 0.25738445 0.00233100 2013-10-02 01:07:00 buy 0.12915653 0.00233100 2013-10-02 01:29:38 buy 0.06480833 0.00233100 2013-10-02 01:34:53 buy 0.06527670 0.00233100 2013-10-02 02:20:49 sell 7.00000000 0.00250000 2013-10-02 02:21:35 sell 35.00000000 0.00250000 4.11817604 1662.40046245 0.00250 49.8% 50.2% 2013-10-02 02:48:12 sell 1.00000000 0.00248900 2013-10-02 02:48:12 sell 2.00000000 0.00250900 2013-10-02 02:48:16 sell 1.99960000 0.00252900 2013-10-02 02:48:21 sell 2.00030000 0.00252900 2013-10-02 02:51:12 sell 7.00000000 0.00254900 2013-10-02 02:52:56 sell 7.00000000 0.00256900 4.17151791 1641.40056245 0.00257 49.7% 50.3% 2013-10-02 03:11:56 sell 7.00000000 0.00258900 2013-10-02 03:13:12 sell 7.00000000 0.00260900 2013-10-02 03:56:46 sell 7.00000000 0.00262900 2013-10-02 03:56:46 sell 7.00000000 0.00264900 4.24470327 1613.40056245 0.00262 50.1% 49.9% 2013-10-02 05:28:07 buy 8.00000000 0.00255100 2013-10-02 05:28:07 buy 8.00000000 0.00254100 2013-10-02 05:28:07 buy 8.00000000 0.00253100 2013-10-02 05:28:08 buy 8.00000000 0.00252100 2013-10-02 05:28:12 buy 8.00000000 0.00251100 2013-10-02 05:28:16 buy 2.50792000 0.00250100 2013-10-02 05:37:34 buy 5.49208000 0.00250100 2013-10-02 05:37:38 buy 5.48100000 0.00249100 2013-10-02 05:42:11 buy 2.51386000 0.00249100 2013-10-02 05:43:03 buy 7.99990000 0.00247100 4.08377234 1677.26733293 0.00246 49.7% 50.3% 2013-10-02 05:56:07 buy 7.96790000 0.00245100 2013-10-02 05:58:18 buy 0.99800000 0.00243100 2013-10-02 05:58:19 buy 0.99800082 0.00243100 2013-10-02 06:39:44 sell 7.00000000 0.00250900 2013-10-02 06:50:11 sell 7.00000000 0.00250900 2013-10-02 06:51:17 sell 7.00000000 0.00252900 2013-10-02 07:09:47 sell 7.00000000 0.00254900 2013-10-02 07:49:06 sell 7.00000000 0.00256900 2013-10-02 08:22:03 sell 7.00000000 0.00258900 2013-10-02 08:24:59 sell 7.00000000 0.00260900 2013-10-02 08:26:39 sell 7.00000000 0.00262900 2013-10-02 08:27:06 sell 7.00000000 0.00264900 2013-10-02 10:20:09 buy 7.99990000 0.00243100 2013-10-02 10:20:28 buy 8.00000000 0.00241100 2013-10-02 10:20:47 buy 7.99990000 0.00239100 2013-10-02 10:20:47 buy 8.00000000 0.00237100 2013-10-02 10:21:05 buy 7.91999543 0.00235100 2013-10-02 10:21:39 buy 0.08000457 0.00235100 2013-10-02 10:21:40 buy 7.91999543 0.00233100 2013-10-02 10:22:49 buy 0.08000457 0.00233100 2013-10-02 10:22:49 buy 7.91999543 0.00231100 2013-10-02 10:23:12 buy 0.08000457 0.00231100 2013-10-02 10:23:12 buy 8.00000000 0.00229100 2013-10-02 10:23:12 buy 8.00000000 0.00227100 2013-10-02 10:23:13 buy 8.00000000 0.00225100 2013-10-02 10:23:13 buy 7.91999543 0.00223100 2013-10-02 10:24:00 buy 0.08000457 0.00223100 2013-10-02 10:24:00 buy 7.91999543 0.00221100 2013-10-02 10:24:18 buy 0.08000457 0.00221100 2013-10-02 10:25:27 buy 8.00000000 0.00219100 2013-10-02 10:25:27 buy 8.00000000 0.00217100 2013-10-02 10:25:27 buy 8.00000000 0.00215100 2013-10-02 10:26:52 buy 8.00000000 0.00213100 2013-10-02 10:26:52 buy 8.00000000 0.00211100 2013-10-02 16:08:48 sell 7.00000000 0.00266900 2013-10-02 16:08:48 sell 7.00000000 0.00268900 3.94962937 1745.93910640 0.00246 47.9% 52.1% 2013-10-02 17:56:55 sell 3.13462201 0.00248900 2013-10-02 19:51:45 sell 3.86488000 0.00248900 2013-10-02 19:54:08 sell 7.00000000 0.00250900 2013-10-02 23:35:57 sell 7.00000000 0.00252900 4.00221177 1724.93960439 0.00240 49.2% 50.8%

Date Time Type PPC_Quantity BTC_Price BTC_Balance PPC_Balance Spot BTC_weight PPC_weight 2013-10-03 14:11:18 sell 1.00000000 0.00234900 2013-10-03 14:11:18 sell 2.00000000 0.00236900 2013-10-03 14:11:18 sell 4.00000000 0.00238900 2013-10-03 14:11:18 sell 8.00000000 0.00240900 2013-10-03 14:11:18 sell 7.00000000 0.00242900 2013-10-03 14:11:18 sell 7.00000000 0.00244900 2013-10-03 14:11:18 sell 7.00000000 0.00246900 2013-10-03 14:11:19 sell 7.00000000 0.00246900 2013-10-03 14:11:19 sell 7.00000000 0.00248900 2013-10-03 14:11:19 sell 7.00000000 0.00250900 2013-10-03 14:11:19 sell 7.00000000 0.00252900 2013-10-03 14:11:19 sell 7.00000000 0.00254900 2013-10-03 14:11:19 sell 7.00000000 0.00256900 2013-10-03 14:11:19 sell 7.00000000 0.00258900 2013-10-03 14:11:19 sell 7.00000000 0.00260900 2013-10-03 14:11:19 sell 7.00000000 0.00262900 2013-10-03 14:12:02 sell 7.00000000 0.00264900 2013-10-03 14:12:02 sell 7.00000000 0.00266900 2013-10-03 14:12:02 sell 7.00000000 0.00268900 2013-10-03 14:12:02 sell 7.00000000 0.00270900 2013-10-03 14:12:02 sell 7.00000000 0.00272900 2013-10-03 14:12:02 sell 7.00000000 0.00274900 2013-10-03 14:12:02 sell 7.00000000 0.00276900 2013-10-03 14:12:03 sell 7.00000000 0.00278900 2013-10-03 14:12:03 sell 7.00000000 0.00280900 2013-10-03 14:12:03 sell 7.00000000 0.00282900 2013-10-03 14:12:03 sell 7.00000000 0.00284900 2013-10-03 14:12:03 sell 7.00000000 0.00286900 2013-10-03 14:12:03 sell 7.00000000 0.00288900 2013-10-03 14:13:14 sell 7.00000000 0.00290900 2013-10-03 14:13:14 sell 7.00000000 0.00292900 4.54190640 1520.93960439 0.00236 55.9% 44.1% 2013-10-03 16:09:31 buy 8.00000000 0.00240100 2013-10-03 16:09:48 buy 8.00000000 0.00239100 2013-10-03 16:10:45 buy 8.00000000 0.00238100 2013-10-03 16:11:31 buy 8.00000000 0.00237100 2013-10-03 16:11:34 buy 0.38388600 0.00236100 2013-10-03 16:13:44 buy 7.61611400 0.00236100 2013-10-03 16:35:12 buy 160.00000000 0.00242000 4.05946641 1720.53960440 0.00238 49.8% 50.2%
This post ran out of space, so for next day details see post #7:
http://ppcointalk.org/index.php?topic=528.msg4464#msg4464

My Wealth
Because I have no preference for one coin, have no preference for any real asset I own, I will calculate my inital wealth and intermittent wealth in both PPC and BTC. And no, Dollars or Euros are no assets for me, there's no reason why I should calculate the wealth in fiat money. Looks good, but makes no sense.
Date Time BTC_Balance PPC_Balance Spot BTC_wealth PPC_wealth gain 2013-09-29 01:57:46 4.93166438 1155.82162320 0.00180 7.01214330 3895.63516764 - 2013-09-29 21:03:36 3.73659314 1802.02271033 0.00192 7.19647674 3748.16497075 2.324% 2013-09-30 18:11:10 3.82984372 1763.68924129 0.00215 7.62177559 3545.01190176 0.206% 2013-10-01 19:46:40 3.97725437 1719.51428627 0.00240 8.10408866 3376.70360710 0.598% 2013-10-02 23:35:57 4.00221177 1724.93960439 0.00240 8.14206682 3392.52784189 0.469% 2013-10-03 16:35:12 4.05946641 1720.53960440 0.00240 8.22283918 3426.18299190 0.992% 2013-10-04 23:58:20 5.25114522 1337.16048899 0.00400 10.59978718 2649.94679399 -0,367% 2013-10-05 23:43:27 4.99617018 1434.11029585 0.00345 9.94385070 2882.27556541 1,038% 2013-10-06 23:33:47 5.09171915 1412.97349526 0.00355 10.10777506 2847.26057977 0.215%

Legend

Date Time
Date and time of a trade. For ease of use I simply take the time stamp from vircurex, it's not my local time.

Type
buy for buying PPC and selling BTC
sell for selling PPC and buying BTC

PPC_Quantity
how many PPC have been bought or sold

BTC_Price
The exchange rate of the trade

BTC_Balance
how many BTC I own after the trade

PPC_Balance
how many PPC I own after the trade

Spot
Current market price from btc-e and vircurex, it's an estimation, accuracy is not necessary here

BTC_weight
How many BTC do I hold, relative in %, after the trade. It's calculated this:
BTC_weight = BTC_Balance / ( all values )
70% = 4.93166438 BTC / ( 4.93166438 BTC + 0.00180 BTC/PPC * 1155.82162320 PPC )

PPC_weight
How many PPC do I hold, relative in %, after the trade. It's calculated this:
PPC_weight = PPC_balance / ( all values )
PPC_weight = 100% - BTC_weight
30% = 100% - 70%

BTC_wealth
My total wealth measured in BTC

PPC_wealth
My total wealth measured in PPC

gain
My increase in coins to the previous day. I compare my balances of the two adjacent days with the mean value of both spot prices. I'm not yet absolutely sure, that this is a correct calculation.

This is a super simple spreadsheet, use the standardized ODF (Open Document Format) for this, computed with LibreOffice for example.

How to calculate the maximum amount of PPC that I can buy or sell at a special price?
PPC_ToBuy = 50% * ( BTC_Balance / price - PPC_Balance )
792 PPC = 50% * ( 4.93166438 BTC / ( 0.00180 BTC/PPC ) - 1155.82162320 ) (maximum buy)
963 PPC = 50% * ( 4.93166438 BTC / ( 0.00160 BTC/PPC ) - 1155.82162320 ) (maximum buy)
-85 PPC = 50% * ( 4.93166438 BTC / ( 0.00500 BTC/PPC ) - 1155.82162320 ) (maximum sell)

I will modify this post if new important information needs to be added.

whifmoi · « **Reply #2 on:** September 30, 2013, 03:00:58 pm »

Some hours after my start I now have (with the last small panic sell) reached the point with the target distribution of 50% of the assets in BTC and 50% in PPC, see time stamp 2013-09-30 06:45:57

By simply dividing my balances, I can calculate my internal spot price. Below it I can buy some PPC, above it I can sell some. At this point in time it calculates like this:
BTC_Balance/PPC_Balance = 3.59633388/1873.72474128 = 0.00192

I invite all manipulators to destroy my strategy and make me look bad :-O

mhps · « **Reply #3 on:** October 01, 2013, 05:06:00 am »

There is a systemic risk in this strategy. If one of the asset components (PPC or BTC) go down toward zero and never comes back again (doesn't have to reach zero but reaching zero is a possible scenario), your will beforced to buy the losing component again and again, reducing your entire asset value toward zero (and totally losing it if one of the component dies).

whifmoi · « **Reply #4 on:** October 01, 2013, 10:07:18 am »

Quote from: mhps on October 01, 2013, 05:06:00 am

There is a systemic risk in this strategy. If one of the asset components (PPC or BTC) go down toward zero and never comes back again (doesn't have to reach zero but reaching zero is a possible scenario), your will beforced to buy the losing component again and again, reducing your entire asset value toward zero (and totally losing it if one of the component dies).

You are completely right. Every asset has it's risk. Gold can be stolen, an encrypted crypto wallet not. A successfull company can fail in short time, if a corrupt or unprofessional managing board does wrong decisions, gold can not. This is the reason for spreading the property over several real assets with hopefully different risks.

My constraint does not mean, that you must invest, you can wait as long as you want, and clarify the situation. But you must not run with the herd. My last trades have been with many small limit orders. This way I keep the spread myself. But I also can wait on large price jumps and buy/sell against a "wall" at once.

whifmoi · « **Reply #5 on:** October 02, 2013, 08:17:16 am »

Goog morning. Nice run. Now it's time to explain why it can be better to wait on large price jumps.

The last three days I have profited from large volatility around a spot, as you can see in my order execution list. In the last run, while all my small orders have been executed all the way up the run, my gain in coins is very low. It had been better to have no limit orders and wait on this jump. The direction does not matter, if you have no preference.

Can you really make money in them [stocks] without taking a serious risk? Yes indeed if you can find enough of them to make a diversified group, and if you don’t lose patience if they fail to advance soon after you buy them. Sometimes the patience needed may appear quite considerable. [But] most of the bargain issues in our experience have not taken that long to show good profits.
Benjamin Graham

The wait on large price jumps has many advantages. You can leave the exchange in between the jumps, so not beeing burned in an exchange shutdown. You have time for your real live, doing more reasonable things. You can make your holiday. If you are lucky, you had a price run or crash all along your absence. If there was a price spike, you lost only an opportunity, not your assets. You will miss many opportunities, but they are coming again and again.

calian · « **Reply #6 on:** October 02, 2013, 09:17:12 am »

What is your goal here? To hedge currency risk/volatility? To gain purchasing power? To ensure you're invested in the long term cryptocurrency leader? I agree on your choice of coins, but can't possibly convince myself to hold equal value in PPC at this time. There just isn't the infrastructure and I'm uncertain if proof of stake will be integrated into a BIP at some point. If so PPC could really suffer if it hasn't established a market niche for itself.

I'll be interested if your strategy could result in a long term increase in absolute quantity of both types of currency.

whifmoi · « **Reply #7 on:** October 02, 2013, 09:45:30 am »

Quote from: calian on October 02, 2013, 09:17:12 am

What is your goal here? To hedge currency risk/volatility? To gain purchasing power? To ensure you're invested in the long term cryptocurrency leader? I agree on your choice of coins, but can't possibly convince myself to hold equal value in PPC at this time. There just isn't the infrastructure and I'm uncertain if proof of stake will be integrated into a BIP at some point. If so PPC could really suffer if it hasn't established a market niche for itself.

My goal is a riskless rise in total wealth. I want a gain in coins. I wouldn't compare it with hedging, because I own the real assets. Hedging is like an insurance or option on an asset. I don't need this, because contrarian trading is doing the risk balance automatically.

It's on your choice to take another target balance, perhaps 80% in BTC and 20% in PPC. This makes the calculation moderately more sophisticated.

Quote from: calian on October 02, 2013, 09:17:12 am

I'll be interested if your strategy could result in a long term increase in absolute quantity of both types of currency.

The contrarian strategy makes this impossible. I can buy the falling asset, and sell the rising one. You can see the movement of my two assets, BTC balance is rising, PPC balance is dropping.

If you own gold and it rises heavily, you should sell all or part of the gain of your gold. Nobody expects you to hold more gold even after a heavy price increase, but for you are a gamer.

whifmoi · « **Reply #8 on:** October 02, 2013, 10:58:29 am »

An increase in wealth of nearly 0.6% (2013-10-01 19:46:40) is incredible high for a contrarian strategy for one day only. It's due to the massive spikes in both directions that we have seen.

If I had waited on the price jump before selling PPC against a wall, my gain would be much higher. But I do not predict anything, and I have not foreseen it.

MUTO · « **Reply #9 on:** October 02, 2013, 01:14:38 pm »

Hi whifmoi, your strategy is very interesting. What's your indicator to go out of a currency completely? Or, when do you stop your investment? Is there some point you whould say: That's enough, I don't see more potenital (for example in PPC) I will invest in "whatever"?

whifmoi · « **Reply #10 on:** October 02, 2013, 01:42:22 pm »

Quote from: MUTO on October 02, 2013, 01:14:38 pm

Hi whifmoi, your strategy is very interesting. What's your indicator to go out of a currency completely? Or, when do you stop your investment? Is there some point you whould say: That's enough, I don't see more potenital (for example in PPC) I will invest in "whatever"?

At this time my internal spot price is:

InternalSpot = BTC_Balance / PPC_Balance = 4.24470327 BTC / 1613.40056245 PPC = 0.00263

This simple calc tells me, I can buy PPC below 0.00263, and sell some PPC over 0.00263.

If you have a dozen different assets, you can sell your gain as a maximum, or buy the descend as a maximum. Waiting on large jumps is more profitable. In this special case with only two assets half of your gain can be sold, or half of your descent can be bought.

I never go out of an asset completely, that I believe in. It's always a compromise.

I see a potential in PPC, but not in the sense you and most others think of it. I think of it as a useful tool to help people to move payments easily all over the world. The gain in price is simply lucky, and I have to spread the gain in one asset to my other assets to reduce risk. Because it can come to a sudden end as any other asset can do also.

mhps · « **Reply #11 on:** October 02, 2013, 04:30:34 pm »

Quote from: whifmoi on October 01, 2013, 10:07:18 am

My constraint does not mean, that you must invest, you can wait as long as you want, and clarify the situation. But you must not run with the herd.

That is where the slippery slope is. Sometimes the price of an asset can go down and down for years. Usually at these times there are all sort of stories, theories, evidences, and real possibility that the price will never go up again, or worse, that the asset will go bust. How can you objectively make a judgement to hang on or to stop loss (which probably would look like a "run with the herd" because the herd have been leaving due the reason you are to accept). BTC is less than 5 years old. PPC is even younger. These are high risk assets.
The contratian method has its place. I have been using a slightly different one between BTC and LTC and telling people about it. However one has to understand the risk with this method.

whifmoi · « **Reply #12 on:** October 03, 2013, 06:43:43 pm »

Next day has gone, my gain in coins is 0.469%. This is a very surprising rise to me, because I missed to place the sell orders up to 0.003, where the last spike finished.

Please be patient, I will answer every question. Need some time to express my thoughts in a comprehensible fashion.

whifmoi · « **Reply #13 on:** October 03, 2013, 10:07:55 pm »

Quote from: mhps on October 02, 2013, 04:30:34 pm

That is where the slippery slope is. Sometimes the price of an asset can go down and down for years. Usually at these times there are all sort of stories, theories, evidences, and real possibility that the price will never go up again, or worse, that the asset will go bust. How can you objectively make a judgement to hang on or to stop loss (which probably would look like a "run with the herd" because the herd have been leaving due the reason you are to accept).

Sounds like you speak of gold. There are rumors that gold is manipulated down.

I don't know, but it's possible. Manipulation can last years, we don't know when it stops. If you sell your gold on falling price, they've got you. This long lasting manipulation is the reason of why someone has to spread his assets. No more than 10% into one asset. One has to wait this long time before selling his low priced gold, manipulation will fail at some time. And if it fails, the jump into the opposite direction can be excessively.

With gold it's the same as with other real assets: I think about a buy after a panic sell, I can wait even longer if I want.

whifmoi · « **Reply #14 on:** October 03, 2013, 10:23:12 pm »

Quote from: mhps on October 02, 2013, 04:30:34 pm

... How can you objectively make a judgement to hang on or to stop loss (which probably would look like a "run with the herd" because the herd have been leaving due the reason you are to accept). ...

Objectively I can not make a judgement on how the exchange rate will develop, but for I'm an insider. This is the reason I do not use stop loss, because I stick to the price of my limit order.

This becomes even more important with buying/selling company shares or investment fonds. Because I do not anticipate the price movement, I cannot set a stop loss. I expect that I have to reinvest in about 50% of all executed stop loss orders, so my loss is 50% of fees and spread at least. It's for sure a win to banksters, and I will not support them. The only orders I use are limit orders.

whifmoi · « **Reply #15 on:** October 03, 2013, 11:36:22 pm »

Quote from: mhps on October 02, 2013, 04:30:34 pm

... How can you objectively make a judgement to hang on or to stop loss (which probably would look like a "run with the herd" because the herd have been leaving due the reason you are to accept). ...

... However one has to understand the risk with this method.

There are no risks on exchange rate movement, if you believe in the merit of your assets. I now explain why.

In my lesson above with the two assets Bitcoin and Peercoin, you own 10 BTC and 5000 PPC at an exchange rate of 0.002 BTC/PPC. After some time the exchange rate suddenly drops to 0.001 BTC/PPC.
a) If you believe in BTC only your wealth dropped
b) If you believe in PPC only your wealth increased
c) If you believe into BTC and PPC nothing changed

For payments there are ounces of gold and silver only, and you own 10 ounces of gold and 500 ounces of silver at an exchange rate of 0.02 gold ounce/silver ounce. After some time the exchange rate suddenly drops to 0.01 gold ounce/silver ounce.
a) If you believe in gold only your wealth dropped
b) If you believe in silver only your wealth increased
c) If you believe into gold and silver nothing changed

For savings you own 1000 USD and 100 shares from the Intel company at an exchange rate of 10 USD/Intel share. After some time the exchange rate suddenly drops to 5 Intel share/USD.
a) If you believe in USD only your wealth dropped
b) If you believe in Intel shares only your wealth increased
c) If you believe into USD and Intel shares nothing changed

Please do not answer impulsively, take your time to think about it. This makes it absolutely unnecessary to set stop loss limits, if you believe in both assets. And you should only own valuable assets, that you really believe in.

I have read these days that the cash of Warren Buffet is 60 billion USD. A few years ago it was 40 billion USD. Probably he does not think this radically as me, but the result is the same. Take the gain of the rising company shares (distribute assets) and wait on the next crash. Bitcoin movement learnt me that downwards is as good as upwards.

whifmoi · « **Reply #16 on:** October 03, 2013, 11:44:53 pm »

MAKE THIS PPC BUYER ON VIRCUREX A FAIR PRICE PLEEEEEEEEEEEEEEEEASE!

whifmoi · « **Reply #17 on:** October 04, 2013, 09:23:51 pm »

I ran out of space on my second post, so I continue here.

My Trades

Date Time Type PPC_Quantity BTC_Price BTC_Balance PPC_Balance Spot BTC_weight PPC_weight 2013-10-04 00:09:47 sell 7.00000000 0.00242900 2013-10-04 00:09:48 sell 7.00000000 0.00244900 4.09354413 1706.53960440 0.00240 50.0% 50.0% 2013-10-04 01:08:08 sell 7.00000000 0.00246900 2013-10-04 01:08:13 sell 6.63992000 0.00248900 2013-10-04 01:58:30 sell 0.36008000 0.00248900 2013-10-04 01:58:36 sell 7.00000000 0.00250900 2013-10-04 02:01:07 sell 7.00000000 0.00252900 2013-10-04 02:02:53 sell 7.00000000 0.00254900 4.18118352 1671.53960440 0.00255 49.5% 50.5% 2013-10-04 03:52:23 sell 7.00000000 0.00256900 2013-10-04 03:52:24 sell 7.00000000 0.00258900 2013-10-04 03:52:30 sell 7.00000000 0.00260900 2013-10-04 04:00:39 sell 6.99950000 0.00262900 2013-10-04 04:01:50 sell 7.00000000 0.00264900 2013-10-04 04:08:26 sell 7.00000000 0.00266900 2013-10-04 07:50:52 sell 7.00000000 0.00268900 2013-10-04 07:51:10 sell 7.00000000 0.00270900 2013-10-04 08:10:36 sell 7.00000000 0.00272900 2013-10-04 08:10:36 sell 6.15897935 0.00274900 2013-10-04 08:11:10 sell 0.84102065 0.00274900 2013-10-04 08:11:10 sell 7.00000000 0.00276900 2013-10-04 08:14:53 sell 7.00000000 0.00278900 2013-10-04 08:18:04 sell 7.00000000 0.00280900 2013-10-04 08:18:05 sell 6.70000000 0.00282900 2013-10-04 08:19:08 sell 0.30000000 0.00282900 4.44515528 1573.54010440 0.00274 50.8% 49.2% 2013-10-04 09:11:37 buy 9.90000000 0.00270100 2013-10-04 09:11:37 buy 9.90000000 0.00267100 2013-10-04 09:11:37 buy 9.90000000 0.00264100 2013-10-04 09:11:37 buy 9.90000000 0.00261100 4.33997768 1613.06090440 0.00273 49.6% 50.4% 2013-10-04 09:37:41 sell 9.00000000 0.00278900 2013-10-04 09:37:41 sell 9.00000000 0.00281900 2013-10-04 09:38:51 sell 9.00000000 0.00284900 2013-10-04 09:38:52 sell 7.00000000 0.00286900 4.43598130 1579.06090440 0.00283 49.8% 50.2% 2013-10-04 09:50:55 sell 7.00000000 0.00288900 2013-10-04 10:16:01 sell 7.00000000 0.00290900 2013-10-04 10:16:01 sell 7.00000000 0.00292900 2013-10-04 10:30:26 sell 7.00000000 0.00294900 2013-10-04 10:30:26 sell 7.00000000 0.00296900 2013-10-04 10:52:38 sell 7.00000000 0.00298900 2013-10-04 10:54:12 sell 9.00000000 0.00302900 2013-10-04 10:55:25 sell 9.00000000 0.00305900 2013-10-04 10:55:25 sell 9.00000000 0.00308900 2013-10-04 10:55:26 sell 9.00000000 0.00311900 4.66961514 1501.06090440 0.00312 49.9% 50.1% 2013-10-04 13:56:47 sell 9.00000000 0.00317900 2013-10-04 14:02:41 sell 9.00000000 0.00320900 2013-10-04 14:03:54 sell 9.00000000 0.00323900 2013-10-04 14:06:32 sell 9.00000000 0.00326900 2013-10-04 14:06:32 sell 9.00000000 0.00329900 2013-10-04 14:07:17 sell 9.00000000 0.00332900 2013-10-04 14:14:18 sell 9.00000000 0.00335900 2013-10-04 14:14:18 sell 9.00000000 0.00338900 2013-10-04 14:14:19 sell 9.00000000 0.00341900 4.93629972 1420.06090440 0.00345 50.2% 49.8% 2013-10-04 17:37:26 buy 9.90000000 0.00307100 2013-10-04 17:39:49 buy 9.88010000 0.00305100 2013-10-04 17:40:06 buy 9.87880239 0.00303100 4.84580999 1449.66048899 0.00345 49.2% 50.8% 2013-10-04 22:15:20 sell 9.00000000 0.00341900 2013-10-04 22:15:25 sell 9.00000000 0.00344900 2013-10-04 22:23:38 sell 9.00000000 0.00347900 2013-10-04 23:16:13 sell 9.00000000 0.00350900 2013-10-04 23:16:13 sell 9.00000000 0.00353900 2013-10-04 23:16:13 sell 9.00000000 0.00356900 2013-10-04 23:16:13 sell 9.00000000 0.00359900 2013-10-04 23:24:37 sell 9.90000000 0.00363900 2013-10-04 23:24:37 sell 9.90000000 0.00368900 2013-10-04 23:24:37 sell 9.90000000 0.00373900 2013-10-04 23:37:39 sell 9.90000000 0.00378900 2013-10-04 23:58:20 sell 9.90000000 0.00383900 5.25114522 1337.16048899 0.00400 49.5% 50.5%

Date Time Type PPC_Quantity BTC_Price BTC_Balance PPC_Balance Spot BTC_weight PPC_weight 2013-10-05 00:53:55 buy 9.89990000 0.00351100 2013-10-05 00:54:25 buy 9.90000000 0.00346100 2013-10-05 00:54:30 buy 9.80497000 0.00341100 2013-10-05 00:54:54 buy 0.09503000 0.00341100 2013-10-05 00:54:55 buy 9.87991000 0.00336100 2013-10-05 00:55:22 buy 9.88010000 0.00331100 2013-10-05 00:55:47 buy 9.88010000 0.00326100 2013-10-05 00:56:08 buy 9.82480648 0.00321100 2013-10-05 00:56:51 buy 0.07519352 0.00321100 2013-10-05 00:56:51 buy 9.86014648 0.00316100 4.98725870 1416.10244517 0.00390 47.5% 52.5% 2013-10-05 01:11:43 buy 9.83498104 0.00341100 2013-10-05 01:12:58 buy 0.06501896 0.00341100 2013-10-05 01:12:58 buy 9.87997104 0.00336100 2013-10-05 01:15:55 buy 9.90000000 0.00331100 2013-10-05 01:36:59 buy 9.81782000 0.00321100 2013-10-05 01:37:25 buy 0.08218000 0.00321100 2013-10-05 01:37:26 buy 9.87993000 0.00316100 2013-10-05 02:14:58 buy 9.90000000 0.00311100 2013-10-05 02:15:06 buy 9.90000000 0.00306100 2013-10-05 02:19:15 buy 9.90000000 0.00301100 4.73357329 1495.10402642 0.00305 50.9% 49.1% 2013-10-05 03:23:00 sell 8.99990000 0.00338900 2013-10-05 03:24:42 sell 1.86236000 0.00343900 2013-10-05 03:24:59 sell 7.13764000 0.00343900 2013-10-05 03:25:53 sell 9.00000000 0.00348900 2013-10-05 03:26:30 sell 8.99990000 0.00353900 2013-10-05 03:27:13 sell 9.00000000 0.00358900 2013-10-05 03:27:37 sell 9.00000000 0.00363900 2013-10-05 03:29:46 sell 9.00000000 0.00368900 2013-10-05 03:30:23 sell 1.06521000 0.00373900 2013-10-05 03:32:30 sell 7.93479000 0.00373900 2013-10-05 03:32:34 sell 7.93661000 0.00378900 5.01967906 1415.16761642 0.00370 48.9% 51.1% 2013-10-05 03:33:09 sell 1.06339000 0.00378900 2013-10-05 04:07:37 buy 9.90000000 0.00346100 2013-10-05 04:10:49 buy 9.90000000 0.00341100 2013-10-05 04:13:28 buy 9.82059031 0.00336100 2013-10-05 04:16:23 buy 9.90000000 0.00331100 2013-10-05 05:01:36 buy 9.88010000 0.00326100 2013-10-05 06:44:19 sell 7.99990000 0.00338900 2013-10-05 08:14:09 sell 8.00000000 0.00343900 2013-10-05 08:21:17 sell 8.00000000 0.00348900 2013-10-05 08:21:34 sell 8.00000000 0.00353900 2013-10-05 08:26:47 sell 9.00000000 0.00368900 2013-10-05 08:27:02 sell 9.00000000 0.00373900 2013-10-05 08:46:17 sell 8.00000000 0.00368900 2013-10-05 09:40:30 buy 9.90000000 0.00351100 2013-10-05 09:41:58 buy 9.90000000 0.00346100 2013-10-05 09:42:03 buy 9.90000000 0.00341100 2013-10-05 09:55:46 sell 8.00000000 0.00358900 2013-10-05 09:57:03 sell 7.20140000 0.00363900 2013-10-05 09:57:25 sell 0.79860000 0.00363900 2013-10-05 09:57:40 sell 8.00000000 0.00368900 5.04882938 1411.04681535 0.00370 49.2% 50.8% 2013-10-05 10:26:42 sell 8.00000000 0.00368900 2013-10-05 10:31:30 sell 8.00000000 0.00373900 2013-10-05 12:18:48 buy 9.32497000 0.00356100 2013-10-05 12:22:36 buy 0.51762056 0.00356100 2013-10-05 12:22:44 buy 0.05740944 0.00356100 2013-10-05 12:22:44 buy 9.90000000 0.00351100 2013-10-05 12:25:36 buy 5.54290775 0.00346100 2013-10-05 12:27:36 buy 4.34828000 0.00346100 2013-10-05 12:34:30 buy 9.82147414 0.00341100 2013-10-05 12:35:20 buy 0.07852586 0.00341100 2013-10-05 12:35:20 buy 9.87994414 0.00336100 2013-10-05 13:17:29 sell 8.00000000 0.00378900 2013-10-05 13:39:44 sell 8.00000000 0.00383900 2013-10-05 13:39:44 sell 9.00000000 0.00388900 5.03274595 1419.41900501 0.00370 48.9% 51.1% 2013-10-05 13:59:04 sell 8.00000000 0.00368900 2013-10-05 13:59:42 sell 8.00000000 0.00373900 2013-10-05 13:59:42 sell 1.43646726 0.00378900 2013-10-05 13:59:59 sell 6.56353274 0.00378900 2013-10-05 13:59:59 sell 3.47010939 0.00383900 2013-10-05 15:00:08 sell 9.00000000 0.00398900 2013-10-05 15:03:44 sell 9.00000000 0.00403900 2013-10-05 15:22:35 sell 8.99990000 0.00408900 2013-10-05 18:02:07 buy 9.90000000 0.00371100 2013-10-05 18:03:16 buy 9.89990000 0.00366100 2013-10-05 18:03:31 buy 8.93697068 0.00361100 2013-10-05 20:29:10 buy 0.90236021 0.00361100 2013-10-05 20:59:14 buy 0.06066911 0.00361100 2013-10-05 20:59:14 buy 0.76019924 0.00356100 2013-10-05 20:59:45 buy 9.13980076 0.00356100 5.10044687 1404.46969584 0.00360 50.2% 49.8% 2013-10-05 22:35:53 buy 9.90000000 0.00356100 2013-10-05 23:39:36 buy 1.80041814 0.00351100 2013-10-05 23:39:52 buy 8.09958186 0.00351100 2013-10-05 23:43:27 buy 9.90000000 0.00346100 4.99617018 1434.11029585 0.00345 50.2% 49.8%

Date Time Type PPC_Quantity BTC_Price BTC_Balance PPC_Balance Spot BTC_weight PPC_weight 2013-10-06 01:37:09 sell 8.00000000 0.00358900 2013-10-06 03:20:08 sell 8.00000000 0.00363900 2013-10-06 03:20:25 sell 8.00000000 0.00368900 2013-10-06 04:51:01 sell 7.99990000 0.00373900 2013-10-06 05:22:49 sell 7.97912000 0.00378900 2013-10-06 10:37:28 sell 6.00000000 0.00378900 2013-10-06 12:19:22 sell 2.00000000 0.00378900 2013-10-06 13:08:43 sell 8.00000000 0.00383900 5.20425771 1378.13127585 0.00380 49.8% 50.2% 2013-10-06 16:14:09 buy 9.90000000 0.00366100 2013-10-06 16:14:09 buy 9.90000000 0.00361100 2013-10-06 16:14:09 buy 9.90000000 0.00356100 2013-10-06 16:14:15 buy 9.90000000 0.00351100 2013-10-06 16:23:10 buy 5.69274102 0.00346100 2013-10-06 16:28:13 buy 4.20725898 0.00346100 2013-10-06 16:28:13 buy 9.90000000 0.00341100 2013-10-06 16:34:47 buy 9.88010000 0.00336100 2013-10-06 16:37:09 buy 9.88010000 0.00331100 2013-10-06 16:43:12 sell 8.00000000 0.00363900 2013-10-06 17:09:46 sell 8.00000000 0.00358900 2013-10-06 17:22:56 sell 8.00000000 0.00358900 2013-10-06 17:24:01 sell 8.00000000 0.00363900 2013-10-06 17:27:46 sell 8.00000000 0.00368900 2013-10-06 18:20:15 buy 9.88010000 0.00346100 2013-10-06 18:36:23 sell 8.00000000 0.00363900 2013-10-06 18:36:27 sell 8.00000000 0.00368900 2013-10-06 18:36:33 sell 8.00000000 0.00373900 5.12733292 1402.99349526 0.00365 50.0% 50.0% 2013-10-06 20:50:35 buy 9.90000000 0.00356100 2013-10-06 23:33:47 buy 0.10000000 0.00359877 5.09171915 1412.97349526 0.00355 50.4% 49.6%

Date Time Type PPC_Quantity BTC_Price BTC_Balance PPC_Balance Spot BTC_weight PPC_weight 2013-10-06 23:33:47 exit - - 5.09171915 1412.97349526 0.00355 50.4% 49.6%

My Wealth
Because I have no preference for one coin, have no preference for any real asset I own, I will calculate my inital wealth and intermittent wealth in both PPC and BTC. And no, Dollars or Euros are no assets for me, there's no reason why I should calculate the wealth in fiat money. Looks good, but makes no sense.
Date Time BTC_Balance PPC_Balance Spot BTC_wealth PPC_wealth gain 2013-09-29 01:57:46 4.93166438 1155.82162320 0.00180 7.01214330 3895.63516764 - 2013-09-29 21:03:36 3.73659314 1802.02271033 0.00192 7.19647674 3748.16497075 2.324% 2013-09-30 18:11:10 3.82984372 1763.68924129 0.00215 7.62177559 3545.01190176 0.206% 2013-10-01 19:46:40 3.97725437 1719.51428627 0.00240 8.10408866 3376.70360710 0.598% 2013-10-02 23:35:57 4.00221177 1724.93960439 0.00240 8.14206682 3392.52784189 0.469% 2013-10-03 16:35:12 4.05946641 1720.53960440 0.00240 8.22283918 3426.18299190 0.992% 2013-10-04 23:58:20 5.25114522 1337.16048899 0.00400 10.59978718 2649.94679399 -0,367% 2013-10-05 23:43:27 4.99617018 1434.11029585 0.00345 9.94385070 2882.27556541 1,038% 2013-10-06 23:33:47 5.09171915 1412.97349526 0.00355 10.10777506 2847.26057977 0.215%

whifmoi · « **Reply #18 on:** October 05, 2013, 10:58:45 am »

Hey, what's that, a negative gain for the last day! How did this happen?

There have been no spikes, that I could profit from. Instead there was a long run up (for PPC, down for BTC), that I sold my PPC all the time. So I've got no gain from this, the worst case scenario is a gain of 0 with this strategy. Why is the gain negative?

a) It can happen if oneself miscalculates the maximum amounts to sell or to buy. This way oneself violates the riskless strategy. It happened to me the way up, where I sold too much of my PPC. It's better to underestimate the amount to sell or buy.

b) I yet don't know if my calc of the gain is accurate enough. With the huge increase of the exchange rate from 0.00240 to 0.00400 between the two days, my calc could be insufficient. I expect for this next day a readjustment of the gain on a high positive level again, because I did some contrarian trades already.

whifmoi · « **Reply #19 on:** October 06, 2013, 09:07:14 am »

My lesson will last for the next 24 hours, then I will finish this. Discussion persists.

Again and again we are seeing this walls. Some of them seems honestly, until they are countervailed. Others are jumping around like clowns. Don't panic, do not permit this to influence your strategy. I had to buy against a wall to balance my assats again, see timestamp 2013-10-03 16:35:12 and the panic buy before.

Regardless of gold is manipulated down, and you do not hold some ounces of gold or silver, buy them and hold them. The manipulators perhaps build up something like a huge gold sell wall, but this will not last forever.

To phrase this more theoretically: If you see their walls, but they do not see yours, you have an informational advantage about them. Benefit from it. Sometimes it happened that a wall suddenly jumped in front of my nose, and I had to rebalance my assets.

mhps · « **Reply #20 on:** October 06, 2013, 12:38:53 pm »

Quote from: whifmoi on October 03, 2013, 11:36:22 pm

Quote from: mhps on October 02, 2013, 04:30:34 pm

... How can you objectively make a judgement to hang on or to stop loss (which probably would look like a "run with the herd" because the herd have been leaving due the reason you are to accept). ...

... However one has to understand the risk with this method.

There are no risks on exchange rate movement, if you believe in the merit of your assets.

You do have to assume that your assets will have a certain price belavior. You will lose your asset totally due to at least one type exchange rate action if you strictly execute your strategy: the exchange rate drops down monotonously and never goes up again. Let's see what happens if the exchange rate of one of your chosen coin, coin A, loses 50% against the other coin (coin B) you choose every year.
In year 0 The exchange rate between the coins is 1. You have 50 coin A, 50 coin B. You want to keep the asset allocation 50%-50% between coin A and coin B. Your total asset is 100 in unit of coin B.
In year 1 you have 25 coin B worth of coin A and 50 coin B and you rebalance to sell B and buy A so that you have 37.5 coin A (in unit of coin B) and 37.5 coin B. Your total asset is 75 in unit of coin B.
In year 2 you have 18.75 coin A (in unit of coin B) and 37.5 coin B and you rebalance to sell B and buy A so that you have 28.125 coin A and 28.125 coin B. Your total asset is 56.25 in unit of coin B.
This is what happens to your assets ( in unit of coin B) in the following years round to 1 decimal digit

Code: [Select]

year,  A-before-rebalance, B-before-rebalance, A-after-rebalance,  B-after-rebalance, total asset

                        00 50.0 50.0 50.0 50.0 100.0

                        01 25.0 50.0 37.5 37.5 75.0

                        02 18.8 37.5 28.1 28.1 56.3

                        03 14.1 28.1 21.1 21.1 42.2

                        04 10.5 21.1 15.8 15.8 31.6

                        05 07.9 15.8 11.9 11.9 23.7

                        06 05.9 11.9 08.9 08.9 17.8

                        07 04.4 08.9 06.7 06.7 13.3

                        08 03.3 06.7 05.0 05.0 10.0

                        09 02.5 05.0 03.8 03.8 07.5

                        10 01.9 03.8 02.8 02.8 05.6

                        11 01.4 02.8 02.1 02.1 04.2

                        12 01.1 02.1 01.6 01.6 03.2

                        13 00.8 01.6 01.2 01.2 02.4

                        14 00.6 01.2 00.9 00.9 01.8

                        15 00.4 00.9 00.7 00.7 01.3

                        16  00.3 00.7 00.5 00.5 01.0

                        17 00.3 00.5 00.4 00.4 00.8

                        18 00.2 00.4 00.3 00.3 00.6

                        19 00.1 00.3 00.2 00.2 00.4

Essentially you will lose all your asset unless you bail (or stop loss) at some point. Given that cryptocurrencies have less than 5 years survival experience under their belt, It's very likely that any one of the coins will lose its popularity, hence price, due to technical or social reasons.

edit: typo

whifmoi · « **Reply #21 on:** October 06, 2013, 10:51:52 pm »

Quote from: mhps on October 06, 2013, 12:38:53 pm

Quote from: whifmoi on October 03, 2013, 11:36:22 pm

Quote from: mhps on October 02, 2013, 04:30:34 pm

... How can you objectively make a judgement to hang on or to stop loss (which probably would look like a "run with the herd" because the herd have been leaving due the reason you are to accept). ...

... However one has to understand the risk with this method.

There are no risks on exchange rate movement, if you believe in the merit of your assets.

You do have to assume that your assets will have a certain price belavior. You will lose your asset totally due to at least one type exchange rate action if you strictly execute your strategy: the exchange rate drops down monotonously and never goes up again. Let's see what happens if the exchange rate of one of your chosen coin, coin A, loses 50% against the other coin (coin B) you choose every year.
In year 0 The exchange rate between the coins is 1. You have 50 coin A, 50 coin B. You want to keep the asset allocation 50%-50% between coin A and coin B. Your total asset is 100 in unit of coin B.
In year 1 you have 25 coin B worth of coin A and 50 coin B and you rebalance to sell B and buy A so that you have 37.5 coin A (in unit of coin B) and 37.5 coin B. Your total asset is 75 in unit of coin B.
In year 2 you have 18.75 coin A (in unit of coin B) and 37.5 coin B and you rebalance to sell B and buy A so that you have 28.125 coin A and 28.125 coin B. Your total asset is 56.25 in unit of coin B.
This is what happens to your assets ( in unit of coin B) in the following years round to 1 decimal digit

Code: [Select]
year, A-before-rebalance, B-before-rebalance, A-after-rebalance, B-after-rebalance, total asset 00 50.0 50.0 50.0 50.0 100.0 01 25.0 50.0 37.5 37.5 75.0 02 18.8 37.5 28.1 28.1 56.3 03 14.1 28.1 21.1 21.1 42.2 04 10.5 21.1 15.8 15.8 31.6 05 07.9 15.8 11.9 11.9 23.7 06 05.9 11.9 08.9 08.9 17.8 07 04.4 08.9 06.7 06.7 13.3 08 03.3 06.7 05.0 05.0 10.0 09 02.5 05.0 03.8 03.8 07.5 10 01.9 03.8 02.8 02.8 05.6 11 01.4 02.8 02.1 02.1 04.2 12 01.1 02.1 01.6 01.6 03.2 13 00.8 01.6 01.2 01.2 02.4 14 00.6 01.2 00.9 00.9 01.8 15 00.4 00.9 00.7 00.7 01.3 16 00.3 00.7 00.5 00.5 01.0 17 00.3 00.5 00.4 00.4 00.8 18 00.2 00.4 00.3 00.3 00.6 19 00.1 00.3 00.2 00.2 00.4
Essentially you will lose all your asset unless you bail (or stop loss) at some point. Given that cryptocurrencies have less than 5 years survival experience under their belt, It's very likely that any one of the coins will lose its popularity, hence price, due to technical or social reasons.

edit: typo

I not yet got your description in total, but I believe, you asume a drop in the value of A. Why do you not think about a rise in the value of B?

whifmoi · « **Reply #22 on:** October 06, 2013, 11:12:17 pm »

I would calculate it like this:

Quote from: mhps on October 06, 2013, 12:38:53 pm

Code: [Select]
year, A-before-rebalance, B-before-rebalance, A-after-rebalance, B-after-rebalance, total asset in A, total asset in B 00 50.0 50.0 50.0 50.0 100.0 100.0 01 50.0 50.0 75.0 37.5 150.0 75.0 02 75.0 37.5 112.5 28.125 225.0 56.25 ...

whifmoi · « **Reply #23 on:** October 07, 2013, 08:12:10 am »

I finish my lessen now, with much more success I expected. The average of the gain over the last 7 days is 0.437% for every day. I did not include the first day here, because I had to invest higher amounts for firstly balancing my assets.

The massive volatility on btc-e last night improved my result. But my gain last day was lower as I expected, because the volatility on vircurex was much lower. Any other contrarians here, that are my only competitors?

Nothing changed on the characteristics and quality of Peercoins, so this massive dump is simply destroying his own wealth. Remind a PPCoin stays a PPCoin independently of its exchange rate. You loose nothing if you do not trade anything, your wealth stays the same. The trade essentially does change your wealth: buy low/sell high you have a loss, buy low/sell high you have a gain. This contrarian constraint explained herein forces you to withstand greed an panic. If you follow it, worst case is mean gain of 0.

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Author Topic: Lesson: Contrarian Trading (Read 456 times)