I am sorry to say that but this script is quite laughably naive. It even includes storing your exchange API keys on plain-text on disk. Yum!
Show HN: Bitcoin investing using Dollar Cost Averaging strategy
111–120 of 125 posts
Re: Show HN: Bitcoin investing using Dollar Cost Averaging strategy
#112Earlier quoted context omitted.
Are you sure? Would you bet your money on that? If yes, then I must say that black swans are just around the corner waiting for you.
I think this strategy would be safe to black swans because it would be invested when it's going up tremendously, and out of the market when it drops tremendously. But it would lose all it's value if it just swings up and down slightly over time, as it buys high and sells low.
The whole point of black swans is that you can't predict them. They are equally likely to happen when the market (or a particular security) is going up or when it's going down. I don't see any reason to think you'd be more likely to be out of the market when something unpredictable happens.
Re: Show HN: Bitcoin investing using Dollar Cost Averaging strategy
#113Earlier quoted context omitted.
Is that a joke? Show me the USD swinging as wildly as Bitcoin does in any time frame. There's a reason it's the standard across the world.
I don't believe there is any conceptual correlation between X being a pyramid scheme and the price of X fluctuating wildly. "Pyramid scheme" is an actual term with a fairly widely-understood meaning. It doesn't just mean "any thing I don't like."
A very small minority of people control the vast majority of Bitcoin, it goes from thousands to hundreds over a course of months. All from manipulation by that small minority.
Re: Show HN: Bitcoin investing using Dollar Cost Averaging strategy
#114The re-balancing system (of which dollar averaging is a variant) is described in the Fortune's Formula book [1] as something that Claude Shannon [2] would demonstrate in his lectures at MIT as a mathematically proven guaranteed winning strategy. At the end of the talk there was a Q and A, and the first question always was "do you yourself use this system", to which he replied "Naw, the commissions alone would kill yo…
The transaction fees at Kraken and many other cryptocurrency exchanges are percentage-based, so that issue shouldn't apply here.
It would still apply. Them taking a percent of my money every trade hurts me. Is there any guarantee that my profit per trade is larger than their fee per trade?
Re: Show HN: Bitcoin investing using Dollar Cost Averaging strategy
#115a few years back I made a similar DCA website, you can find it at: https://coinsavers.net
The site has helped me to take the timing anxiety out of buying; it was initially made as a SAAS, but I've abandoned that idea. Please don't sign up with too many ;)
Re: Show HN: Bitcoin investing using Dollar Cost Averaging strategy
#116The re-balancing system (of which dollar averaging is a variant) is described in the Fortune's Formula book [1] as something that Claude Shannon [2] would demonstrate in his lectures at MIT as a mathematically proven guaranteed winning strategy. At the end of the talk there was a Q and A, and the first question always was "do you yourself use this system", to which he replied "Naw, the commissions alone would kill yo…
The transaction fees at Kraken and many other cryptocurrency exchanges are percentage-based, so that issue shouldn't apply here.
Note that Shannon did use the word "alone", implying that commissions is not the only reason why this strategy is not as great as it seems at first. I'm guessing he (being one of the most prominent mathematicians of the 20th century) picked this example exactly because it was a counter-intuitive and complex problem that seems simple on the surface.
Re: Show HN: Bitcoin investing using Dollar Cost Averaging strategy
#117A better approach with an extremely volatile asset like Bitcoin is a simple tactical asset allocation strategy. For example, the following system significantly outperforms both buy-and-hold and dollar-cost averaging strategies. 1. Buy when the monthly price of Bitcoin is greater than its 10-month simple moving average (SMA). 2. Sell (and move to cash) when the monthly price is less than its 10-month SMA. That's it. M…
By "monthly average" you mean "trailing 30 day simple moving average price" and by 10 month you mean "trailing 300 day simple moving average" right? In this case ,this is assuming that when the market shifts from bull to bear you can see it with a 30 day average-- or put another way, it's assuming it moves at a certain speed. When you claim that this "significantly outperforms" is that based on measurements of bitcoi…
> By "monthly average" you mean "trailing 30 day simple moving average price" and by 10 month you mean "trailing 300 day simple moving average" right?
No. The system is only updated once a month, e.g., on the first day of the month. Daily price fluctuations are totally ignored.
Re: Show HN: Bitcoin investing using Dollar Cost Averaging strategy
#118Earlier quoted context omitted.
Yeah that's a good sign that Bitcoin is not an investment its a lottery ticket, or more realistically an entry in a pyramid scheme.
Bitcoin is the first technological form of money. This means it is going thru the normal technology adoption cycle like a high tech startup does, yet its' a form of money. It's a new thing. Every time the user base expands a bit as more people become aware of it, then the price goes up. At the same time, every 4 years the rate of emission is being cut in half... so, more people want bitcoins but there are less new bi…
>It is an investment. With a lottery ticket your odds of winning are very small and you will likely lose almost all the money. With a pyramid scheme, the early entrants are paid with money from the later entrants as part of a scam-- and it's unsustainable-- but bitcoin is perfectly sustainable, it's simply an asset that happens to be appreciating.
I think its pretty clear that the early entrants are getting paid with money from the later entrants. The question left is is BTC sustainable. Etherium shows BTC is easily replaced. Currently yes it is an asset that happens to be appreciating - do you think anyone wants to own it when it starts going down?
Re: Show HN: Bitcoin investing using Dollar Cost Averaging strategy
#119Earlier quoted context omitted.
I don't believe there is any conceptual correlation between X being a pyramid scheme and the price of X fluctuating wildly. "Pyramid scheme" is an actual term with a fairly widely-understood meaning. It doesn't just mean "any thing I don't like."
A very small minority of people control the vast majority of Bitcoin, it goes from thousands to hundreds over a course of months. All from manipulation by that small minority.
There's also a small minority of people that control the vast majority of USD.
A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products or services.
Bitcoin has no such thing.
Re: Show HN: Bitcoin investing using Dollar Cost Averaging strategy
#120Earlier quoted context omitted.
The only state action that poses a huge risk is if Chinese miners totally have >50% of the hashrate and the Chinese government took control of the miners to mess with transactions. Other than that the worst risk is them shutting down all the miners which would mainly just slow down transaction clearance which would drop the price but not catastrophically.
Nope, actually the most significant risk to Bitcoin specifically from the Chinese government would be an effective block of all Bitcoin-related traffic between China and the rest of the world. This would lead to about 50% of mining power being in China and about 50% being outside of China, both "networks" happily continuing to mine blocks (albeit a lot slower) without knowing about each other, thus confirming entirel…
If it's a true 100% partition between the two chains, ie all transaction sources are disjoint (or potentially have enough coin to cover all transactions that exist on both chains) couldn't anyone that's taken actions based on transactions on the losing chain resubmit transactions to the winning chain and they'd eventually get picked up?
(I've not dug into the protocol at a super deep level so I'm not 100% on what protections are in place that might stop this from working given a properly signed transaction.)