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Are You Trading or Gambling?

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Re: Are You Trading or Gambling?

#391

Post by xwdv »

benibela wrote: post #381
xwdv wrote: post #234

I didn’t start making massive amounts of money in trading until I realized a simple concept: Don’t take risks, make them. Essentially you provide an opportunity for others to take risky gambles and profit when they lose. So now I sell way OTM option contracts and make great consistent money. Sure a pro day trader might make more, but I make consistent money and with much less skill or accuracy required. And I still b…

I have started doing that as well this month with CSP But the disadvantage is the limited upside. If you just buy the stock, you could have unlimited profit if the price goes to the moon, but the option only gives 1%. And you could still lose everything, if the price goes to zero

I wouldn’t advise CSPs over holding stock. Hold stock and sell covered calls.

Only sell CSPS on down days below key support points in price. Back your CSPs using your margin power so your not tying up capital and have 100% equity investment in stocks, so you only go into margin if your CSP is assigned, and then you can just sell it off when the price recovers above cost basis, only costing you the interest of your margin loan amount per day. You could sell covered calls as well while it goes up to cover the margin interest payments.

Re: Are You Trading or Gambling?

#392

Post by rjbwork »

criticaljudge wrote: post #369
rjbwork wrote: post #356

Earlier quoted context omitted.

I don't really want to get into it here, but your first example is pretty disingenuous. AFAIK the assertion is not that "all labor creates value" but that "all value derives from labor". There is a difference in those assertions and you should at least be willing to steelman the position of someone you disagree with.

Which one do you mean? It is true that owning stock does not entitle you to labor of a company of employees. Paying wages does. And the "value theory of labor" states that the value of labor is determined by how hard the work is. So why should I not be paid for digging a hole in front of your door? If you say you didn't want that hole to begin with, we are veering into "people should only pay for what they want", and…

Like I said I really don't want to get into this here, but I really would suggest reading more into this stuff, as you do seem to me to have a number of misconceptions about LTV.

Re: Are You Trading or Gambling?

#393

Post by atleta »

benibela wrote: post #380
atleta wrote: post #379

Earlier quoted context omitted.

If a lot of people will start running it, it will lose profitability (assuming it is profitable now). The same software acting on the same set of signals means the signals will be cleared pretty quickly.

This guy said TA has no meaning, it only works because other people think it works: https://news.ycombinator.com/item?id=26286655 In that sense, the more people would use the software, the more profitable it becomes. The software thinks the price of some stock will increase, so it buys the stock. If more people use the software, more will buy the stock, so the price rise even faster

Yep, I almost wanted to add that as well. TA doesn't work and I think this has been (kind of) proven. Though if you look into it just superficially, you'll see that it's a total sham/self deception.

However, it does not mean that the system we're talking about would create a positive feedback loop. (And, if it would, that would probably also be bad and just waiting to be exploited by some other players.) Because even if TA is fake, IF their system works they somehow have an algorithm that works that may to some extent be based on some indicators. (BTW, looking at the comment it's not clear that they simply use TA. The guy just said "spent a month researching technical indicators and quantitative analysis,".)

The thing is that, based on what they said is that it's some tunable algorithm that tries to extract some information. And even if TA worked (which I don't think it does) acting on those formations would still erase the signal or the usefullness of the signal, because when someone uses TA looking for these random shapes, they still try to predict the future and act ahead of the others.

Re: Are You Trading or Gambling?

#394

Post by criticaljudge »

rjbwork wrote: post #392
criticaljudge wrote: post #369

Earlier quoted context omitted.

Which one do you mean? It is true that owning stock does not entitle you to labor of a company of employees. Paying wages does. And the "value theory of labor" states that the value of labor is determined by how hard the work is. So why should I not be paid for digging a hole in front of your door? If you say you didn't want that hole to begin with, we are veering into "people should only pay for what they want", and…

Like I said I really don't want to get into this here, but I really would suggest reading more into this stuff, as you do seem to me to have a number of misconceptions about LTV.

Any pointers? I was under the impression that nobody besides socialists takes LTV serious anymore. And I gave some reasons why it doesn't make sense. I haven't heard any counterpoints that make me think investing more time into it would be worthwhile.

Edit: from Wikipedia ( https://en.wikipedia.org/wiki/Labor_theory_of_value ) it seems quite a mess, perhaps a bit like planning economy where they add yet another equation to account for yet another problem, but they can never really capture it all. But at the end of the day, what is it useful for, other than making "worker demands"? Can you use it to compute anything useful? I highly doubt it. In another way it might just be saying "energy determines the price of everything", in archaic terms when energy was mostly "labor".

It seems much more practical and sensible to simply go with market prices.

Re: Are You Trading or Gambling?

#395

Post by aparsons »

tshanmu wrote: post #315
scsilver wrote: post #311

Earlier quoted context omitted.

Religion is just a ponzi scheme that still underpins most of the world's networks and hierarchies.

Care to elaborate? Or you mean christianity? There are quite a few other religions that are quite nice. Buddhism as practiced in Bhutan comes to mind...

Stop trying to incite a religious flame war.

FYI, Buddhist extremism has resulted in two (ongoing) genocides.

Re: Are You Trading or Gambling?

#396

Post by solosoyokaze »

tekknik wrote: post #384
solosoyokaze wrote: post #323

Earlier quoted context omitted.

Hopefully less than in Feb 2021. I think a better question would be, how many BTC will it take to buy a house in 2050? I think the three things that have experienced the most drastic inflation are: housing, healthcare and education. It would be interesting to measure Bitcoin's long term value next to those highly inflating costs. Say a house now costs 10 BTC/$500,000 and in 2050 10 BTC/$2,000,000.

> Hopefully less than in Feb 2021. Financial planning -> window, cause my base currency keeps moving around and won’t hold still long enough for me to even finish the equation.

I'm planning on continued massive USD inflation.

Re: Are You Trading or Gambling?

#397

Post by conanbatt »

tekknik wrote: post #383
conanbatt wrote: post #346

Earlier quoted context omitted.

It needs to have demand to be worth anything at all. At that demand in aggregate assigns value to bitcoin. The fixed emission schedule of BTC means that there is no issuer that can capture increased demand in the good, but the holders of BTC get that benefit. So the only thing you need to bet on is if there will be more aggregate demand for the 21 million btc in the future than there is today. With fiat currencies, w…

> If BTC makes it so the aggregate demand in currencies is split partially from fiat into BTC itself, then it will be a great transfer of wealth from governments into BTC owners. And will quickly be banned by said country.

If this scenario happens, BTC will have demonstrated enormous power and value, and it is supposedly designed precisely to resist such attacks.

I also doubt on the feasibility of a global crackdown on miners in the entire world.

Re: Are You Trading or Gambling?

#398

Post by repartix »

repartix wrote: post #358
orangeoxidation wrote: post #309

Earlier quoted context omitted.

> money With built in and inevitable deflation. Bitcoin could never replace a national currency. With transaction times in the tens of minutes and with a maximal global transaction rate of 5-10 per second. The Blockchain couldn't replace the banking system of single mid-sized town. It's not money. It's at best "digital gold", but more realistically it's just a ponzi scheme.

Advice: only write sentences that are true. > Bitcoin could never replace a national currency. You can't predict the future. > With transaction times in the tens of minutes and with a maximal global transaction rate of 5-10 per second. The Blockchain couldn't replace the banking system of single mid-sized town. With millions of transactions per second, the Lightning network could. > It's not money. It's money. Here's…

To the people who downvoted: learn to distinguish expressing a fact from expressing an opinion. Don't be gratuitously negative.

To HN moderators: make it possible to understand why someone downvoted. This is an example of what makes HN off-putting.

Re: Are You Trading or Gambling?

#399

Post by rjbwork »

criticaljudge wrote: post #394
rjbwork wrote: post #392

Earlier quoted context omitted.

Like I said I really don't want to get into this here, but I really would suggest reading more into this stuff, as you do seem to me to have a number of misconceptions about LTV.

Any pointers? I was under the impression that nobody besides socialists takes LTV serious anymore. And I gave some reasons why it doesn't make sense. I haven't heard any counterpoints that make me think investing more time into it would be worthwhile. Edit: from Wikipedia ( https://en.wikipedia.org/wiki/Labor_theory_of_value ) it seems quite a mess, perhaps a bit like planning economy where they add yet another equat…

Value != price, nor does LTV make said assertion. Things like markets and preferences (time, kind, etc.) help determine price. The assertion of LTV is that all value created is created by labor, as it is the transformative aspect provided by humans of the "Labor + Raw Goods + Means Of Production = Final Product" view of production.

Re: Are You Trading or Gambling?

#400

Post by jameshart »

kqr wrote: post #132
YokoZar wrote: post #26

Earlier quoted context omitted.

> An investor would not really care about the stock, but only about the behavior of other investors. This sounds like the idea of a Keynesian Beauty Contest ( https://en.wikipedia.org/wiki/Keynesian_beauty_contest ) "It is not a case of choosing those [faces] that, to the best of one's judgment, are really the prettiest, nor even those that average opinion genuinely thinks the prettiest. We have reached the third deg…

Exemplified in a competition in -- I think -- The New York Times: readers were instructed to guess a number between 1 and 100, and were told the winning guess would be the one closest to 2/3 of the average guess.

No mention of a NYT version of the game ever happening on the wikipedia article - https://en.wikipedia.org/wiki/Guess_2/3_of_the_average - but that wiki page is a good write up of the basic idea and its relationship to the Keynesian Beauty Contest
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