1.
I can understand why some people might want to sell if they think this latest rise is temporary, but being short right now is playing a dangerous game. Everyone has seen how the price of bitcoins can rise hundreds of dollars in an hour. Since there are no limits in how much you can lose with shorting, you could wake up the next day and find that some country made bitcoins their currency and you've just lost your house.
There have been times where the price of bitcoins jumped $100 or more in the course of just one block.
Good luck if you want to try that, but the risk to reward ratio isn't worth it right now.
2.
Likewise, the time for daytrading has also passed. Daytrading can be profitable during the downtrends. There is no strategy to make money during the "struggling" phase. During the "goin' up" phase, I don't know of anyone who has ever made more by daytrading during this part of the cycle than simply by holding and selling close to the top.
3.
In response to yesterday's discussion with /u/moral_agent about selling on the second spike in each bubble cycle, /u/infinite_iteration commented that some people thought the top in the last cycle was the $900 spike during the Senate hearings. He said that if I had sold then, I would have sold too early.
But that logic is flawed. If I had sold during that first frenzy at, say, $700, and put the money aside for 7 months, I would have made more money than by holding, even if I missed the two weeks when the bubble was much higher.
4.
The exchanges we have today are comical. I don't know what other word there is to describe the level of ineptitude there is in the altcoin exchange market. I have a website that is 100% complete and tested, a mining server that is feature-complete and 90% tested, and a trading and exchange system that is in ruins.
What sort of businesses ignore support tickets for seven days and don't even bother to reply when I tell them that I want to integrate a huge mining pool with their services? What CEO ignores the possibility of their making tens of thousands of dollars in profits from a system that makes high-frequency trades in a hundred altcoins? All that I asked was for them to fix a simple bug that basically prevents any serious person from using their APIs.
We wrote a whole backend to use with Vircurex, discovered they were a fractional reserve, and threw it out. Then we rewrote the entire trading server in Cryptsy, and they aren't replying to their support tickets, so we're going to throw it out. That's 150 hours of work wasted out of the 950 devoted to the project.
If there are any exchange operators reading this who actually want to make money, get back to me. I'll even sign an exclusivity contract if I can get some decent support. It would be quite stupid if this huge system failed because I can't find an exchange that has its act together.
5.
The reason for caution with the recent rally is shown in /u/Emocmo's point and figure chart, which has a long pole four high. He expected a crash, but there was none overnight. However, he is rarely wrong, so don't smile yet.
6.
Everyone here is waiting to see what China will do. Myself, I have a few bucks that I will only spend if there is an irrational crash over whatever they try to do next. Otherwise, these funds will be invested in conventional stocks.
For those who are interested, I have about 7% of net worth invested in bitcoins. I wanted to say this so that it is obvious to people that I follow through with what I say and that I'm not just saying it. The actual amount of money I spent on all the bitcoins I've ever purchased is about 2%, the largest portion being purchased on July 6 for $68.50. BitInstant ripped me off and actually charged me $80 a week later, because they said my order was delayed for "verification purposes." That difference now is thousands of dollars. I also purchased some for $262 in April last year.
To those who got here a little late, you probably don't remember what it took to purchase bitcoins "back then" (as in 10 months ago). You drove all the way to Wal-Mart and withdrew the maximum amount the ATM would allow (I still have never withdrawaln that much money from an ATM for any other reason ever) and then walked to the teller and filled out a lot of paperwork. You read through the warnings about scams from sending your money overseas and then handed over the cash and signed the forms. Then, 10 days later, BitInstant maybe delivers your order or maybe refuses it, and you end up paying a 15% premium in driving expenses and fees. And you have to do it again the next day if you want to buy more than the limit.
The only other way to trade was to put money into Mt Gox, but I refused to do that because I feared being unable to withdrawal my bitcoins.
That shows how far we've come since then. While Coinbase's 1% fees are too high for most people, you need to look back and see how things were last year to appreciate the progress made.
7.
Please don't downvote my posts where I say that you can never go wrong making money. Someone was mentioning that he bought at $431 and sold at $455, and people are downvoting that. The #1 rule of trading is **never lose money**. Since when have people become so greedy that they downvote people who make money?
Other
- I slept for 1.5 hours last night. I've never heard more thunderstorms in one night than last night. In fact, there was lightning in the sky at 8:00am, which is so rare I've also never seen it before. I'm not sure if I'm making any sense today because I can barely look at the montor.
- Days until July 24: 65 (For those who don't know, this is the expected date of the crash)