Trial and Epic Fail

Ventures of an ex indie game developer

Accumulation or whale fight?


PS. Only had to wait 5 minutes to find out:

To bear or to bull, that is the question

If you're using futures or options, you can 'short' or 'buy a put'. This means you're lending someone else's money for a period of time, selling some of the asset, buying the asset back later (hopefully at a lower price), and giving the money back to the lender. I.e. you're making money when an asset price goes down.

My bot can either only short, or only long or do either when it seems promising. Here's how that might look on Bitcoin.

The bear market of 2018 would have been a great time to run a shorting bot. But during the bull market of 2019, 2020 and 2021 (so far) a shorting bot would most likely have lost all the gains from 2018. A bull bot would have made tremendous gains in the last three years, but seemingly have stayed pretty still during 2018.

The reason is that shorting on a retracement during an up-trend is much more difficult than longing a down-trend retracement. I suspect this is true for most assets, not only Bitcoin, but it depends on support vs. resistance patterns.

What does this mean? It probably means that it's low risk to run a (cautious) bull bot at any time. I am not doing that though. As you can see the bear bot has made a slight profit since mid-January 2021. I suspect we're already in the bear market.

How to proceed? Let's make a matrix.

Market  Aggressive bot mode    Cautious bot mode    Safe bot mode  
  Uncertain  BothBullBull

Aha! I like to play aggressive. So the only time I'm going to change profile is when we find ourselves in a steady uptrend. The settings of my bot matters less, the only thing that can make a huge dent is to identify strong up-trends. If I would have realized this in december of 2020, I'd be into the 50x instead of back to break even.

Napoleon 160%

My trading robot is up 160% (2.6x) in the ten days since I predicted the trading range was over. My guess is BTC price is going to wiggle a bit, and probably go down a bit again. Possibly down to 19k or so in a few months before we enter a real bull market to push it up to 100k or so. I thought it would be down to 19k for a few weeks already, but whales have gotten more and better, so movement is slower, and high-frequency trading is a lot harder.

Now over to something more sinister. In Sweden we've gone from almost a murder a week a year ago to almost a murder a day now. My prediction 11 years ago — when the Sweden Democrats (SD) entered parliament, that other parties would go 'Napoleon' and steal the best parts of what the mob wants, and improve on those ideas — were absolutely incorrect. The other parties applied a very Swedish approach and have been hard at work for the past 11 years to isolate the only political party which had some ideas to reduce violent crime.

Now, finally, they've come around to go Napoleon and stealing SD's ideas. But it's too late and too little. I, and many other citizens, feel betrayed by our government and the media establishment. Since I was a kid, 41% immigrants have been added to the population. Most are Europeans, and that's fine. But increasingly we've gotten people from shit-hole countries. Oh, I wish the populace wakes up before the election next year, but it's not looking good. If police could crack down on gangs, immigration authorities would evict the worst 20k immigrants and we could introduce some fairly small changes in the law, life in Sweden would quickly improve. I doubt it though. Swedes seeking Norwegian citizenship is up by 3000%; those Swedes are folks like me that doubt the same.

It's tough to be always right

In the red ellipse I said trading range over in a day or two.

Oooh, the predictions of this guy! ;)

BTC trading range soon over

It seems the worst part of the BTC summer of '21 trading range is over in a matter of days. Prepare to start making moneys again! :)

First principles baloney

There is a lot of talk about understanding, developing or teaching from first principles. So just let us imagine a European medieval erudite. If asked to explain anything from first principles, he'd give a lecture on how God's will is the ever controlling hand of everything that goes on in the (geocentric) world. A highbrow professor of today would reduce everything to matter, and us to robots. Which is a magnitude better, but still ignorant.

For long I thought we already know everything (and just needed to fill in the details). Bacon style. Then I assumed we needed to rethink some basics. Now I think that we can't know everything. Heisenberg style.
“Not only is the universe stranger than we think,
It's stranger than we can think.
The year we make contact, we can gain another magnitude or two. Sometimes I hope this happens in my lifetime, although the repercussions will be horrifying. Otherwise I'll spend the rest of my days in this miserably half-way medieval world-view. But probably better free and ignorant than educated and caged.

Bot trading with Serum

Serum/Tether futures seem like a promising asset to get some starting capital for the high risk bot. Seemingly sound tech too. Twerk (my algo) is up 20% in 20 hours, although price of the asset only has gone up 5% and back down again in that time period.

SRMUSDT wallet growth over the last 20 hours.

We'll see how well it fares in a few weeks. I should set a target when I start reducing risk and testing how big I can go in this tiny currency with my dumb bot. Hmm. Probably already when I've 5x'd I need to slow down. As for now, growth looks pretty smooth though. I'll reach 5x with the current pace in ten days. (Six days if I go all in on 18x leverage, but then I'll probably need to slow down even earlier.)

At the point of 5x'ing my wallet, I figured I'd go back to long-term ETH. But now that I think about it, I could go down in leverage on SRM from my current 10 times to eventually 1:1 and keep on going until I 50x. That would be a lot faster than the much longer term ETH, which is 145 days on average to 10x. So... so the average leverage would be 10? Anyway I'll use the geometric mean as an approximation. That gets me 26 days. With me constantly closing my positions and reducing my leverage. Even if the average leverage would the the fourth root of 10 and the real results are ten times worse (annually), it's doable in 50 days.

That'd be nice! Getting back what I lost in my previous gambles. That's how the whales do it, right?

About the author

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Gothenburg, Sweden