Global Macro Trading Journal

Daal · Nov 28, 2017

One thing is for sure, this is a great market to monitor. It should be a important part of any good trader's arsenal, to be able to trade cryptos (both in terms of skill and in terms of having the accounts/addresses/hardware wallets, etc). Almost every morning I go through a list of 80 crypto charts and then make some buy and sell decisions based on it (I care little about the actual fundamentals, only the chart), I suggest other pros to do the same. It doesn't take all that much money in these things to produce some returns, they are naturally very levered. Swing and position trading cryptos have been added to me trading arsenal and I believe it will be a nice supplemental profit center in the coming years, regardless of what happens to BTC

truetype · Nov 28, 2017

Yet another crypto thread. #sad

m22au · Nov 28, 2017

Daal said:
Bitcoin is getting quite close to its top and when that market does turn, its likely to plunge at least 70% from its peak, probably more. I say that even though I'm long some, along with some small coins and alt coins. But I have been banking some profits and rebalancing my positions down. The arrival of BTC futures might very well be the catalyst that will implode this market. "sell the news" as they say. This is the most obvious bubble of all time, anyone who doesn't think its a bubble that is out of control needs to have their head examined.

The sentiment extreme (every news show and media talking about it, heck, even Sitcoms now) along with the price extreme (the price rise has been more extreme than pretty much any bubble in history) and the fact that the product (that is, bitcoin as a money transfer vehicle) is still a joke (the number of US retailers accepting bitcoin went DOWN in 2017 vs 2016 according to Morgan Stanley), transactions havent taken off. You got to pay $2-$5 to transfer money and wait 30 minutes to clear. Which makes it worthless for small purchases. This is a very unproven product. I believe we are at a point where we might see a large surge to the upside that ends in a crash (kinda like Silver in 2011), or we might just implode naturally. I believe the large gains that can come from the mania phase makes it worth it for me to stick around but I will be ready to dump it all when this turns. Furthermore I got a number of hedges in place (I'm currently short XNET and I'm short GBTC against BTC, that is, a spread trade). I plan to put in other hedges in as well (mostly in the blockchain stocks that break their uptrends and start to fade, I will short them). This way, if I wake up and BTC is down $3,000 (a very serious possibility), I got these hedges in and my loss will be limited

BTC is an extremely dangerous market right now for non-pros, people are going to learn their lessons the hard way. I have never seen so many smart people get sucked in into this nonsense. I guess thats why this bubble got so big, it has a very good story.

BTC has had three 85% drops after their past massive surges, I have little doubt there will be another one soon. What happens after the 85% drop is a different question, but its a questions to be dealt with in the future, not now when emotions are high and people can't think rationally. If BTC implodes 90% and then bases out and starts to come back up, sure, I will be a buyer but I don't have to hold through a huge decline to do so. If one day it will go to $100k (which I seriously doubt) it will probably have to go through a big correction first anyway

In reality, LTC is probably a much better product than BTC but even that one will probably implode before it has any chance of rising. Market fundamentals have not changed, price and sentiment extremes tend to be horrible buys, I don't think this will be much different either. Be careful, this is a trader's market, not one to have any strong positions, one way or the other
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Thanks for your thoughts Daal.

I wish I could get some GBTC to short!

How did you manage the position sizing and hedging choices?

Equal coin amounts (eg. long 0.09211978 Bitcoin and long 0.09211978 Bitcoin Gold for each 1 share short of GBTC)? Or equal dollar amounts ($1 long Bitcoin basket (of Bitcoin and Bitcoin Gold) for each $1 short of GBTC)?

Will you be adjusting your hedging once GBTC goes ex-dividend later this week?

.

Daal · Nov 29, 2017

m22au said:
Thanks for your thoughts Daal.

I wish I could get some GBTC to short!

How did you manage the position sizing and hedging choices?

Equal coin amounts (eg. long 0.09211978 Bitcoin and long 0.09211978 Bitcoin Gold for each 1 share short of GBTC)? Or equal dollar amounts ($1 long Bitcoin basket (of Bitcoin and Bitcoin Gold) for each $1 short of GBTC)?

Will you be adjusting your hedging once GBTC goes ex-dividend later this week?

.
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I used equal dollar amounts and I only plan to be short this for one week or maybe two. I figure that if I'm losing money on the spread, I will be making on my own coins and other positions (including intraday trading of GBTC, which I do a lot of. Volality is great for a daytrader)
I'm not sure I need to adjust anything, Bitcoin gold is so small relative to bitcoin that I dont think it will be a big thing. People might ramp GBTC in antecipation of it though, but its so extended that it will offer me some great trading opportunities, I dont mind losing money on the spread

Daal · Nov 29, 2017

Ether went from 500 to 400 in a matter of hours. That's what I'm talking about. I'm glad I have been banking profits, before it 'made sense' to do so. Now, everbody is having the same idea, prices and liquidity is shit (and platforms are going down like crazy, another benefit of selling during good times, the brokers were actually responding). At this point my plan is to sell a little more and put some kind of 'final stop' at $8K on BTC, if it goes bellow that, then I'm done with it and will be looking to take shots shorting it. Above it I will have my last bucket of coins that I will try to trail in case there is one final wave
Kathy perry discussed Bitcoin with Buffett according to reports, if this ain't that top, then what is?

Daal · Nov 29, 2017

And my hedges seem to be working well, XNET imploded. I'm looking to short BTSC now (I did it today but it collapsed to quickly I had to take my profit and run). Perhaps MGTI, or RIOT if I run out of big blockchain runners. The GBTC spread to me seems a done deal that will collapse, as soon as people learn that this market isn't a one way street, it will make no sense paying a 50% premium to BTC with a 2% annual carrying charge. Especially with stuff like BTC futures avaliable. GBTC prices are just plain ridiculous
With these hedges I'm trying to achieve a profit on both sides (that is on BTC and on the hedge side), historically I have done it, and it helps to deal with the volatility in case of a big crash

Daal · Nov 29, 2017

The BTC daily sure looks toppy

I'm looking at that 8000 level as a potential point where one can be certain its game over, either that or today's level at $9,000 where prices recovered. If BTC recoups $11k but loses $9k at some point in the future, at that point I believe I can be certain its all over and I can dump the rest that I got

GloriaBrown · Nov 29, 2017

Daal said:
Bitcoin is getting quite close to its top and when that market does turn, its likely to plunge at least 70% from its peak, probably more. I say that even though I'm long some, along with some small coins and alt coins. But I have been banking some profits and rebalancing my positions down. The arrival of BTC futures might very well be the catalyst that will implode this market. "sell the news" as they say. This is the most obvious bubble of all time, anyone who doesn't think its a bubble that is out of control needs to have their head examined.

The sentiment extreme (every news show and media talking about it, heck, even Sitcoms now) along with the price extreme (the price rise has been more extreme than pretty much any bubble in history) and the fact that the product (that is, bitcoin as a money transfer vehicle) is still a joke (the number of US retailers accepting bitcoin went DOWN in 2017 vs 2016 according to Morgan Stanley), transactions havent taken off. You got to pay $2-$5 to transfer money and wait 30 minutes to clear. Which makes it worthless for small purchases. This is a very unproven product. I believe we are at a point where we might see a large surge to the upside that ends in a crash (kinda like Silver in 2011), or we might just implode naturally. I believe the large gains that can come from the mania phase makes it worth it for me to stick around but I will be ready to dump it all when this turns. Furthermore I got a number of hedges in place (I'm currently short XNET and I'm short GBTC against BTC, that is, a spread trade). I plan to put in other hedges in as well (mostly in the blockchain stocks that break their uptrends and start to fade, I will short them). This way, if I wake up and BTC is down $3,000 (a very serious possibility), I got these hedges in and my loss will be limited

BTC is an extremely dangerous market right now for non-pros, people are going to learn their lessons the hard way. I have never seen so many smart people get sucked in into this nonsense. I guess thats why this bubble got so big, it has a very good story.

BTC has had three 85% drops after their past massive surges, I have little doubt there will be another one soon. What happens after the 85% drop is a different question, but its a questions to be dealt with in the future, not now when emotions are high and people can't think rationally. If BTC implodes 90% and then bases out and starts to come back up, sure, I will be a buyer but I don't have to hold through a huge decline to do so. If one day it will go to $100k (which I seriously doubt) it will probably have to go through a big correction first anyway

In reality, LTC is probably a much better product than BTC but even that one will probably implode before it has any chance of rising. Market fundamentals have not changed, price and sentiment extremes tend to be horrible buys, I don't think this will be much different either. Be careful, this is a trader's market, not one to have any strong positions, one way or the other
More...

People said the same thing when it was around 1000

m22au · Nov 29, 2017

Daal said:
And my hedges seem to be working well, XNET imploded. I'm looking to short BTSC now (I did it today but it collapsed to quickly I had to take my profit and run). Perhaps MGTI, or RIOT if I run out of big blockchain runners. The GBTC spread to me seems a done deal that will collapse, as soon as people learn that this market isn't a one way street, it will make no sense paying a 50% premium to BTC with a 2% annual carrying charge. Especially with stuff like BTC futures avaliable. GBTC prices are just plain ridiculous
With these hedges I'm trying to achieve a profit on both sides (that is on BTC and on the hedge side), historically I have done it, and it helps to deal with the volatility in case of a big crash
More...

I agree that GBTC prices are crazy, but I don't think Bitcoin futures are a catalyst for the GBTC premium to narrow. The reason for this is that the average Joe who owns GBTC (1) doesn't trade futures and/or (2) has GBTC in an IRA or Roth IRA.

I think the real catalyst for GBTC premium to disappear is an ETF, which I hope is approved next year following the launch of Bitcoin futures.

.

Daal · Nov 30, 2017

GloriaBrown said:
People said the same thing when it was around 1000
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Its a lot more mainstream now than when it was at a 1000. That Katy Perry asking Buffett about bitcoin news, if thats not like a shoe shine boy moment, I dont know what it is. My point is, crash risks have never been higher due to the price action, sentiment and fundamentals, so it makes sense to cash out most while still keeping some with a stop. Yesterday was the first warning, it went from 11400 to 9000 in just a few hours. I see no reason why this cant go from 10k to 4K in a week, no reason really