About this blog and ibankbitcoins
I want to do a bitcoin blog because I think bitcoin has a lot of potential to become the future currency of the world. More importantly, I want to bring in my technical knowledge of 6 years from the stock/futures market into bitcoin. There seem to be a lack of technical analysis and statistics in bitcoin (examples below), but a whole lot of speculation. Hopefully this blog will help you learn and understand speculation.
If you are not familiar with statistical or technical analysis, here are 2 interesting examples:
-imagine bitcoin prices are up 5 days in a row. WOW that is a big deal, market is bullish and everyone is making money. Now, part of statistical analysis is to answer the question: What is the likelihood that it will rise on the 6 day? or 7? or next week? This will give the trader an edge to plan out an exit strategy so it is important to understand from a statistical point of view.
-Technical analysis is based on chart patterns. If you already know what candlesticks are, this should be a breeze for you to understand. A recent example of a technical pattern happened on the day mtGOX collapsed, bitcoin price pummeled on large volume overnight to 400 dollars. However, large buyers stepped in at those prices and bid it up to 520 dollars by morning. We haven’t seen sub-500 dollar prices ever since. The pattern for that day is called a hammer, a bottoming formation. Market bottoms sometimes coincide with major pessimistic news after a prolonged period of decline. A similar analogy in the stock market is that market bottomed in 7 days after citi-bank filled for bankruptcies on Feb 27 2009.