The perils of trading bots are explained in it. The author himself runs one for a long time. [2]
In particular, the greatest risks are overtrading (so you get eaten up by fees), and overexposure (so you get eaten up by volatility).
[1] - https://www.systematicmoney.org/systematic-trading
[2] - https://qoppac.blogspot.com/2021/04/trading-and-investing-pe...
Anyone looking for a trading strategy, automated or not, needs to consistently beat such numbers to do anything other than lose money versus just buying and holding.
Given prior (lack of) success in every other market this kind of thing has been attempted, makes this a hugely tall-order. The most successful quant firms all average well under 100% returns, even with years of experience, armies of experts, and loads of investment in assets and infrastructure.
Buying and holding crypto already outdoes them (massively). Why take on greater risk and spend time to try and get yet more out of such a market?
Put 5% of that 2 million into a spread of the top 10 crypto by market cap.
After a few years, and despite some of those coins going to zero, you'll likely have done way better than just the 50% you'd have got from me.
If you don't though and it all goes to zero, you only lost 5%, as opposed to the entire 2 million to a random person you met on the internet.
You're welcome.
Then again, I did have the somewhat limited foresight to keep ~33% of what I've mined in crypto form so not a total loss ;)
Empirically, you could have bought a share of the SPX at any point in time, and sold it with profit later. The real problem is what happened in the time between, and whether you were able to hold on.
Cryptocurrency is NOT a market you want to be in.
Except the market manipulation, that'd be hard for me to see. It's also a kind of extraordinary claim, so please provide some extraordinary proofs that there actually is manipulation.
Cryptocurrency is a market that everyone should be in, it is after all created for and by everyone. Be careful of putting in money you really need though, and see it as gambling more than anything.
I guess that depends on your priors. Given the nature of the market, its opacity, its lack of regulation, the sheer proliferation of the number of cryptocurrencies, the growing interest by large entities like hedge funds with a history of active manipulation, I'd personally consider it the extraordinary claim that there isn't manipulation occurring. Like, if I were to set out to design a fertile ground for manipulations, it would pretty much look like the cryptocurrency space.
And since you also claim it's do easy to manipulate, wouldn't it be easier to provide proof of this?
When thinking about it, i'm not even sure how I could provide any evidence that it isn't manipulated... Any ideas?
> Like, if I were to set out to design a fertile ground for manipulations, it would pretty much look like the cryptocurrency space.
One tip for your future scam-network: don't design your entire ecosystem around the idea that you want to have a forever-stored global ledger of all the transactions, as it'll be easy to trace everything whenever. Better to have a few entities controlling the ecosystem that the public don't have insight into.
That's not what "priors" mean. It simply means that based on my experience of the world and my understanding, I would very heavily assume it is being manipulated. I'm not asking for anything. I already have a solid opinion. If you choose to try to disagree with that with solid evidence, feel free, but I'm not asking you to.
"don't design your entire ecosystem around the idea that you want to have a forever-stored global ledger of all the transactions, as it'll be easy to trace everything whenever. Better to have a few entities controlling the ecosystem that the public don't have insight into."
I think that counts for a lot less than you probably do. Nationstates may be able to back wallets to individual entities, but you and I can not in general. Moreover, I wasn't just talking about BitCoin. Some of the cryptos are even more impenetrable than that.
So I guess you see Hacker News as your platform to share your opinions without wanting to discuss them at all? You might want to refine how you use Hacker News then, as when commenting, it seems that you want to discuss. But since it's clear you do not, maybe it's more appropriate you create a blog and then submit the posts here?
In these days of misinformation, it sucks that people feel like it's fine to write "Exchanges frontrunning you and manipulating the market" without any sort of evidence and when challenged for the evidence, the rebut is "you don't have to believe me and I already believe in what I believe". In particular, it's not the kind of content I hope to see on HN, where many people are open to both providing evidence of their claims and also open to listen to others.
This should not be a concern, just don't HFT your trades. Play longer time-frames (like a few months between a buy and sell); and don't use leverage.
> exchanges just taking your money and running
There are many established/regulated exchanges which have guarantees as good as the traditional exchanges.
> prices crashing without you being able to sell your assets
Maybe that's when you should buy?
> Cryptocurrency is NOT a market you want to be in.
I have been in this market for 6 years, and I was able to generate double digit yields every year (even on bear markets, actually these were the most profitable).
- Frontrunning and market manipulations are as many opportunities: the game for small players is to detect occurrences and free ride them. In clear markets there's no opportunity left in fast trading for anyone without access to institutional fee structures.
- Exchanges doing a runner: diversification and gross (not net) leverage can mitigate that.
- Price crashing: be short-only or market neutral (long=short) if need be.