On Small Profit Indicators and Long-Term Analysis – Profiting with Ethereum at Kraken

FOREX may have a holiday on the weekends, but in reflecting about a previous week’s trends, analysis may certainly not have any such holiday.

Not as though to indulge the whimsy of any passing Unicorns or of the Bitcoin community’s latently centralized empires of the early adopter’s mining megaliths, for all of the slow-moving trends and overall limited volumes being bought and sold in the Bitcoin and altcoin exchanges of the Modern Web, daily, a short practice in day trading with Bitcoin may serve to make for an interesting manner of profit indicator. To such an effect, the thesis of profiting in Bitcoin day trading – though to a very small net profit – may be reinforced with a literal proof of profit, as to which one presents another thesis: On following a “Down Trend” in the Kraken ETHXBT exchange, to a net profit in ETH Volume. 

It is no secretive kind of a system denoted in that article. Rather, it is a simple algebraic inversion of a strategy of “Buy Low, Sell High,” factored onto the trend of an exchange momentarily favoring the Base Currency of a currency pair – in which, the currency pair is ETHXBT i.e Ethereum and Bitcoin, and the Base Currency therefore, Ethereum. Though the “Down trend” in the market does not immediately favor a volume of Ethereum juxtaposed to a volume of Bitcoin, but in following the trend with a series of subsequent tades, it may serve to net a profit overall in accumulation of a greater volume of Ethereum altcoin – even so far a that it ultimately serves as a profit in a single reserve currency.

The ETHXBT exchange being one of the more liquid exchanges at Kraken, but of course – in the peculiar characteristics of the Bitcoin and altcoin exchanges – it may not be terribly easy to illustrate any quick and hugely profitable manner of a profit indicator with those exchanges, sufficient to indulge the no-doubt many of us looking for quick and hugely profitable investments, hypothetically.

That a profit of approximately $2 is a profit nonetheless, a simple system to such an effect is illustrated in the article – as linked-to in the previous. It is, ostensibly, a successful system, thus – as it gains a net profit to a manner of not any ethical or material loss – of course it might seem like a greater profit if more volume was invested immediately, but – then again – if more of a volume had been invested, immediately, then in the particular dyamics of that singular exchange, the trade pattern may not ever have advanced at all, not even to a net of $2 profit.

Contrasted to any manner of a broker’s leverage as may be available for trades posted in a FOREX exchange, any trades made in the Bitcoin and altcoin exchanges may be made without a calculable leverage, such that – ostensibly – if a leverage option was available, it might otherwise serve to “Level the playing field” as for entry by low-volume investors in a market then materially shared with high-volume investors and not at any loss to either scale of investment, then. At some point in time, however, Kraken had stopped offering any option for leverage as an option on bids — and thus, we are all left with a 1:1 leverage ratio. We must therefore all contend at a 1:1 scale  with all of the market-clogging large volumes levied at singular price-points on the Bitcoin and altcoin markets.

Regardless, it may be theoretically possible to turn a profit in trading in the Bitcoin and altcoin markets anyway. It may be theoretically possible, but a profit indicator as such might not be able to advance at any more than a one tenth of glacial pace.One may credit, mostly, the — as previously denoted — the market-clogging large volumes levied at singular price-points on the market.

As may be logically and algebraically illustrated of a history of  market exchanges at Kraken, when the market rate is advancing along  as would be under any singular market trend – such as towards an immediate favor of volumes in Bitcoin, in the ETHXBT market’s latest trend – the trend ceases to progress forward by any appreciable magnitude, when the market exchanges must first buy or sell off a large volume of Bitcoin, e.g. at a scale of 1000 or more Bitcoin invested alongside volumes of e.g 0.5 Bitcoin at any single price point.

That even as a slow-going trend it is certainly to a learning experience, the profit of $2 might not seem completely matched by one’s greater understanding about the singular market, then. In short, the absence of any system of leverage for bids, such that  – if it was available and implemented well – could serve to “Level the playing field”  for all investors, the absence of any such leveraging system … it is just as it is?

Of course, then, although the FOREX exchanges are always closed for the weekend, but so far as the week’s previous market data in FOREX, itself, may be available via any single trading platform – e.g the boldly if not intoxicatingly overwhelming MetaTrader platform (MT4) (MT5) …. and its nonetheless intriguing, if not in all ways immediately simplistic MQL (MQL4) (MQL5) programming language – both of which may available with most brokers on FOREX … thus, the analysis need not take a holiday.

The simple, algebraic logic of a system might ever seem obscured for its description, perhaps? If so, but perhaps a further proof may serve to illustrate how an algebraic inversion of “Buy Low, Sell High” and a $2 profit has become – in all ways already – quite a profound learning experience, after all.

A Short Thesis About Trend Analysis

Having taken up a manner of a hands-on study of trading practices, in studying about the Kraken Bitcoin/altcoin exchange, and lately diversifying my own attentions also onto a domain of FOREX exchanges, it’s proving to be a nice diversion aside to the limited canon of the scholastic fare of my own immediate studies. As I am certain that there may be any number of numeric methods that may serve to be of any notable relevance for numeric and semantic analysis of exchange trends, and the immediate trends of a Kraken or FOREX currency pair exchange may not seem in any ways immediately easy for anyone to politicize in any regards – moreover, that any number of trade offers may be posted to any such exchange, ideally to a real, ethically cogent, and capital profit in the transaction – I believe that it may represent something close to an ideal setting for succeeding in capital transactions, but – of course – beside the convenience of so many web services, yet it may not seem in all ways an instantly accessible thing to succeed at day trading, whether with Kraken or with any single broker at FOREX.

Not as though to mix up the academia of applications of numeric methods in practcices of electrical engineering and of statistical methods in practices of currency trading, theoretically the dynamic and socially responsive nature of currency exchange rates – though not in so far like a physical electrical signal – an exchange rate under any single currency pair – in any single broker or exchange – the singular rate represents, to a perspective, a quantity that changes over a duration of time.

Of course, the manner in which a currency rate changes over time – as whether to any manner of a remarkable “Up Trend” or “Down Trend” of any single currency when traded immediately to any single other currency – the hypothetical trend may seem to differ, to an extent, depending on the scale of durations of time at which the respective market rate is calculated..

Adopting a thesis of that a linear trend line as r = mt + b is reified of an exchange rate when any three or more coordinates of time and rate as (t, r) are “On” the same trend line, and that the slope of the linear trend line – i.e the value of m in the formula – that the slope of a trend line, as such, may be interpreted as representing a trend across the duration and scale of the graph of r = mt + b … but the concept of scale, as such, may not seem to occur naturally of the continuous geometric model.

In a sense, such manner of scale would be semantically analogous to a sampling rate in a telemetry analysis about a physical electrical system. Assuming that the numeric magnitude of an exchange rate is changing continuously across exchange transactions, in a duration¹ of an exchange’s forward progress, in that regards: The magnitude of an exchange rate might then be represented as it being analogous to the magnitude of voltage, current, inductance, or other physically measurable or mathematically calculable quantity of a closed loop electrical system.

That any manner of a measure of a quantity of a time-varying manitude – that a measured or calculated magnitude, thus in an abstract sense, may represent a numeric datum to a numeric analysis, but – of course – there may be some principally material differences as to the nature of each measurement system of which the respective datum is produced.

Thus, in a model of numeric analysis of trends of rates, in any principally algebraic and/or geometric model, the model and the analysis itself may not be completely removed of the measurement system by which the data is calculated to the model. Assuming that an exchange rate would be calculated in all of a materially accurate regards, and with no lengthy criticism as across the analogy about electrical systems, this short thesis article will presently return to a topic of sampling rates.

It may be, in short, to a simple synopsis about the meaning of different scales in graphs about exchange rates, viz a viz OANDA fxTrade for Android

OANDA fxTrade for Android – 1 Day Graph of AUDUSD

OANDA fxTrade for Android – 1 Hour Graph of AUDUSD

OANDA fxTrade for Android – 1 Minute Graph of AUDUSD

The respective graphs differ on a basis as of the sampling rate for the graphing of the exchange rate data, in each respective graph. All three of the graphs are from the same approximate instant of time – i.e at approximately 6:50 in the morning, in local wall clock time. All three of the graphs are consistent at scale – each graph being developed onto a progressively differing duration of magnitude of sample rate, for modeling of changes in the magnitude of the same market rate onto the single currency pair, in the example – however, the three graphs may seem to differ visually, in any immediate view.

Thus, without delving too deeply into a mathematical analysis of the respective graphs, perhaps this simple example may serve to illustrate an intuitive thesis as in regards to the relevance of magnitude of sample rate in graphs for trend analysis.

 

Notes:

1. thus, towards a discussion of the by-in-large slow-moving dynamics of exchange rates at Kraken, so far as that any one the exchanges may not be seeing a lot of volume being transferred in any short time. Candidly, such slow-moving exchanges may not allow for any lot of a quick turnover to a capital profit in the exchange, but – in consideration – perhaps it may serve as something of an introduction to a simple mechanics of trading in a capital exchange.

Of a Long and Winding Road to a Study of Bitcoin Trade

That any significant investment may entail a significant amount of financial record keeping – with or without any single, distributed blockchain involved – at a scale of personal record keeping, the data of one’s financial records may take up a notably personal relevance. An example the homely checkbook – it may not even barely even begin to describe the breadth and depth of meaning to personal financial records – of every transaction, every debit and credit, and any sense of purpose, meaning, and application of personal financial capital – that it may not be even barely summarized of such a simple ledger as a checkbook. Regardless, the checkbook – in all its simplicity – a checkbook may serve as a simple keynote towards a broader topic, in all its abstraction and all its material form: Financial record keeping – of “Keeping Books,” so to speak.

That for all the by-in-large semantically independent nature of Bitcoin – or of any singular altcoin, such as Ethereum – for all of the principally independent nature of currency and capital of an exchangeable “Bit share,” in such a kind of commodity, moreover for all of the ostensibly anonymous data of blockchains as ledgers, perhaps it might seem as though the distributed, ostensibly anonymous, and principally independent nature of such commodities could serve to remove a sense of fiscal and personal responsibility from any person having any material ownership  of or making any material transactions with a cryptocurrency as a fiscal commodity?

Thus, perhaps the illicit trade conducted on Silk Road may’ve seemed “OK,” in any way, if it was not understood that Bitcoin – when applied as a commodity of material exchange – represents “Real capital,” to begin with – then applied in Silk Road for a real trade in illegal products? The shadow of it, as of the legal and social ramifications of Silk Road, it may seem to be something that a capital currency does not principally “Need,” but that it should be legally addressed once anyone insists on making an illicit market of it. Maybe it could seem to be “passed off,” though, as if it was not all a feature of the same society and same overall economy as in which so many modern reserve currencies are exchanged? If Bitcoin is in any ways “Different” as a manner of currency, that in itself may seem to add a novelty to it – but there may be some better ways in which it may be realistically differentiated from other currencies, rather than as if to apply it for sale and trade of any actually illegal goods and/or services. The Revolutionary Chic of it – certainly, it has a limit, too.

Returning to the topic of record-keeping – with only a short side note as to how the first Silk Road was ultimately foiled of its operations – so far as that one’s own Personal Books may seem to be a ledger of only a financial loss, perhaps it may not seem like an ideal topic to begin a  ‘blog article about. Not as though to venture too far into ad hominem mode, if there is a hope for the hapless capital individual in Bitcoin investing, it must need a cautious presentation however.

Thus, as for addressing the precautions of it, one may endeavor to not assume any manner of a “Too Fast” style of writing.
Clearly there is a place for “Keeping Books,” even in applications of Bitcoin and other blockchain-oriented altcoins – not only for the sake of keeping a review of capital outlays, but also for keeping a review of capital gains, as in parallel to any data presently collected “On the Blockchain”.

To an eager investor about Bitcoin, perhaps it might seem like somehow a distracting topic: “The Books” of it. It might seem as though to detract from the “Woo Factor,” moreover – and somehow substantially so – to so much as propose to keep a formal set of books about one’s own transactions with Bitcoin. After all, if  any of the Rothschilds of Bitcoin may seem as if to spend – so one may imagine – as if to spend as any whim would see fit, at any instance, so why not the rest of us – the rest of us persons who are holding any share of the currency? Even one µBTC is a share, as such.

At a small scale, candidly, it may not seem to have any of a quite as much “Woo,” per transaction. Thus there might not seem to be any much of an immersive “Buzz” for anyone to “Buzkill,” as with regards to any manner of personal record keeping about Bitcoin transactions, when one is transacting at a scale of very small volumes of Bitcoin as currency.

Inasmuch as that there may be a capital interpretation of Bitcoin, of course there may be more that one may capitally do with Bitcoin than to mine or spend it. The Bitcoin exchanges, thus – though entailing a great amount more of record-keeping – the Bitcoin exchanges – such as Kraken – may seem to serve as a manner of a “poor man’s alternative” for Bitcoin investment, juxtaposed to an investment in any massive-scale Bitcoin mining operations. Not as though a Bitcoin exchange would naturally make any limit about volumes of bitcoin, of itself, but insofar as it does not serve to “Shunt out” the small-scale investor, a Bitcoin exchange may present something like an ideal opportunity or small-scale or large-scale investment, with only a minimal financial risk for trades conducted at a small scale.

For  all of the novelty of a Bitcoin exchange, but also of the cautions of it, of course it may not be easy to write up a  short summary about the topic – least of all, to write an article about the exchanges and for perhaps any audience of the very socially volatile Cyberdiaspora web of The Modern Era.

One might not propose to call it either “Deep” or “Dark,” at that – candidly.