Hi Guys, i don't usually Post new topics (this is my first)
and this is not a question, but More of an INFORMATION SESSION FOR BEGINNERS.
I have noticed a lot of beginners are talking about bitcoin this and bitcoin that.
LET'S CUT THROUGH THE B.S. ok
Let's ask this question (Which is a favourite with newbies)
CAN I MAKE A SHYTE LOAD OF MONEY OVERNIGHT ON BITCOIN
Note : I'm not going to go in Mining here (Short Answer on Mining, As an I.T. Engineer, i can tell you , Probably not worth the ongoing cost of maintaining the system)
also.. this answer is focused on AUSTRALIA only (since i live here)
Now.. Let's start like this
the best way to buy bitcoin is without the broker.
so.. how do we do that.
Lets go to this site
Now. i would like to point out that
- the google serps says "The Fastest and Most trusted Exchange" LOL yeah.. right
well.. TRUST is dependant on WHO IS TRUSTING YOU.
i mean.. if idiots trust you and you are ripping them off. then You are not really that trustworthy, but the idiots think that you are
so.. yeah, that's that.
but ok... to the point
let's look at what it costs NOW to buy a bitcoin (Assuming you are in Australia)
Answer = let's round it off to $20,700
Now, that's all good and fair
Now let's look at how much it would cost if we were to sell the bitcoin immediately after purchasing it
ANSWER = let's round this off to $17,100
to the question of ....
"if i bought a bitcoin NOW. and sold it immediately after, would i make a profit"
ANSWER : No.. i would make a loss of - $3,600 AUD
so that's not a viable option on how to make money
Now. LET'S LOOK AT TRADING
What if a newbie went to trade bitcoin
(FYI, it's the weekend, so the price is not moving, ) Let's have a look at the current price of bitcoing (with my broker)
ANSWER $13,587 AUD let's round this off to $13,800
NOW.. HOLD THE PHONE... Hang on a second
Do i smell a Possible Investment opportunity here
HOW ABOUT THIS FOR AN IDEA
Step 1. Buy Bitcoin from my broker at a BUY PRICE of $13,500
Step 2. Get an Account with Bitcoin.com
Step 3. Get my broker to deposit my Bitcoin into my Bitcoin Account
Step 4. INSTANTLY SELL THE BITCOIN at a SELL PRICE OF $17,100
PROFIT = I JUST MADE $3,600
and it probably took me a few minutes to do it
NO RISK.. NO TRADING hehe
Now could i do this 10 times a day............ HELL YES
so i could THEORETICALLY make $36,000 PER DAY
Now for all you newbies getting excited. ............... KEEP READING
let's look LOGICALLY at what would be required to make this ACTUALLY HAPPEN
because if it can ACTUALLY HAPPEN you guys will be giving me (actually, i won't say it.. hehe) you get the idea (Note, this is not a smiley hehe)
so here is what WOULD NEED TO HAPPEN
- My Broker would need to agree to deposit 1 bitcoin into my bitcoin.com account
- bitcoin.com would need to agree to take the deposit from the broker to begin with
[Now.. i don't know if my broker would do this.. However, I DOUBT IT]
the approved method is... DIRECT TRANSFER INTO MY NOMINATED ACCOUNT
so... My broker is willing to transfer the amount in AUD into my account
but HERE'S A PROBLEM
You can only use 5:1 Leverage on this instrument
so...I would get 5 times less in actual fact
but let's put that aside for a second
let's say my broker actually paid me $13,500 into my bank account
can i open a bitcoin.com account......... ANSWER =HELL YES..... easily
LET'S NOW ASK THIS THIS QUESTION
Are bitcoin.com are a bunch of absolute retarded idiots............ ANSWER : PROBABLY NOT
now, that being the case
NEWBIES... Do you honestly believe that i could just approach bitcoin.com or any bitcoin provider for that matter and take my payout from my broker and FLIP IT on their site for a profit
ANSWER : No
but THAT'S AN ASSUMPTION, isn't it hehe
Now.. LET'S LOOK AT FACTS
In Australia FACTS ARE.. WHAT'S IN THE CONTRACT
Now.. if i may draw your attention to the Terms and conditions of the bitcoin.com site
Grab a cup of coffee guys and get read for either a Jaw Dropping Experience of a Good Laugh
let the Naivety stop here and let the education begin.
- How the bloody hell are we supposed to be Taxed to begin with ?
i mean, Not that i'm in a Hurry to pay tax / G.S.T (as we call it here), but IT IS LAW that everyone must pay GST
but it is also law that YOU MUST USE A CURRENCY IN CIRCULATION
also, YOU MUST PAY GST, but, You cannot be Charged Tax on a currency that is not in circulation
also IT IS ILLEGAL TO TRADE IN A CURRENCY THAT IS NOT LEGAL TENDER
I mean.. if this rule could be broken, i could use my old ORANGE $20 Notes from the 70's hehe
so.. We can't do that
but let's look at the terms and conditions
some of the highlights are as follows
- NO ONE ACTUALLY READS THEM. (we all know this is true) and watch what happens IF YOU DON'T
feel free to read through them.
- SECTION 1.1
LOL...... "Fair Market Price" LMFAO ROFL.. (Give me a second to compose myself)
ok.. i'm good
Now. scroll back up again to what i said the difference was between the broker's price and the bitcoin site price
it was $3,600 difference
yeah, that sounds very fair hehe
Very close to the market price , Very Australian as well, of them , giving Hard working Aussies a FAIR GO hehe
ok.. Moving on
THE POINT WE ARE LOOKING AT IS... Can we actually withdraw this money without any headaches.
Section 1.2 basically says YOU AGREE TO BE BOUND BY THE TERMS etc etc.
here's my favourite part
so .. Basically they can REFUSE TO PAY AT ANY POINT IN THE ORDER PROCESS...
And wait for it........... FOR ANY REASON
and AT THEIR SOLE DISCRETION
oh it gets better
you are agreeing to release them of any obligation
so basically they can give you the middle finger AT THEIR SOLE DISCRETION
and you can't sue them
Now 2 other bits i want to bring up
they are basically saying as well , in the terms that
All deposits MUST BE CASH ONLY OVER THE COUNTER DEPOSITS, Nothing Electronic
also. they are saying, YOU UNDERSTAND THAT BITCOIN IS NOT LEGAL TENDER IN AUSTRALIA
they also go on to say that
- if they have technical issues, you agree to hold them harmless
- if they close their doors for business TOMORROW, you agree to hold them harmless
you get the idea
so LET ME PAINT A PICTURE FOR YOU
Step 1. You pay your broker the hard earned cash to buy bitcoin at THE MARKET PRICE which is lower than bitcoin.com
this should not be an issue, because BITCOIN IS AN INTERNATIONAL CURRENCY...... RIGHT ?
is there anything illegal about this......... NO, THERE ISN'T
Step 2. let's assume my broker pays me in bitcoin into my bank account (he won't, but let's say he does)
well... I can't transfer a bitcoin to the other account because
NO ELECTRONIC TRANSFER IS ALLOWED FOR PURCHASE
ok.. so lets say i take the money and do an OVER THE COUNTER PURCHASE
so... I GIVE THEM PHYSICAL CURRENCY THAT IS LEGAL TENDER IN AUSTRALIA
AND .... I expect that i can instantly sell this and turn a profit
now.... SECTION 1.3 willl be the thing that will stop us here
THEY WILL GIVE US THE MIDDLE FINGER
TAKE OUR PHYSICAL CURRENCY (Because there was no electronic transfer or receipt)
they will keep it and give us nothing in return
because THEY CAN
and WE CANNOT SUE them
so.. as for that little scheme that i discovered , IT WON'T WORK, Contractually you can't make it happen
and even if you could THE AUSTRALIAN TAXATION OFFICE would rip you a new rear end.
OK, let's move on to trading just with the broker
so here's a chart of bitcoin's progress
Looks like we can make a killing overnight, doesn't it
i mean current price is $13,500 approx and 2 days ago it was at $20,000 approx, it's now in a pull back which means we will have (OR SHOULD HAVE)hehe,... another rally up.
THEORETICALLY for all you newbies
you would be jumping up and down and saying
"but martin, if we buy now and take profit at the top of that candle, we can rake in approx $7,000"
Yeah.. you think so
so.. it dropped $7,000 in 2 days
i opened a demo just to test all Crypto Currencies very quickly
I expected awesome returns in a very short period of time
here is the trading history
The Demo was opened with $25,000
as you can see i opened the min lot size of 0.1 LOTS
we'll examine this in a second
I opened AT THE SAME TIME
bitcoin, Dash, Etherium and litecoin
the first 4 trades were losers
i then opened the same 4 trades at a lower position
let's look at bitcoin alone
1st bitcoin trade. LOST - $401.91 REMEMBER THIS... ok
2nd Trade MADE A PROFIT... $38.89 BIG BLOODY DEAL,
where is that huge thousands of dollars that we are expecting
Now let's examine this WINNER SHALL WE
Size 0.10 Lots (what does that even mean... really ?) does it mean $1 Per Pip........ NO it doesn't.
Entry Price 13,327
TAKE PROFIT 13,627
the difference is 300 PIPS
i'll say that again......... 300 pips
Now. consider this
I MADE $38.89 IN 300 PIPS.......... WTF hehe
let's calculate that down to a PER PIP price
$38.89 divided by 300 = 0.1296333333 ROUNDED OF TO BE 13 cents per pip
FYI, if you do the calcuations
ALL THE OTHER CRYPTO CURRENCIES WORK OUT TO BE 13 CENTS PER PIP
now by comparison
you could just as easily trade a currency at 0.1 Lots and you would be making $1 per pip
FACT... at the same lot size you are make significantly less money per pip
also.. THE PIP SPREAD IS 73 pips.
this is an ECN Broker that usually on any instrument normally has 0 pips - 3 pips
worst case scenario, i've seen it go up to like 20 pips
73 pip spread is ridiculous
but now you are saying
"But Martin, this crypto currency is new and it's taking over the world"
"it moves rapidly and money can be made"
Want to bet ?
for the last week I've actually been asking everyone that i run into , do they use Crypto currency, and for businesses
DO THEY OFFER PAYMENT VIA CRYPTO CURRENCY
NOT 1 PERSON OR BUSINESS HAS SAID YES
i can't buy a pizza with this
i can't pay for fuel
i can't do shopping anywhere with it
i walked into a lamborghini dealership. can't buy a Lambo with bitcoin.... Nope
so.. WHO USES THIS EXACTLY
and WHAT IS DRIVING THE PRICE UP
now... HAVE YOU NEWBIES HEARD OF ............. PUMP AND DUMP hehe
Because, you see in Australia if a business used and accepted bitcoin, it would need to be taxed, and if the business used bitcoin it would be shutdown for using a currency that IS NOT LEGAL TENDER IN AUSTRALIA
and when i look into the back end of bitcoin mining, AS AN I.T. ENGINEER
it really is not viable
it really really relies on you constantly updating your machine that will start generally from around a $4,000 investment if not more (not including Electricity costs)
chances are you will not get your investment back for a long time, if ever.
as for trading
the only way you are going to be profitable at this is IF THE VOLATILITY KEEPS GOING........ WHICH , I HIGHLY HIGHLY DOUBT IT WILL
You are in a trade , Just like me
Volatility on bitcoin was high, you had 0.1 Lots in play and you just lost $400 like i did.
the spread is 73 pips
NOW.. WHAT IF THE VOLATILITY STOPS.. (let's not even look at the option of the bitcoin collapsing yet)
if volatility stops
READ THIS VERY VERY CAREFULLY
You are in a trade that is losing $400
your PER PIP COST IS 13 cents
THE the spread is 73 PIPS
Meaning..... to recover $400
this needs to happen
YOU NEED TO PROFT 3076 PIPS (not points....... PIPS)
i'll say that again
now... how soon do you think that's going to happen ?
oh, but it gets better, we forgot about the 73 pip spread
so.. it's actually 3076 + 73 = 3149 PIPS
OH IT GETS EVEN BETTER
Do you newbies understand how MARGIN WORKS
the Leverage on this instrument is 5:1
Meaning, if the price is $13,500
YOU MUST PAY $2,700 just to be able to trade
SO if you think you are going into this with a $400 account balance, THINK AGAIN
and if you have $3,000
$2,700 will be sucked up in Margin and you will only have $300 to trade with
how long do you think that will last ? WITH THIS VOLATILITY.
NOW LET'S LOOK AT THIS LOGICALLY
Realistically , with no regulation on the currency, they are going to PUMP UP THE PRICE as they see fit
this is why bitcoin has pumped it up
AFTER ALL. if someone comes to the bitcoin site, THEY HONESTLY ARE PROBABLY NOT TRADERS and have no idea what the actual market price is
if you complain, YOU AGREED TO HOLD THEM HARMLESS...... Remember.
Now. if price is pumped up as much as this, IT'S GOING TO COLLAPSE in a very big way
here's another interesting point
why are ALL THE CRYPTO CURRENCIES pretty much identical on the chart
could it be that the others are jumping on the SCAM train, as bitcoin is
and scamming the crap out of newbies
this to me looks like A PUMP AND DUMP
now. even if you want to argue the point of
"But Martin, i can still make money scalping it until it blows back on itself"
but you REASTICALY NEED AROUND $8,000+ to even attempt it.
and besides, you can make money more safely and reliably with less volatility on Currency
and MAKE MORE PER PIP
CONCLUSION : WHY WOULD ANY NORMAL PERSON WITH HALF A BRAIN INVEST INTO BITCOIN
I'm going to continue playing with bitcoin and the other crypto's on demo
but i really don't see this going well
I mean if this was for real
then I SHOULD BE ABLE TO GO TO MY BROKER
GET PAID FOR MY BITCOIN
TAKE IT TO BITCOIN.COM AND MAKE A CRAP LOAD OF MONEY ON THE EXCHANGE
i'm betting the following
- bitcoin will not pay you out unless you buy IT FROM THEM (So much for international currency)
of course this is true, otherwise they'd be broke in a day because the only way to survive would be to sell the bitcoin that i SOLD TO THEM (that i bought for a lower price) to some stupid newbie who is prepared to pay several thousands more
but then as soon as i made a you tube video
EVERYONE WOULD KNOW ABOUT IT
and then.. they wouldn't be able to sell it to anyone. HENCE THEY WOULD MAKE A LOSS.... BIGTIME because we would all want to make $40k a day... right for doing basically next to nothing.
IT'S NOT A SUSTAINABLE BUSINESS MODEL if they let people sell them coins that are not their own.
THE WAY I SEE IT
once the volatility stops... A LOT OF PEOPLE ARE GOING TO BE PISSED OFF
I hope this has been educational
even experts agree this is going to implode
and it makes sense
What happens to a currency or any instrument that suddenly has a rally up in a short period.
ANSWER : PRICE NEEDS TO RETRACE TO CORRECT ITSELF for the fluctuation
THAT'S SOUNDS RIGHT TO ME
i see bitcoin going back to around $500 per bitcoin
at which point all the newbies will jump on again in anticipation for the rally up again
but WHAT IF IT GOES DOWN...... Did that occur to anyone ??
I Hope this made sense to a lot of newbies who are asking "Should i invest into bitcoin"
MY ANSWER WOULD BE
-No, don't even bother trying to formulate a strategy
- Unless you want to create your own crypto currency and scam a tonne of people before the bubble bursts, then NO, don't bother
Feel Free to ad comments guys
Feel free to disprove what i have said
i would love to be told that i'm wrong about this.. but seriously , i see this blowing up in everyone's face that is investing into it