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Ask HN: Is short term crypto currency trading profitable?
8 points by cryptobaba 12 months ago | hide | past | web | favorite | 21 comments
Over the past few years, I was one of the many people who wrote off crypto currency. But apparently it grew by value and volume exponentially.

Was wondering if it's too late in the game to invest or do short term trading using coinbase API? I am planning to write a customized trading app myself which buys or sells based on my risk appetite that day. Is it worth the effort? Do any of you guys do it?




It is (yet) profitable.

First, choose an exchange that is stable, does not go down when there is a quick market movement. When that happens only stop-loss orders get executed _automatically_.

Second, now the exchange fee structure. Some markets have different fees for "makers" and "takers (ppl that makes an order without counterparty and the ones that match existing buy/sell orders). I've seen 0% fees for market _makers_.

Third, Test your strategy. Dont' just measure how much you win. Check your drawback (how much you loose at peak). If it's not acceptable to you, DO NO TRADE that strategy. If you don't have an strategy, you're gambling, not trading.

Fourth, most crypto markets have _very_ low volume. Don't trade there because you will move the market with pennies.


I have been working on an app to do trend forecasting for various cryptocurrencies. The end goal is to get realtime alerts when a currency dips or spikes above a given forecast. You'd get a message with the current forecast and a picture of the price graph with various statistical markers overlaid. Kind of like a real-time trend analysis snapshot.

Is this something you'd be interested in?


I've done stock trading before, with many of the tools. I'm skeptical of how good a tool for crypto can be. A lot of the reasons for spikes and crashes are emotional, and not really a consistent pattern.

Something like Bitcoin is going so strong because it had gone 'mainstream' and is vulnerable. There are several bubbles going on at the same time, one pops and crashes while the others keep growing. But ETH is still a niche and doesn't really have all the pops and crashes, so one can't just apply the same pattern across all cryptocurrencies.

But it's something interesting if it can be done.


Yes, I have a friend who programmed the profitable arbitrage bot.

He doesn’t make the bot public, but you can check out this open-sourced bot(https://github.com/butor/blackbird) that arbitrates among the prices in these exchanges below. * Bitfinex * OKCoin * Bitstamp * Gemini * Kraken

Please keep in mind that 1) I don't know how this bot exactly works because I didn't read the code yet and 2) this bot might not be the best one out there.


Yes, I made 40% ROI in 2 months using the Coinbase API (buy when threshold met or price < x, sell when threshold met or price > y).

Just add in some kind of intervention system is the sell/buy is high because the volatile nature of the currencies can see major drops/gains which can cause all sorts of bother.


How did that 40% compare to the overall change in price? Bitcoin has gone up 100% over the last 2 months.


He may have risked less than holding bitcoin.


Thanks. I was going for coinbase API, but are there any other better API services? Also, I don't see pricing, I am assuming its being compensated by the trade execution fee. Is that the case?


I've been fooling around with the GDAX API which might be what OP meant, since GDAX owns Coinbase. Maybe. I guess you might be able to use GDAX directly.

Anyway, it is a pretty good API that is directly tied into the exchange, so you are fairly close to the data.

There is no pricing, just fees. Fees are fairly low.

For higher frequency trading (does not seem like what OP was doing) it can matter, but if you're trading on 5-10% change, well, it won't be a big percent of your earnings.


Why not trade the stock market instead? APIs are available from the major brokers... It is much more liquid, you have the government protection in case the broker disappears with your money... With the same effort you can build generational wealth if you have an edge...


Competition.

Crypto markets, although slow, don't have companies worth billions of dollars and thousands of employees trading.

There are actually windows that can stay open for minutes at a time, rather than seconds or milliseconds.


To me they are every slow you cannot trade 6 or 7 digits account fast in the crypto market to get in and out efficiently... not to mention security - who is going to protect your money if the broker disappears... every year a big exchange goes bust...


In general, risk is proportional to reward. Your given risks and many more repel more professional traders and arbitragers, therefore allowing the above stock market margin of profits.


There is a risk and there is a gamble...


There's enough volatility to make it extremely profitable.

Coins are going up and down 10-30% for no "real" reasons.

https://www.cryptocompare.com/coins/#/usd


"Over the past few years, I was one of the many people who wrote off house flipping. But apparently it grew by value and volume exponentially.

Was wondering if it's too late in the game to flip houses?"

"Over the past few years, I was one of the many people who wrote off dot-coms. But apparently it grew by value and volume exponentially.

Was wondering if it's too late in the game to trade dot-coms?"

"Over the past few years, I was one of the many people who wrote off trading in tulip futures. But apparently it grew by value and volume exponentially.

Was wondering if it's too late in the game to trade tulip futures?"

Etc.


I know someone who has made money with a simple ETH trading bot. Apparently it can be done.


Does the bot try to maximize $ value or total ETH? It could be a terrible bot and he could still be up $ wise purely because the value of ETH went up.


It could be luck though?

Imagine a 1000 sided dice. Lose $2000 if you roll a 1. Otherwise make $1.

Roll it 10 times. Looks like your making money!


You make it sound so simple! I want one of those dice bots.





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