Trading Bitcoin Manias

This post describes a trading strategy that I am using with digital currencies specifically Bitcoin. The system I use to trade is available online for free at To use it you would need to open an account on an exchange and that can take several weeks to complete.

My expectation of gains is high, 50% per year for the next two to five years. In my eyes this is an opportunity for gains if the market continues it’s volatility and or upward trend. Even as a small portion ones invetments this strategy could add a boost to financial independence.

These high expected returns make a big difference. As a comparison, I met with a financial advisor recently about managing my stock and bond investments. I currently hold self directed accounts and do rebalancing myself. The management fees of the financial advisor in the ballpark of 1.5% meant he would be making 65% of the income I wanted to withdrawal on for living expenses. That is a lot. If Bitcoin does go up by 50% per year it could be used to make gains not possible elsewhere at the same level of risk.

This strategy is based on the assumption that the price of Bitcoin will go up over the next few years. Trading the extreme peaks and valleys reduces the risk of buying at an all time high and also grow a cash reserve hedge. It’s pretty clear that Bitcoin has done well in the past but there have been times where people have bought in at a price that quickly dropped and then it took years to recover. This strategy hopes to reduce the likelihood of this happening by indicating times when not to buy when the market is overbought. This strategy also keeps a cash reserve as a hedge so that if the price was to drop unexpectedly you have some assets remaining to buy in or use for other purposes.

I personally believe that there are several reasons the price rise is likely but I won’t cover them all here. Some of the top reasons include the rapid activity of the developer community, improvements to the software and supporting infrastructure and businesses starting to work with digital currencies, the increasing user adoption rates and the gradually reducing production supply of the currency all play parts in my personal assessment.

The mania is a metric that measures rate of change both up and down over time. When the price rises at a rate that is higher than 99% of the past historical trading data then it is seen as a good indicator to sell a portion of holdings as the price and rate of rise always reverts in the other direction. The same applies to drops in price. When the price falls at a rate that is faster than 99% of the historical data it has always followed a reversal upwards and is a buying opportunity. When everyone is selling cheaply people panic but it has historically been the best time to buy.

The trends measured take into account a long term timeline. This means I look at trends based on the largest frequency of price cycling to reduce the risk of being caught out from an unexpected trend reversal. The long term objective is to accumulate bitcoin and trade when the indicators mark opportunities that only occur a few times per year at all. This makes it a low time commitment strategy.


Here is an example report showing the Bitcoin price (Blue) against the mania (Red and black). You can see that durring the past price spikes the mania levels went above 1.5 and this would have been a good time to sell and definatly not a good time to buy. Durring the downturns when the mania droped below 0.4 the price has over time gone up and this has been a good time to buy in my experience.

A lot of people tend to think that they need to trade daily or weekly on short term trends but this is more work and not something that I do. I originally started out down this road and there is a reason why I don’t do this any more. I wrote a stock and crypto trading bot that used a genetic algorithm to learn an optimal strategy for profitable trading. After letting it run for months and years the bot did make a lot of money but less than simply buying and holding Bitcoin or dollar cost average buys.

This is not financial advice. Any investments you make are at your own risk. The value of Bitcoin or any other digital currency could for unforeseen reasons go to zero. It is important that if you buy into these currencies you are aware and can accept this risk. Only buy an amount that you are comfortable loosing.


Money, Hate it and Love it.

I wanted to share some interesting observations about money. I think a lot of people make assumptions about it that don’t make much sense.

The title is a play on words from the saying love it or hate it but the strange thing about money in particular is that people do hate it and love it at the same time.

People want money but don’t want it at the same time. Everyone wants a lot of money but as soon as people get it they want to get rid of it. If you put a stack of cash under your mattress people would say that is totally irresponsible, someone could steal it or there could be a fire and destroy it. If you instead put that cash in the bank the tellar will tell you you need to invest it because it’s not doing anything for you just sitting there. I.e. you need to trade money for somthing else that isn’t money. Such as a share in a company, a bond as a promise to repay or a physical asset that might appreciate. Inflation destroys the value of money but no one says it like that.

Using money is like putting watter in a bucket with holes in the bottom that everyone thinks of as beeing super important. It’s commical and tragic as most of my friends are spending their entire lives working to make money just to live while not understanding what money is or how it works.

The thing most people don’t know is that dollars are created as dept by banks in the form of loans as they are needed. Most people think that dollars represent the labour they traded to earn them and are simultaniously frustarated at rising prices and living costs. The truth is that while most people work for money, some people / companies / banks just create it from nothing and charge interest. The really tricky part that most people don’t grasp is that because banks issue the currency with interest attached there is always more money owed than exists. It’s like a game of musical chairs. This is why economists are fearfull of deflation in the economy. As soon as the currency supply starts to contract people become fearful and stop spending on non essentials in order to pay down depts. Unfortunately there are more debts owed than there are dollars to pay them off so all available currency quickly dissapears and you end up with a depression.

This means that there is a hidden penalty for holding debts that compounds with greater levels most people don’t realize.

What to do about it? Save as much as possible. There is a sliding scale between your networth being negative and positive. The more negative or in debt you are the more of your life you have to spend paying other people. Conversely the higher you are on the net worth scale the more easily money can come to you. Be on the positive side of the debt equity threshold.

There are a lot of social conditioning beliefs that we have to spend our money and finance debts to the same level as our income. In my area the average house price is $830,000.00 and everyone strives to buy one and finance it with thrity years of mortgadge payments. That is $4000 per month. Half of the payments to a mordgage go to interest charges by the way.  If not house then a car, toys, or vacations etc.

Reducing your expenses has a greater effect on your financial future than increasing your income in some cases.

There are a group of people that save large portions of their income and share their experiences online. They are known as the Fire community and it stands for financial independence and early retirement. Some popular bloggers on the subject include (US) and (Canada). Check them out and leave me your comments.





Like Minded Persons Wanted

I am looking to find likeminded people that share the same interest and passion.

My focus this year is on personal growth. To me this means reading on new subjects, building things people want, and most importantly meeting new people and sharing life together.

Most of the people that I know are limited in what they can do because of the amount of free time they have. They don’t have the opportunity to spend extended amounts of time doing things that would make them happier or allow them to learn or transform beyond what a certain basic level allows. Most people have a certain number of hollidays or a limited amount of money to travel or go to conferences as an example. Even the people I know that are high net worth are also highly leveraged with liabilities that bring them into comperable levels of work commitment and the stresses that come along with that.

How much of your day is really yours?

I have long been aware of common sayings about money not brining happiness or once you get a bump in lifestyle you will just acclimate to it and then feel just the same as you did before. I don’t agree with this though. I think this only applies to us when we are not growing or moving forward as people. Growth isn’t about comfort though and is mostly doing less with targeted action and letting go of bad habbits.

Are big changes realistic?

What does it feel like to hold an extravigantly rediculus idea of your future that feels impossible to achieve but unreasonably commit 100% to it? Uncomfortable and isolating, but in a good way that makes you feel alive.

There is an interesting phenominon I believe that if you could offer random people a life that they want more than any other they will sabatoge it if it is too far outside their comfort zone.

The difficulty in intending to change your life drastically also comes with a greater reward than can be gained by the regular toils of daily labour. This is because that impossible idea in your head will eventually and quickly become real and part of regular living as long as you hold it with mental certanty and conviction.

I made some investment descissions over the last ten years that brought me to financial independence. While the decape prior was pay cheque to pay cheque, I spent most of the day working just to have an hour or two to myself in the evenings. Now I have all the time to do what I want and need. The nuts and bolts of the investments are built on a strategy that was the result of several algorythmic learning systems evolving over the years.

One interesting observation about stepping through financial goal boundaries is that the expectation of what it would be like has nothing to do with reality. I had a belief that once I reached a certain dollar amount of investments I could live off the interest and then I would feel free. However when that happened to me and I reached that dollar amount I didn’t feel free I said to myself when I have twice that number then I will feel free. Then if the stock market crashes I will be ok because I can also invest in these other assets. Somewhere around the time when my investments reached just about twice what I needed to live on I was fired from my job. I wanted to leave but really was stuck in a mindset of conservative fear. I’m still trying to break off pieces of my personality that are over conservative to the detrement of my well being.

What is it like to be financially independent? It’s amazing, It’s a new normal and at the same time it’s an environment perfectly suited to figuring out what is important to my life now so that I can go do that. However I don’t know many people that are also in this situation.

What am I doing…

1 Ongoing projects, some I will talk about later. One is a car company I am starting called This is a passion project and I love working on it.

2) Network of investors to share or discuss investment strategies that helped me become financially independent so that more can do the same. The investment strategy I use is available to anyone on the website

3) Youtube vlog I plan on starting to capture life, learning and fun with the intention of connecting with like minded others for growth and friendship.

Topics i’m brewing on for the blog and vlog inlude: health, fitness, travel, cars, money, investing, humor, food, relationships and more to come.

What is Possible?


I have been thinking recently about this idea that there is a threshold in our thinking between two extremes of possibility that bifurcates the course of our lives into two completely different directions. We all fall into different ranges but the end result is that everyone having thoughts more or less than fifty percent one way or the other will be grouped with everyone else of like mind. The fascinating thing is that it appears people in each group do not see what the other group see despite occupying the same world and even interacting with each other.

The distinction that separates us is based on this world view.

Side A: Life happens to us because it’s outside our control and

Side B: I’m learning how to navigate life because this is what I choose.

This was sparked by several recent conversations I had with people while they were telling me about problems they were having in their life. For each case I explored with them some actions they could take to get advice, explore and test options, re-evaluate the role of the cause of the issue in their life. I was just exploring some ideas not trying to lecture or preach but I noticed they would always reset the track at the beginning each time and restate the problem statement as they had begun it. I tried backing up the context to come to some common ground because I felt the point I was trying to explain was being overlooked but in those moments at least these strangers didn’t want to let go of the way there story was told.

Did their problems really matter? Absolutely they were real problems that would drive anyone crazy. Has anyone else had the same issue and resolved them? Yup but it seemed simply describing an option to them did not change their intention on what they planned to do.

If you are not looking for change or new possibilities you will not find them. This gives the people in each group the illusion that the world only exists the way they see it.

On the extreme end of side B people exhibit a force of will that is total with complete disregard for feedback from their experience of reality. Their goal is all consuming and they view it as the only thing deserving of their attention. When or if their goal doesn’t materialize they don’t even observe it. These people can appear crazy to everyone in the middle.

The opposite end of the spectrum side A are extreme pessimists. They don’t try stretch goals, settle with what they think they can have without ever contemplating change. They view people who take risks as foolish and others with excess as completely unrelated to their way of thinking.

Obviously this is a generalization and we as individuals fall into different levels of this spectrum for each area of our life. What I have noticed from past experience is that the crazy things that seem beyond impossible actually happen for real when you hold them in your mind as certain to such a degree that there is nothing else. And conversely it’s impossible to move from a mindset of lack being placed on us by others into prosperity. No matter how much effort you put into, the universe meets that force with an equal opposite pushback. Thats the interesting key to me, how do you take the things in your life you believe to be impossible that you want to have or explore and cross the threshold? It’s hard, when I start out on one or the other it trends toward the extreme in that direction. Crossing back requires a big commitment, the ability to let go to things that feel essential and a leap of faith. It’s almost as if the trends towards helplessness become a part of you so letting go of them really is like jumping off a cliff.