Bitcoin weekly VAR update 1Hello ladies and gents,
Before someone gets on my case for thinking I mean this has anything to do with a weekly chart, you are mistaken.
Anyways, I have have been bullish since my last post, and I remain bullish. I will let you guys know when that changes.
One of the most respected technical analysts in the space, Tone Vays, was calling for a price of $5,000 a while back. I don't remember what price it was at, but I ran the statistics then and saw that there was less than a 1% chance of being right within his timeframe. No matter who you are, if you are not using more than TA, your knowledge is limited. Don't get me wrong, you can make a lot of money with TA, but you should aspire to learn more.
Guys, technical analysis is not everything. Expand your knowledge as far as you can to see the clearest picture - it will get closer to reality this way. We can only hope to perceive the truth - it is absurdly elusive. It has taken civilization tens of thousands of years to learn most basic truths that we take for granted today. In most cases, only one person discovered the various truths. Aspire to be one of the very few who does see reality in one aspect (near impossible to see the truth in more).
To get to the point of this post, I will be showing you guys the lowest and highest probable price for the week (with 99% confidence).
Without further adieu, let's get into the calculations:
7-day VAR: 2.33*.05*position*sqrt(7) = 30.82% (you will get a number running this calculation, but that number is arbitrary based on position - I have gone the next step and made it a percent)
Read this as: "I am 99% certain the most you will lose holding bitcoin in 30.82% in the next 7 days"
We can take this a step further with two calculations:
1) (position-VaR)/position)*market_price = $ 4,652.24
2) (position+VaR)/position)*market_price = $ 8,798.02
Thus, I am 99% certain the bitcoin will trade within the range of $4,652.24 and $8,798.02 this week. So, if you hear something else from someone else, they are probably wrong :)
-YoungShkreli
P.S. I just want to tell you guys that even though I am the only (I've not seen another - I could be wrong) person on TV who has written code for doing all this stuff and the only one who even talks about statistics used in finance, I am not, by any means, brilliant. I'm sure there will be people who think I am some really old guy who spent a life learning all of this stuff, but I did not. I am a very young person. I am not even a good programmer nor am I a good mathematician/statistician. Anyone of you could do what I have done simply by learning to program for a month and by reading the book: Options, Futures, and other Derivatives. I use Python for all code I write, I would recommend the book: Python Crash Course by Matthes.
