The only index you should know to successfully buy and sell Steem – Introducing the JS Index!
Trading Steem is not hard. In that part steem(it) development team has done a great job. Compared to the establishment Steem is a huge step in the right direction of fairness and openness.
How the JS index works
JS measures the net result of the buyers and sellers actions.
Everyone buying Steem (or anything else) in any financial instruments market does it to profit. Interesting distinction is however if those buyers or seller do expect their profits short term or long term.
How short term Steem “speculators” act?
They buy steem and expect return in a matter of days, weeks, months.
How long term Steem “investors” act?
They buy steem and expect return in a matter of years. They buy steem, and in this particular high devaluation environment that Steem is quickly power up .
Measuring the net result from the Steem “speculators” and Steem “investors” buying, compared to Steem owners selling can give us the ultimate tool to measure the future price movement of Steem (in the short to medium term).
And it turns out to be incredible easy
All of the described above is nothing more than the … increase/decrease of the total Steem held by exchanges! (with a few caveats I will keep proprietary for now)
How this matters… give me a practice example.
OK here it is.
Steem hit a local low of 0.001224 btc/steem on 08/29 4:30 UTC. Since then the price is generally higher. Should you buy (out of FOMO) or wait for the price to come down to even lower levels sometime in the near future.
If JS index has fallen down since 08/29 (as it has indeed) this means that all the buying (price increase) was by short time speculators. So, if no news justifie their buying exuberance, you can expect soon those speculative buyers to give up/cash out of their short term position and the price to continue following the long term trend of the JS index itself.
Initial JS index
The index is set at 1000.000 as for 2016-07-26 12:56:12 UTC
Current JS index
As of 2016-08-31 03:03 (UTC) the value is: 553.650
[EDIT]
Below is a chart of JS Index and Steem price for July 27th to Aug 30th NB some days have more than one data point.
JS Index for 09/01 Posted
Also someone willing to answer this question will help me improve the precision of the index probably but no luck so far.
any backtesting (albeit a very short history available) results to reflect on?
yee, I should have put a graph for the available history. I will do it in another post maybe shortly.
The other backtesting is this: I would have shorted steem about a week after I started the index. Unfortunately I do not know of any place one can do it. So, for now I am powering down and selling. Will buy back and vest when the index stabilizes and probably grows for at least 3-4 days.
Today's update on the JS Index posted
wow man $110 SBD better get your investment back damn.
What "net result"? I'm really not sure I understand what you're doing here.
How would one transfer SBD to poloniex ?
Log in to Poloniex, get your deposit memo, then go to your Steemit wallet and transfer SBD to account
poloniexwith the memo that poloniex gave you.Very interesting. Upvoted and followed.
💋 @halo 💋😇
Clever. So a decrease in the JS idx means that more STEEM/SBD is held by poloniex and bittrex?
yes.
But the important part is to think of it not held by polo and bitrtrex, but held by 1. people who either looking to sell 2. bought it but are looking to sell in a short time frame after their purchase. The group #2 otherwise will immediately withdraw and vest it and by doing so reduce the amount held by exchanges.
Right.
Right, it is literally an indicator of the relative holdings of the exchanges (plus your proprietary magic), but because of the design of Steem it is a strong indicator of the holdings of short-term traders. It's nice, I like it. I assume you'll be posting updates regularly?
That is the plan.
Lol. I was just working on something very similar. Not quite an index, but using the same data points. Cheers.
Eager to see what you have come up with.
Thank you for information!