Topic: Arepo's Detailed Price Analysis and Projections (Read 14526 times)

i'm glad we're mostly in agreement

you're right of course, all this is fine and dandy but i've got to show that the specific methods of technical analysis are effective at 'uncovering' these patterns. i find that standard indicators like the MACD do indicate simple trends well, as i mentioned earlier, and the properties of price momentum are really effectively displayed by oscillators.

not only do real-world things like closed banks cause regularities, but patterns in human behavior as well. the convenient thing is, we don't have to hypothesize about social psychology -- we just have to rigorously show a pattern in the data.

for the trend-following example, we tend to overreact, and push the price into 'overbought' and 'oversold' states (these are metaphors, admittedly, but give a decent understanding of what the oscillators represent). recognizing that we are in these unstable states helps you anticipate price movement, given other market conditions. i'm reminded of a striking example of this during the rally to $160:

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cool thanks, some quick thoughts before i go to bed


yes information is limited. if you assume the market is efficient, then you dont care if its limited because all information is reflected in price anyway. bitcoin is not that market


you are making assumptions that are not necessarily true.

1. that the 'weekend dip' was in fact a real pattern that would have been repeated whether or not new traders learned about it. this is definitely questionable. sure you can point to the fact that banks are closed on weekends and therefore no new money on gox. but that is more fundamental than technical

2. that the reason that the 'weekend dip' stopped was because of new traders learning about it. if this was true, then the dip should just continue moving up earlier in the week. everyone sells friday in anticipation of the weekend dip, now becomes a friday dip. then ppl try to frontrun again, it becomes a thursday dip. etc


well the EMH is just a hypothesis. you need to decide just how efficient each market is. the S&P500 is about as efficient as they come. its unlikely that you can convince me that TA will work on that market. Bitcoins? way inefficient. thats because its still in growth stage. inside information isnt as important as new projects and wider exposure. that is pretty much what will determine the price. western union makes announcement? price spikes. silk road goes down? price falls.


this is definitely all true. bitcoin is endlessly in price discovery mode and will continue for a long time. it will be a rollercoaster. if you have info that western union will start at X date, you will be undercutting every seller who sells prior.

overall i agree with your post. but my contention has been whether or not you will actually find usable, valid information from which you can profit from, merely by looking at charts of past prices and drawing lines and BIGMACd indicators and looking for shape of erections developing. i exaggerate for humor, but nonetheless the point remains. and in this post of yours, you dont really talk about charting techniques which is probably why i am not in disagreement

and i'm not just some random who is trying to troll all the chartists. i have read many books on TA and devoted a lot of time in the futures markets. i really wanted TA to work. however, nothing ever passed the common sense test. (talking about discretionary trading only here, obviously if you backtest huge data and have statistical evidence, then sure, but in that case, you aren't trading technically, you are trading statistically). Market Profile stuff made sense, but it seemed to apply more to efficient markets like the big indexes

i'd hate to be a talking head, but i'll put in my two cents if you insist.

imho, determining the odds of the price being at a certain point "ever again" is pretty futile. i liked ichthyos model of a gaussian curve for a model of the probability of 'ever' reaching a price point 's' standard deviations away from the present price, or the mean historical price. in this model, the probability of a price point s deviations away approaches zero as s -- > infinity, but is nonzero for all such points.

for time-scales:

short-term: unlikely
mid-term (this year): possible
long-term: see above

yes, i kind of stitched together bullet points of a sort of thesis i'm trying to develop. i apologize for the disorganization.

let me try to build a bridge between the ideas you just mentioned:

the emphasis on information is because trading is a limited information game. this is separate from the price function, which is stochastic, essentially random, which is exactly why no methods of technical analysis can produce 100% confidence.

take the 'weekend dip'. once a thread about it was posted and trafficked to saturation, the effect stopped happening. why? because traders selling early friday and buying back in sunday, profited off of this information asymmetry, anticipating that others were going to sell and undercutting them.

these regularities have been shown to exist, and i do believe they violate the strong form of the EMH, which would imply that a good is at its 'true price' at all times in the marketplace. in practice this falls quite short of ideal. remember how the price doubled suddenly after a long period of consolidation a few months before the block reward halving? the suddenness of the onset of the price discovery phase suggests that the way that price-relevant information is factored into the price is far from ideal, and if you have meta-information -- information of another players' future actions -- you can undercut them profitably.

if you're looking for "never again", Mister Supernode is your man, he has one "never again" weekly

i'd love to hear what arepo thinks about this.

under 50 ever again? what are the odds Mr Spock

i actually appreciate this kind of discussion, johnblaze made a good point, and showed he had thought about it critically. it just bothers me when someone comes out of the woodwork and posts a dismissive comment with no constructive criticism at all

fair enough, and i would agree. my two points were only in regard to TA working as a self-fulfilling prophecy, which is what the other guy inferred with his post. if you are coming from the premise that TA is not a self-fulfilling prophecy, but rather a legitimate system of determining probable future prices, then my two points are irrelevant. my post was in response to his.

but whether it is a legitimate system is questionable (whether or not you can actually extract information that is useful in the same way as inside info is useful)

yes sell your coins today and double them tomorrow. ( no way in hell... )

then buy a really big boat!  

i'm sorry if it was dense. and i realize now i didn't exactly connect it to what i quoted. let me try to summarize more clearly:

"""TA can work even if the two conditions you noted are not met. i propose the following:

a trader using the methods of TA attempts to extract more information from the available price data than others who are not looking for regularities (not doing any analysis).

this creates a difference in the information available to each 'player'. this is profitable for the same reason 'insider trading' is profitable."""

i hope i was able to communicate my meaning this time.

not here to complain, just saw some posts in the other thread so decided to check out what was going on in here. i made one comment "LOL" and he asked me to stop, so i did. then i responded to another guy who came to a legitimate conclusion, but was just not practical

btw i made an edit to the previous post, inviting you to start a real discussion if you understand his point. perhaps you can clarify for us


indeed

I'm not on a bandwagon, just tired of people coming to an analysis thread to complain about analysis  Never take any advice in these forums without a few pounds of salt.

i understand all of the terminology. i dont understand what point he is trying to make.

at one point he claims that prices are random and that is their nature, which is a joke of a claim. then he claims that he can find "coded" information in previous prices. confusingly, he also used similar terms when trying to spout the EMH, which is contradictory

get off the bandwagon, and on your bike

but if its clear to you, please feel free to clarify his point for us all so we can have a real discussion

Maybe try looking up some of the terminology you don't understand.  It's pretty clear to me.

i have no idea what that block of rambling is suppose to prove, other than to convince yourself that your methods have validity. it was not clear at all what point you were trying to make, and it was irrelevant to the disucssion:

my post was in response to the post claiming that TA works because it is a self fulfilling prophecy. while the premise is sound, in practice, most don't do TA, and those who do, don't do TA exactly the same, so it cannot self-fulfill.

anyway


you have not shown that. i have reread your post a few times trying to figure out what your point is in case i'm missing something, but it seems like you are just throwing together random stuff together to try to support your claim.

reminds me of this quote which is wayyyyyy ironic

"The trend is evident to a man who has an open mind and reasonably clear sight, for it is never wise for a speculator to fit his facts to his theories."
-Jesse Livermore - Reminiscences of a Stock Operator

keeping it short, but hopefully clear:

the effects of 'insider trading' suggest that price-relevant information is not factored into the price in an ideal way, but the Efficient Market Hypothesis suggests that most relevant information is 'encoded into' or somehow represented in price -- this information including market sentiment, greed/fear, risk-aversiveness of other players, and the like.

this leads to the idea that profitable information asymmetries between players can form for short periods of time.

from a mathematical point of view, it has been shown (see the Hurst exponent) that autocorrelations exist in price data -- that is, regularities which can be profitably anticipated.

as such, in a simple way, technical analysis is an analysis done on price data to find patterns -- essentially, identifying how the price is deviating from its natural stochastic (random) nature.

and this demonstrably occurs! trend-following is very successful in certain market conditions (see goomboo's journal). this leads to the idea of 'momentum', that it is statistically unlikely for the price to suddenly violate a trend. another simple strategy is measuring the 'rate of change' of price, because 'momentum changes before price changes' follows from basic rules of derivatives in calculus.

i hope i have showed you how it is possible to get at information that may be 'coded' into the price, that others do not have access to, that creates a profitable information asymmetry between players.

--arepo

sorry about that, i must have just read a post of yours when i was writing that. at least i didn't name electric -- he hates triangles hah

edited in the original

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i always find it fascinating how many layers of self-similarity there are in the price function. this is the third 'public test' of fractal analysis, which i'm a little suspicious of because it is lacking in rigor in that it is just as prone to apophenia as elliot waves. i've been outlining a number of shapes that i can define in rigorous terms, and once that list is complete i intend to do statistical analysis on price history data to hone the method's precision.

until then i've been focussing on the 'bubble shape', a type of bearish reversal that occurs across varying scales in many bullruns in bitcoin price history. i've identified three versions of this pattern in price data since just April 1, and used their shape with great success in anticipating price movements in similar market conditions. it's just an amazing idea that the larger shape of price can mimic smaller structures that have already formed within its history, exactly like a mandelbrot set!

since the 'fractal hypothesis' is still in its infancy, i encourage feedback from the sharper minds of the community i've learned so much from other posters here, that i've come to see it as a community of very intelligent people, and an excellent collaborative atmosphere for new ideas,

--arepo

I didn't outline any pennants, but it looks good so far with the bounce to $118.

this would make sense, if two things were true:

1. the majority of the trading volume was made up from people using TA
2. the TA that they used were all the same

i reckon that neither of those two are true. 1. is pretty straightforward. most of the volume in the markets is pure speculation and/or silkroad, not from people looking at charts and making disciplined trades. 2. is blatantly not true, as you can easily open up any two TA threads in this forum and find hacked up charts with wildly differing lines drawn at the most random places

it is a good thought though, and definitely the correct line of thinking. but even if it were true as you said, and even if those 2 points above were present, then the prediction and trade would be working because everyone is taking action in the same direction, and hence moving the market. it would be the same as calling everyone up and saying, "ok we all buy at $100." the trade would not be working because of some magical TA strategy that works when X indicator crosses Y indicator or because Z line of support or because of ABC head and shoulders and cock and balls pattern.

*10-day hourly scale*



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looking awfully oversold on the short-term scale. the downward momentum has been exhausted. i expect a downwards breakout from the pennant evolve outlined, but we won't break under the $100 support.

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instead, the oversold signal confirms some fractal analysis that suggests we'll retest but bounce significantly into a larger bearish pennant, peaking and then breaking downwards again to test the $100 support in the next 48 hours.

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will $100 hold then is not yet clear.

--arepo