Topic: Chart analysis (Read 1626 times)

It really is not. The stock markets are dominated by high-frequency trading algorithms running on custom-made machines with built with FPGAs colocated in the exchanges. There a are some trading bots being used on crypto but they are much slower because of the latency caused by internet connections. Your chances of success are far higher in crypto trading due to the absence of these HF alogos.

Hello to everybody,

I have question about chart analysis. Are there any differences betwen chart analysis in traditional stock exchange and crypto exchange?  Considering that the crypto exchange is much more emotional in decision making? Can we use exactly the same analysis techniques or do we have to adjust them to our crypto reality? If yes, please give me some tips what I have to change that the analysis would be more accurate. 

 

The chart of investment can help you a little. Your remaining experience and experience can benefit you. Just like an alphabet, the first letter is a chart.

Hello to everybody,

I have question about chart analysis. Are there any differences betwen chart analysis in traditional stock exchange and crypto exchange?  Considering that the crypto exchange is much more emotional in decision making? Can we use exactly the same analysis techniques or do we have to adjust them to our crypto reality? If yes, please give me some tips what I have to change that the analysis would be more accurate. 

 

That's Ok, I wasn't thinking you selling anything. I have experience from many years in investment banks and know some professional traders in prop shops. Every single one of them trades purely from a Depth of Market. That shows bids, asks, volume at price and cumulative trades at the current price. They only use charts to make a note of possible support and resistance areas first thing in the morning before they start.

Heatmaps are just the latest in a long line of snake oil being sold to retail traders. How can knowing where there were some orders that got pulled previously were help you? The only thing that matters is what is happening right now. Are orders getting filled or being pulled, are there icebergs producing orders as fast as the ones you are seeing being filled. These are the only things that will tell you what is happening now so you can make a good guess what will happen next.

If you want to see how pro traders do it I think you can find youtube videos by a guy called John Grady who is about the only trading educator I know of with prop trading experience and who is an actually profitable trader. (I'm not recommending any of his services, I haven't tried them, I'm just pointing out the videos show what a pro is actually looking at).

Also if you want to have a go yourself you can sign up for a free demo account at Trading Technologies (trade.tt). It's the software the vast majority use. The demo is 10 minute delayed data from the CME and CBOT, but you can pretend it's live.

On what time frame does this volume cumulation occur? Also what price resolution do you consider appropriate for crypto markets? Since the volatility is so high, the center trade volume might change quite often.

EDIT I mean volume cumulation of VAP rows, not the middle one.

Hello to everybody,

I have question about chart analysis. Are there any differences betwen chart analysis in traditional stock exchange and crypto exchange?  Considering that the crypto exchange is much more emotional in decision making? Can we use exactly the same analysis techniques or do we have to adjust them to our crypto reality? If yes, please give me some tips what I have to change that the analysis would be more accurate. 

 

On what time frame does this volume cumulation occurs? Also what price resolution do you consider appropriate for crypto markets? Since the volatility is so high, the center trade volume might change quite often.

EDIT I mean volume cumulation of VAP rows, not the middle one.

It's always more interesting to hear opposing opinions rather than to intesinfy your confirmation bias by positive feedback. Actually I have connected the interface to other exchanges but the responsibility to execude trades is too much to handle right now. Just the mere fact exchanges change their API here and there plus their own issues with reliability is this feature on par with gambling right now

If you would like to check out my app someday without registration and providing email, just PM, I would send you an invitation code.

Yes technical analysis skills from forex trading can be also used in analyzing crypto charts. Most of the elite crypto traders were forex traders before, they got attracted towards crypto because market is more volatile than forex and they can make profit every day on price swings.

Crypto market is still driven more by emotion and psychology decisions than forex.

I see your point. The MD Trader looks interesting. I will look into it more, possible implementing it into my app. Even though it might render itself as useless, I always learn ton along the way.
Nice to chat with you. Really appreciated

The charts give the investor a hint but it certainly does not make your guess correct. But there is no effect if you make a mistaken guess. There's a big mistake people made. People think of charts as 3 -5 different graphics. Not all charts are variations of this 3-5 graph.

The Heatmap I'm talking about has been "the latest greatest tool available to traders" for the last couple of years. If you look back at the history of it when indicators like MACD first came out snake oil salesmen were selling it for $10k. Then the chart package makers started to include it free, so the snake oil men moved on to the next big thing, rinse repeat.
I'm aware of Bookmap Xray https://bookmap.com/ $49 - $99 a month, being one of the first, now everyone is doing it and it'll be free in all charting packages in a couple of years.
In the end, all Heatmaps are is a visual representation of where orders were and that information is of no use to a trader at all. What I want to know is what orders are there now and do they get filled. So whether it's a chart of what trades occurred in the past or what orders were in the past I don't want to know.

DoM is the trading interface. TT that I mentioned before call it MD Trader but they get very protective of their copyright and patents so everyone else has to call theirs a DoM.
They show all the information a trader needs in numerical form and that's all the pro trader will look at.

Watch this: https://www.youtube.com/watch?v=JXaDX-vtAw0



Not that I can find right now, I'll have a deeper dig, but this mainly comes from conversations with traders.

Edit: I found a decent review of Bookmap Xray https://www.tradingschools.org/reviews/bookmap/
tl;dr

Great insight, thank you for the links! I will definitely check the.
I am not completely sure though if by heatmaps we mean the same thing. I might be using the term wrongly. You mentioned DoM. That is what I am visualizing with "order book heatmap". I agree it does not provide complete info about DoM due to existence of hidden orders and traders executing orders real time. I believe ask/bid ratio can be complementary indicator of changing volume, canceling pending orders, etc. I might be wrong, no argue with that.

I am still backtesting the trading history heatmap but it looks like a good indicator of market sentiment and trend strength. Do you have any papers or blog posts opposing this charting style?

Pros: Stable software that does exactly what it is supposed to do: display trading volume.
Cons: The information from the graphical display is a nearly useless, set of new age mumbo-jumbo, "market feelings", and hard to prove or disprove trading concepts. A playground for the wandering imagination.

That's Ok, I wasn't thinking you selling anything. I have experience from many years in investment banks and know some professional traders in prop shops. Every single one of them trades purely from a Depth of Market. That shows bids, asks, volume at price and cumulative trades at the current price. They only use charts to make a note of possible support and resistance areas first thing in the morning before they start.

Heatmaps are just the latest in a long line of snake oil being sold to retail traders. How can knowing where there were some orders that got pulled previously were help you? The only thing that matters is what is happening right now. Are orders getting filled or being pulled, are there icebergs producing orders as fast as the ones you are seeing being filled. These are the only things that will tell you what is happening now so you can make a good guess what will happen next.

If you want to see how pro traders do it I think you can find youtube videos by a guy called John Grady who is about the only trading educator I know of with prop trading experience and who is an actually profitable trader. (I'm not recommending any of his services, I haven't tried them, I'm just pointing out the videos show what a pro is actually looking at).

Also if you want to have a go yourself you can sign up for a free demo account at Trading Technologies (trade.tt). It's the software the vast majority use. The demo is 10 minute delayed data from the CME and CBOT, but you can pretend it's live.