Topic: I can't trade the channels. (Read 349 times)

My last long Bitcoin position has just filled in a wick at £2,649, so now I am long on fiat with no open positions except for a buy at £2,402 in Bitcoin. I still think that the market is fundamentally bearish, and I hope I haven't got out too far before the top. It was interesting to see that the run that took out my last two positions came just after an EMA cross at £2,620. I'm going to have to watch these EMA crosses in future. The depth is still heavily on the side of the buyers.

[EVENING]
The EMA12 has just crossed the EMA26, so it looks as if I got out in time, and we are in for another big drop in the price.

I think the main appeal of the MACD chart is its name. I'm still spending a lot of time in McDonalds on their WiFi. I looked at it because one trader said that it was his primary tool. I think that may be the result of his lack of knowledge rather than its success. The two guys that I find interesting and entertaining are Crypto Kirby, and Karl from The Moon. They use charts that are a bit more advanced than the MACD.

I've been watching some videos by a guy who claims to have been a Forex scalper for 4 years, and he makes some interesting points. I may take his advice as an experiment, and he does advise watching some extra charts in addition to his basic ideas.

I decided that I should be long in Bitcoin in a bull market, and long in fiat in a bear market. That's a pretty obvious conclusion, but a lot of people seem to conceal the concept in chartist talk. I managed to close on of my positions for a small loss, and as I had a previous gain in this string, it wasn't too bad as a start, and the price drop has put it back into a notional profit. I missed closing the other open position by 50 pence, so I still have a lot to learn. I left that open to cover the unlikely event that we have a large correction. I'm still waiting for my deposit of additional fiat to hit my account. I had some problems with the transfer - mainly due to spotty WiFi, and my getting the reference the wrong way round. I should know better than to use unreliable connections when making bank transfers.

[REALITY CHECK]
 Bit coin is nearly back up to the point at which I sold yesterday. So I wasted a nice bit of profit by setting my buy price too low. I seem to be consistently over estimating the price movements, maybe subconsciously I feel that small movements aren't worth it, but I should realise that most of the Internet billionaires got there by taking small bits of profit or income from millions of transactions.

[WEDNESDAY]

Bitcoin is still fighting to get over £2,620 - this is giving me problems as a budding forex scalper. I'm having to learn to sit on my hands when there aren't any decent trades. If you are starting with small trades as part of the learning process, you need the expectationsof slightly larger price movements to justify opening a new position.

While the concept may have some merit, the standard implementation of a MACD is a comparison of two weighted moving averages that are misaligned, and the result is mostly noise.

here is a good explanation on MACD > https://www.babypips.com/learn/forex/macd

also i would suggest you use Stoch RSI along side with MACD as the stoch rsi reacts faster to price movement, the cross usually happens on SR before it does on MACD,  also notice that these indicators are fairly inaccurate on small time frames, and it's always best to use these indicators as a confirmation based on a more solid signs ( Support and Resistance ).

I've just found out about the MACD, and of course, I will have to learn how to use it. Hopefully it will help me to get a whopper ( wait, that isn't McDonalds is it ) before I lose my chips. Lets hope I can make some buffalo wraps rather than chicken wraps, and I can pick up some golden nuggets.

Ignoring that frivolity, a MACD is The Moving Average Convergence Divergence, and it relates to the divergence between a long period EMA and a short period EMA, and it can provide a buy or sell indication. More info when I've watched the video, and I tried to use it.

I trade as a "market maker", so I don't pay any fees directly. I have a variety of wallets, and 3 are fiat - GBP, EUR, and USDC, and your question prompted me to look at possible spreads in the trading rooms. I found some interesting variations in price.

£2,679.62 - XE mid price average between trading rooms.
£2,716.29 - Price in the Sterling room
£2,685.17 - Sterling equivalent of the Euro price.
£2,679.74 - Sterling equivalent of the US dollar price.

Fiat conversions were made using XE.com, and all prices were collected within one minute. I'll make a few more checks over the next few days to see if time of day affects the differences. USDC is their in house equivalent of the dollar, and is the only dollar wallet available to me.

[update]

I woke up this morning to a video by Kirby, and he was saying that the market had been hit by a load of whale wicks that were designed to shake out the geared speculators.  I was expecting to see that my lower sale would have closed, but not much seemed to have happened, and the price is still trading within my specified channel. I'm still showing a notional profit, but it isn't closed and I get the money into my account. I'm starting to get a feel for the price movements ( I hope ), so I might put some more fiat into my account, and try to exploit some smaller movements.

frequent micro gains usually yield more overall profit, but it's so much effort and time wasted. and it's not for everybody, i tried a ton of time to be able to make those fast trades, take little profit and leave, jump on another trade, rinse and repeat. it just never worked for me, maybe i am too old for this already!
i find that that works best for me is mid to long term trades ( regardless of profit in %), i usually make my decisions based on weekly and daily timeframes, i use 4hr to get a zoon-in on my entry and exist levels.  besides sticking to some rules , i find myself not taking that many trades, sometimes a whole week passes with no trade for me. but my overall results have increased significantly when i stopped looking for those small micro gains and allowed my trades to run on larger frames.

1- I get to sped more time with the family, do other things i like rather than staring at my charts all day long.
2- I keep my self stress-free, the noise, the manipulation and everything that happens in small time frames don't bother me.
3- applying what i learned from trading small time frames on large time frames has given me a very good overall results, TA accuracy increases.

i am not really sure what would be micro or mini in terms for profit % , i just find it easier to focus on targets that appear on large timeframe which are usually 15% and above in crypto pairs.
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arbitrage is good if automated, trying to chase those price differences manually gave me a night mare so i ditched it. but i am aware of people using bots to do that.

I have looked at some of the alts, and I've got wallets for some of the content provider ones - Steem and BAT for example. Also, I set up a Dash node, but I'm reviewing that decision at the moment. One of the reasons I opened a BTC <> UTDC trade was to buy some Zilliqa when I started to be traded on Coinbase. Another difficulty with speculating in alts is the need to use Bitcoin to purchase them. The only fiat that I use now is Sterling.

Although I have done a lot of trading in my life, it's all a bit "old school". Random Walk was the hot thing when I was active on the London stock exchange for example. I have never traded currencies, and I still refer to GBP <> USD as "The Cable", I suspect that is still the only currency trade that has its own name. I feel that I need to ease myself into the crypto market, especially as it is such a volatile and heavily manipulated market. I can see that fortunes are made and lost as a result of a deep understanding of TA, Right at the moment, I think that global economies and whale activity are more important considerations, and an overview of TA is more significant for me in an attempt to understand price movements.

I'm evaluating whether frequent micro-gains are better than less frequent mini-gains. Another interesting area is arbitrage between GBP, EUR and USDC in the Bitcoin trading rooms.

[UPDATE]

Well the price is now at £2,700. So which mistake did I make?
- Setting my sale price too high
- Buying too soon.

I was tempted to move some more fiat into my account, and buy some more, but I believe that the immediate market is still bearish. My other alternative is to move some Bitcoin into my trading wallets, but that goes against my investment philosophy.

There are a lot of really solid alts that you can fairly reasonably count on being around in a couple years that you could do the same with. I have been in this industry a while now, and been on every end of this situation from dev team, to market maker and trader, and I am telling you ignoring the alt pairs is a mistake. You just have to have a slightly different strategy, and do some simple due diligence on the alt first. You don't have to risk large amounts to take advantage of alt volatility... you just have to know what you are doing and enter at the right time. It is simple math, the risk is higher yes, but the returns are in a whole other ballpark if you know how to do it right. Once you get some returns take a portion of those and drop them into safer trades or cold storage. Repeat.

didn't really "plan"  to take it out of context  as i have not seen that you were actually trading only actuals , so i assumed you simply don't short bitcoin for the sake of it. but now i see where you coming from.  by the way, do you pay more fees for trading GBP/BTC than trading USD/BTC?

You need to put my comment about shorts into context. A lot of people are making large sums of money by shorting Bitcoin, but you can't do this if you are only trading actuals, and that is how I restricted myself. An uncovered bear faces unlimited losses if he gets it really wrong. You can be a covered bear if you keep the Bitcoin in an external wallet, but that over complicates things. By considering Bitcoin as the currency, and Sterling as the product, then I can treat it as a long position, although in reality I'm executing a covered short in Bitcoin. I know that logic is a bit twisted, but it fits my ideas from past trading. I'm really going for ultimate safety in this trading, although no trading is without risk.

Current trading - My order at £2,705 has completed, so now I need to decide on the price to submit for the closing sale.
My open order to sell at £3,100 is well out of it now. This is the waste of an asset, so I'm going to cancel it, and open a new one for a notional loss. As I think we are still in a bear market, I'll hope to buy that back later at a lower price.

Update - I opened a sale at £2,801. Actually I think I should have made that £2,799, but I'll leave it and see what happens.

well you know, the best strategy is the one that works, i agree to most of what you said but this verse


is just not right, to me , what is more important than the fundamentals is the trend, we are in a down trend, it's always safer to short than to long until the trend direction shifts.

as for trading channel break out, it's really not as hard, and it is very very profitable once done right.

check my thread  > https://bitcointalksearch.org/topic/m.48728669

if you got time you can check the whole post, i kept it updated with all most of the positions i took , most of them were shorts positions. using nothing but support and resistance.

Trying to profit from the channel breakout is a bit more speculative, but one has to be aware of possible changes. My first purchase in this project was not good. I bought just under the support level, and the support then became the new resistance.

My trading relies on two basic facts to minimise risk. The fundamentals for the product have to be strong, and I believe this is so for Bitcoin. You can only make money from a long position. My previous experience has been with shares and commodities, and this has coloured my approach. This morning I had a blinding flash of the obvious, and I realised that I should treat Bitcoin as a currency. This means that a bear market for Bitcoin is a bull market for Sterling. I'm only considering Sterling because I have never believed in the Euro, and in fact I used to call the fractional coin " The Eurine". I think the the Bilderberg puppet masters are preparing to shove it under the bus. The US dollar is a more complex problem, and de-dollarisation isn't helping it. Also, the US banking system is archaic and difficult, and I gave up on my dollar account a couple of years ago.

I've opened a new buy position at £2,704.94, and I'm experimenting with the prices to close trades during the wicks. I chose that one so that it would close as the price went through the £2,705 barrier, but I still haven't decided if it is better to try to buy at a few pence above the barrier. I selected the price because I believe the bounds of the current channel are £2,800 and £2,635, and the price seems to be moving in the upper half. I don't want to keep the trade open for very long, as I think we are still in a bear market.

Following on from my new realisation that it is a dual currency trade, I think I will open a position with the coins I bought at £2,999. Under my old ideas, this would mean I will be making a loss, but my new approach means that I am utilising an unused asset for a possible profit.

Another thing that I am doing is to use a specific Bitcoin amount for a trading "string" , this lets me check the earnings for that string, and to review my pricing strategy.

yes the term "channel" is what lies between potential support and resistance, the only addition to it is that both lines (S and R) must be parallel.  what i meant by there is no such thing as channel was referring to some traders who try to make an imaginary channel based on numbers. for example , saying price channel for 1HR chart is 50$ , so they draw channel lines that are not related to any sort of S and R and keep chasing price.

also the best trades you make is when price breaks out of the channel to either direction, it's most of the time followed by a large move and great R:R ratio.

Well there is such a thing as channel trading, because I'm dong it. I accept that I may not be using the correct term to describe my actions. When Bitcoin is trading sideways, the price stays between support and resistance lines ( as you stated ), and to my mind this means that it is trading within a channel. Several of the TA guys describe this, and they seem to use the term. TA is fine for some, and some of the maths is extremely sophisticated, but many of the projections seem to be self-fulfilling because of the following they get. It is also a great tool for the whales and market manipulators, and because of this, I decided that it wasn't worth the time required to follow all the action. I decided to step back and look at the trading flow, and make ungeared deals when the price approached the channel edge. This isn't going to be life changing, but it is interesting, and profitable in a small way. TA is useful to try to predict when the channel shifts, and the support line becomes resistance. There are a lot of day traders and auto-bots that are doing the same thing. Picking up a load of micro-earnings for little risk, seems to be a better bet than risking large sums for greater gains in my opinion.

there is really nothing as channel in trading.

you need to learn to use support and resistance line, anything else is not to be taken very seriosuly and should be only used if support and resistance are checked.

never really traded GBP on crypto pairs, only trade it on forex, and i could not find the chart on tradingview, but found this on coin-desk, so i drew out the main S/R lines here

this chart is 3 months for data



this is 1 day of data




you always want to buy when price is going down approaching one of those lines, and vise versa.

these are some very usuaful links.

https://www.babypips.com/quizzes/support-resistance-levels
https://www.babypips.com/learn/forex/candlestick_with_support_and_resistance
https://www.babypips.com/learn/forex/support-and-resistance

with only support and resistance and some candlesticks you can be a successful trader. just focus on these basics.

Perhaps you are doing everything correctly, but instead the real problem is that channels don't actually exist. Perhaps your situation is similar to a ghost-hunter saying "I have all the right equipment and this house is known to be haunted, but I just can't detect any ghosts."

I'm only trading in Sterling on Coindesk. I looked at using their in-house dollar linked currency, and I was going to buy some alts with it, but I decided that I'd stick to Bitcoin and Sterling. That way I don't think I can lose. If I buy, and the price goes against me, then I'll just keep the Bitcoin for a couple of years.

I would suggest using alts pairs instead of USD or fiat pairs. There is more risk but also more reward, especially in the case of specific coins set up in such a way that drives regular liquidations such as many POS coins.

That's what I've been doing, and the trade only completes when the channel shifts against me. I need to trade inside the channel.
I think I'm going to have to move the coins I've bought into long term storage, and use some more fiat to start again.

I'll need to wait for the price to drop, and come back in at under $3,480 if it looks as if that is the new lower limit for the channel.

If you can work out when it's going down or up then sure use that.

If you've worked out the current channel why not use that to your advantage. Place a buy £50 above the top and a sell £50 below the bottom and see if you can do anything with that... Typically speaking, it's likely to go one way but this isn't without its risks and I wouldn't try it because I'm just accumulating at the moment. In both bitcoin and lite coin.

For a few years now, I've been a collector of Bitcoin ( well Satoshi really ). I started when it was £xx, and picked up a bit more when it was £xxx. I became a bit more serious when it was £x,xxx, and I haven't sold any. I guess I'm still showing a small profit, even after the big drop. Recently I decided to experiment with a bit of trading to see if I could boost my investment, and I decided to be ultra safe. This means no gearing, and no uncovered shorts. Any bad buys can go into a long term wallet to wait for the inevitable ( in my opinion ) price rise. Bitcoin seems to move sideways inside channels, and I thought I would try to trade within those channels. That is the background, now for the reality.

I don't seem to be able to recognise the channel boundaries, and I always seem to be outside them. This means that I execute a trade at the wrong end of a new channel, or a trade doesn't execute. So far I've bought at  £2,998.98 and £2,751, and no sale has executed. I believe that we are now in a new channel within the range £2,825 and £2,650. My current purchases don't leave me with much room to exploit the bear market. I have opened a sale at £2,759, and I hope to replace that when the price drops again. Now my problem is deciding how to handle my current positions in my mind. The sale will give me a minute profit on one purchase, but a loss on the other. Should I treat it on a fifo basis, or try to match transactions? My instinct is to move the £3,000 purchase out of my coinbase account, and into a long term wallet, and this would remove my mental block. II can then deposit some more fiat, and use that to purchase some new speculative Bitcoin.

Am I being over-emotional here, and should I just consider my coinbase account to be similar to a water butt, and just sell when I think the price is going down, and buy when it is likely to go up. I try to take advantage of the wicks to do this.