Now since you have this all set up like a very professional Forex seminar, please sir explain to me what you base your analysis on. In forex the currency has movements for a couple reasons, a demand for that currency from the purchase of goods from another country, or economical news movements, and lastly the most unexpected movements that defy all trading logic the well known bank market movers movements. Since cryptocoins have neither a real demand for them and very little news movements, how can you base your analysis on the same movement standards of Forex.
Nice! I am also from an FX background, but not the retail side of things. Thus, I’ve been exposed to equities, bonds, futures , penny stocks – the list goes on. In fact, in practice, you'll find that Crypto Currencies have much more in common with Penny Stocks than they do with any other financial market.
The general misconception retail traders / investors seem to have is that each financial market stands on its own and doesn’t have direct, tick by tick correlations with other markets, which is totally incorrect. I may touch on this in another post.
In addition to that, I always regarded financial markets as the ultimate puzzle because everyone is engaged in trying to solve it, and when you’re solving any puzzle, you have to begin with the perspective “What do I know for sure?”
Is there any bedrock to start off my analysis? Well, one of the only things that can be said with certainty is that markets trend - because you can observe trends in any financial market, in any time era. You can go back 150 years in cotton futures, and there are trends everywhere. The same is true for equities, bonds, short-term rates, crypto currencies – everything.
It would seem illogical that markets trend. In fact, theoretically, markets should discount all information before changing price level. But that is not what they do. And the reason they trend is because our minds just don’t work properly. This quirk in our way of thinking forces us to make estimations on the future based on all the knowledge we have of the past, at the current moment. So although I tend to avoid conceptualizing the market in anthropomorphic terms, markets don’t think. The market simply provides a price that comes about through a collection of human beings - this is what I base my analysis on.
I am just curious. Reading thru this thread was like I was in training for Forex all over again. Truth be told, crypto currencies have nothing backing up neither a fundamental nor a technical analysis. People tradig Crypto are like a bunch of farts in a wind storm, they havfe no idea what they are doing, what to buy when to buy it or why to buy it. That in addition to NOTHING demanding the need for any coin including Bitcoins, I have to say I was astounded at your success. I have my own ideas based on my forex experience as to how you are so successful, but I am curious how you understand how the movements are going to happen, especially with the way some coins die so quickly?
More often than not, and this is especially so with Crypto, the fundamentals are less important than the psychology – thus technical analysis prevails. And simply, when ever you have a collection of human beings buying / selling an asset, there will always be prevailing patterns of movement. These patterns are exposed on the charts.
But don't be mistaken, when I mention technical analysis, I am not making reference to the average guy who uses RSI, Fibonacci, Bollinger Bands and other such (useless) tools to make their trading decisions – I am referring to time-tested indicators such as price action, which can be taken advantage of during a bull run. Pattern recognition – which is used to assess the long-term viability of an asset and expose repetitive price cycles. Order book analysis (Level 2 analysis) to highlight the best time to get into / out of a trade, based on support and resistance.
And to go even further, I would have to say that despite what most people seem to believe - there are hoards of professional traders involved with Crypto, and this is evident in the order books and charts.
As a professional, your whole training and experience with the markets is the complete and entire opposite of the average retail day trader - many times, I see coins being supported with excessive trading volume - simply because there is an obvious trend to exploit. However, the actual process of becoming adequately positioned in a trending market - at the bottom of the trend - would frighten the living daylights out of a novice trader, this is why most people in crypto never win. Even if they do buy into a solid coin that is poised for an extended bull run - they either get shaken out of the market due to fear of a loss and not understanding that there is a prevailing trend, or they liquidate their entire holdings for a measly 100% gain when that coin has all the signs of raking in a 500%+ yield.
If you read through my posts you will see that you can very easily separate the coins that "die quickly", from the strongest performers in the market - and there are a whole lot of strong performers.
It's just that people don't realise this. This is typical though, and is also why only the minority make money in this market.
If a coin hasn't moved 100% within 24 hrs, people assume it to be a dud. Because of this, they ignore those coins that creep upwards in stealth - these coins make 20 - 40% advancements 7 days in a row, then when the laggards finally catch on - after the coin has already moved 200%+ over several days, they dive in (at the top), then when the price falls out of the sky - they complain that crypto is rigged and that only the "big boys" win... when actually, they had all the opportunity to get into the coin weeks before when the volume was low, buy support was low, sell resistance was low - but there was a prevailing trend.
You see most crypto traders will never win - simply because they don't understand why / how a market moves. So they are always "scared."
If I told you to buy into a coin that had zero buy support, low volume for the day, and was somewhere on the backpages of bittrex - you would think I was crazy.
But, each day (guaranteed) that coin will make a 20 - 40%+ advancement - and you will sit back saying.. "it's only moved 10% in 5 hours big deal".. And then that moment will come several days later, when that very coin is sitting on the front page of bittrex at a 200%+ gain with an excessive amount of trading volume - then you'd rush to buy in (at the top) and end up losing out.
You see to win you cant make trading decisions based on comfort... Because that is how the majority of participants in this market make their trading decisions. And we all know the majority losses the most money.
Therefore if "common wisdom" dictates that I should only buy into a coin when buy support is at it's highest, when the daily trading volume is at it's highest - then this is ammunition that you can use to your advantage. You can assume that, when volume / buy support is at it's highest, the rest of the market is in buy mode - thus, to win, you need to be the one selling to these buyers. And the only way you can put yourself in that position, is to get into a coin (that has a prevailing trend) when it looks absolutely terrible - which is usually at "the bottom" of the trend, right before the distribution phase.
That's how you make the serious money in crypto.
