BTC updateThe Illusion of Certainty in Markets & The science of Bias
In trading, the desire for certainty is one of the most dangerous psychological pitfalls a trader can fall into. While BTC may be displaying bullish behavior, the fact remains that we cannot "know" what will happen next. This fundamental truth often clashes with human nature, as our brains are wired to seek patterns and predictability. However, markets are probabilistic, not deterministic.
As price unfolds, the picture becomes clearer , not because the market is revealing some preordained script, but because each new piece of data refines our understanding of probabilities. The most successful traders accept this reality and remain fluid, adjusting their perspectives as new information becomes available.
The science of Encoding Poor Information
One of the greatest cognitive traps traders fall into is becoming married to their desires or biases. This happens because of the way our brain encodes information:
1. Dopaminergic Reinforcement
- When we form an expectation (e.g., "BTC is bullish, so it must go higher"), and the market moves in our favour, our brain releases dopamine , reinforcing the belief that we were "right."
- This creates a confirmation loop, we start filtering information to support our bias and dismiss evidence that contradicts it.
2. Cognitive Rigidity & Belief Encoding
- The prefrontal cortex , responsible for rational thinking, is often overridden by the limbic system , which governs emotions and survival instincts.
- If we've emotionally attached ourselves to an outcome, our brain literally rewires itself to treat contradicting information as a threat rather than a useful input.
3. Sunk Cost Fallacy & Commitment Bias
- The more time and energy we invest into a particular belief, the harder it becomes to let go, even when new information suggests we should.
- This is why traders hold onto losing trades , refusing to accept new probabilities because it would require admitting they were wrong.
How to Stay Probabilistic & Avoid Mental Traps
1. Detach from Outcomes Focus on executing a well-defined process , not on proving your prediction was "right."
2. Constant Re-Evaluation Every new price movement should be treated as new information that either strengthens or weakens existing probabilities.
3. Active Neutrality Never assign a fixed narrative (e.g., "BTC is going to explode higher"). Instead, frame it probabilistically:
- "BTC has an X% probability of continuing higher, but a Y% probability of reversal if conditions change."
4. Train Yourself to Embrace Opposing Views If you are bullish, seek out bearish arguments and assess their validity.
5. Use Mental Stop-Losses for Biases Just as we place stop-losses on trades, we must be willing to "cut" faulty narratives when price action disproves them.
Final Thought
The market is not a certainty machine—it is a probability engine . The sooner a trader embraces uncertainty, the sooner they free themselves from emotional bias. Traders don’t predict, they adapt.
It’s not about being right. It’s about staying on the right side of probability.
Economic Cycles
Refreshing the conversation. Showing my learners under the hoodRecently I've been lucky enough to mentor an 18 year old into the world of crypto and the markets
Being able to speak with wisdom instead of trying to factor in a ridged mindset gave me the freedom to speak about where MTOPS truly originated from
Listen in with an open mind
Probabilistic RealmI remember taking the CMT exam, where one question referenced the Efficient Market Hypothesis (EMH), which asserts that price action is purely random. To avoid losing points, I had to select “random” as the correct answer, despite knowing that market behavior is far more structured than EMH suggests. Despite of passing I still won't ever agree that market is random.
Prices are neither random nor deterministic. Market fluctuations follow a chaotic structure, but chaos is not the same as randomness. Chaos operates within underlying patterns and scaling, whereas randomness lacks any order or predictability. Although chaos makes predictions difficult, keep in mind that the universe is not random— effects still follow causes in continuity . No matter how chaotic a system may seem, it always follows a trajectory toward a certain point.
For example, in Lorenz’s model of chaos, the trajectory formed a pattern resembling the wings of a butterfly. Understanding these patterns of chaos has practical applications. In the market, even a slight fluctuation can trigger irreversible changes, reinforcing the idea that we cannot rely on absolute forecasts— only probabilities .
The market is not necessarily a reflection of the economy; rather, it reflects participants’ feelings about the “economy.” The human emotional component drives the uncertainty and chaos, making it essential to visualize price dynamics exclusively through "systematic" lens.
Market Structure Is Self-Referential
Markets move in proportion to their own size, not in fixed amounts. Price is arbitrary, but percentage is universal – A $10 move on Bitcoin at $100 is not the same as a $10 move at $100,000. Percentage metrics reflects this natural scaling and allows comparability across assets and timeframes – A 50% swing in 2011 holds similar structural significance to a 50% swing in 2024, despite price differences. Using log scale is a must in unified fractal analysis.
Percentage swings quantify the intensity of collective emotions—fear, panic, euphoria—within market cycles. Since markets are driven by crowd psychology, percentage changes act as a unit of measurement for emotional extremes rather than just price fluctuations. After all it's the % that make people worry..
The magnitude of percentage swings encodes emotional energy, shaping the complexity of future market behavior. This means that larger past emotional extremes leave deeper imprints on market structure, influencing the trajectories future trends.
The inverse relationship between liquidity and psychology of masses partially explains the market’s fractured movements leading to reversals. In bullish trends, abundant liquidity fosters structured price behavior, allowing trends to develop smoothly. In contrast, during bearish conditions, fear-driven liquidity contraction disrupts market stability, resulting in erratic price swings. This dynamic highlights how shifting sentiment can amplify price distortions, causing reactions that are often disproportionate to fundamental changes.
PROBABILISTIC REALM
Rather than viewing fluctuations as a sequence of independent events, price action unfolds as a probabilistic wave shaped by market emotions. Each oscillation (outcome) is relative to historical complexity, revealing the deep interconnectedness of the entire chart that embodies the “2-Polar Gravity of Prices.”
Fibonacci numbers found in the Mandelbrot set emphasizes a concept of order in chaos. The golden ratio (Phi) acts as a universal constant, imposing order on what appears to be a chaotic. This maintains fractal coherence across all scales, proving that price movements do not follow arbitrary patterns but instead move relative to historic rhythm.
The reason why I occasionally have been referring to concepts from Quantum Mechanics because it best illustrates the wave of probability and probabilistic realm of chaos in general. Particularly the Schrodinger's wave equation that shows probability distributions. Key intersections in Fibonacci-based structures function as "quantum" nodes, areas of market confluence where probability densities increase. These intersections act as attractors or (and) repellers, influencing price movement based on liquidity and market sentiment. Similar to Probability Distribution in QM.
Intersections of Fibonacci channels reveal the superposition of real psychological levels, where collective market perception aligns with structural price dynamics. These points act as probabilistic zones where traders’ decisions converge, influencing reversals, breakouts, or trend continuations. Don’t expect an immediate reversal at a Fibonacci level—expect probability of reversal to increase with each crossing.
To prove that Efficient Market Hypothesis is wrong about prices being random, I'd go back to a very distant past from current times. For example, price fell 93% from 2011 ATH, reversed and established 2013 ATH.
Using a tool "Fibonacci Channels" to interconnect those 3 coordinates reveals that markets move within its fractal-based timing derived from direction.
If prices were random, this would have never happened.
The bottomline is that viewing current price relative to history is crucial because markets operate within a structured, evolving framework where proportions of past movements shape future probabilities. Price action is not isolated—it emerges from a continuous interaction between historical trends as phases of cycles, and liquidity shifts. By analyzing price within its full historical context , we can differentiate between temporary fluctuations and meaningful structural shifts justified by the fractal hierarchy. This approach helps identify whether price is expanding, contracting, or aligning with larger fractal cycles. Without referencing historical complexity, there is a risk misinterpreting patterns from regular TA, overreacting to short-term noise, and overlooking the deeper probabilistic structure that governs price behavior.
FIRST IT WAS MONTHLY REJECTION, NOW WEEKLY DOUBLE TOP WITH BTC!With the weekly double top, BTCUSD outlook is looking bearish and will likely dip to its mean…
N.B!
- BTCUSD price might not follow the drawn lines . Actual price movements may likely differ from the forecast.
- Let emotions and sentiments work for you
- ALWAYS Use Proper Risk Management In Your Trades
#ethusd
#crypto
#btcusd
Took an L on XRP/USD - Lessons Learned!Trading is a journey, and not every trade is a winner. My recent XRP/USD position didn’t play out as expected. I went in with a bullish bias off the 4H timeframe, using Smart Money Concepts (SMC) for direction and entry. My analysis was aligned with inducements, CHoCH, and order block retests, but the market had other plans this time.
Key Takeaways:
1️⃣ Stick to the Plan: The setup followed my strategy, and though it didn’t work out, I trust my process. Losses are part of trading.
2️⃣ Risk Management is King: Keeping my risk low ensured this loss didn’t impact my account too heavily.
3️⃣ Market Lessons: Every loss is an opportunity to refine, reflect, and improve for the next move.
Even the best setups can fail, but consistency and discipline keep us in the game. The journey continues!
If you’ve been trading XRP/USD or faced a similar outcome, feel free to share your thoughts or feedback. Let’s grow together as traders.
#TradingView #XRPUSD #Crypto #Losses #SMC #Forex
Bless Trading!
XAUUSD 2/2/25XAUUSD remains clearly bullish this week. We can see this through price action and, of course, the Orion bias, which is also bullish. We've maintained a bullish bias since the last weekly low was created, and we’ve successfully followed this entire upward move over the past couple of weeks.
If you followed along, congratulations on a strong long-term trade! However, we are now focusing on intraday and day trading opportunities. Please note that we currently have no target, as price is sitting around the all-time high. We expect price action to continue reaching new highs, but exercise caution, as we are in an exploration phase, meaning price is moving into uncharted territory. Look for rebalancing, which presents opportunities to buy back into the next expansive move.
We have the V2 Entry Level Indicator running, and the dotted lines represent our high-volume lows—key areas of interest for identifying expansive moves into new highs. Right now, we have two priority lower areas, which we will monitor for potential re-accumulation of long positions. However, since we are in an exploration phase, price may continue moving higher without retracing to these levels.
Watch for one of two scenarios:
A pullback into the lower areas, followed by an expansive move upward.
Continuous expansive moves, with new lows developing along the way.
Regardless of how price unfolds, our bias remains the same unless the bias changes with the daily—we anticipate further expansion to the upside.
Trade within your risk parameters, follow your rules, and always let Orion guide you.
EURUSD 2/2/25Heading into this week, EUR/USD is the first pair we are looking at. We have a new filter applied with our Orion Entry Level V2, as well as the Orion System running in the background.
The bias has been shown as bearish, so we are looking for the following. Note the two pre-established highs above, along with a high that is yet to be recognized, as we have not joined the new trading week to confirm that candle closure. That gives us three highs to target and ultimately a heavy cluster of lows marked as the lowest target, along with a high-volume low just below the current price.
We're looking for an expansive move down, but overall, we would love to see a pullback into the highs beforehand, remembering that the higher timeframe is giving us our bearish bias. So because of this, we will look to follow it.
Remembering that we only take trades if the entries are given, and until we hit the points we want to trade from, we do nothing more than let the market run its course.
Trade to your risk, follow your rules, and always let Orion guide you.
AAPL 1.22.2025 IdeaMy assessment is a fair price on the stock of $230 per share. AAPL now sitting at $222.5, I believe there is a high probability for a 5% up move within a few months.
Entry would be favorable if AAPL =< $220. I would enter direct shares here.
AAPL is of those companies that will be affected by tariffs. However, AAPL has benefitted from expanding its services economy. In other words, AAPL is not reliant on iPhone sales to drive their FCF. This opportunity is one for those looking for a discount on a MAG 7. Just be patient! But be flexible and anticipate further disruptions.
KAS Cycle Update 01/31- Completing the Feb to Beginning of MarchKaspa is about mid-way through its current 60-day cycle. As it did not show particular strength after the last cycle low, I suspect it will chop around until the next daily cycle low (DCL), which should also be a Weekly Cycle Low (WCL).
To show that this year-long range has been an ACCUMULATION pattern rather than a DISTRIBUTION pattern, Kaspa has to stay above 0.10 and DEFINITELY not lose the lower box.
Invalidation of a distributive top will be confirmed if it breaks above the most recent blue trendline.
From the longer trendlines (the strong red below and the upper blue), Kaspa is currently in a compression wedge.
The next DCL/WCL should be telling. If Bitcoin (still the king) can show some strength (it is also coming up on a DCL/WCL), Kaspa should follow, and the next DCL/WCL, when confirmed, should be a great entry point for a long.
The yellow path is my current expectation of Kaspa's path (bullish bias).
Thanks, Uncle Camel (CamelFinance,) for the insights on cycle theory.
USDJPY Shorts Based on Current Re-DistributionBy combining Wyckoff and SMC principles we have a clear guide on what to expect, and what to do when it happens.
Patience is the name of the game, so set your alerts and hang tight until then.
- Option 2 could turn into a short term swing trade (until we reach daily demand levels)
GOLD/XAUUSD Aiming for New Highs? While the US and BRICS (Brazil, Russia, India, China, and South Africa) aren’t in a formal trade war, tensions are rising. BRICS nations are working to reduce reliance on the US dollar, challenging its dominance in global trade. This “de-dollarization” effort and geopolitical shifts, like sanctions on Russia and US-China disputes, are fueling uncertainty. The USD surged by over 7.1% and was the only currency to see a positive growth in 2024.
What This Means for Gold?
Gold thrives during uncertainty. As BRICS push for alternatives to the dollar and tensions with the US escalate, demand for gold could rise:
Hedge Against Currency Risks: If BRICS reduce dollar usage, the dollar might weaken, boosting gold’s appeal.
Geopolitical Tensions: Gold is a safe-haven asset investors flock to during economic instability.
Global economic shifts are driving gold’s narrative. Trade wisely!
Apex out!