Increase the difficulty level on yourself. Often, traders like to make things a lot harder for themselves than they need to. Everyone is seeking a silver bullet, truth is "less is actually more".
Dow Theory is actually the Grandfather of technical analysis.
If you have never heard of this, or even if you have and brushed over it, you are missing out.
Some people will say things like "it's over 100 years old it can't work in today's market"
Yet, humans have changed very little in those last 100+ years. Sentiment driven by fear and greed is where the secret is hidden.
Let me explain by saying Dow theory has 6 "rules" (tenets).
1) Market Moves in Trends Markets have three types of movements: primary trends (long-term trends that last for years), secondary trends (medium-term trends that retrace parts of the primary trend), and minor trends (short-term trends that are typically noise).
You will notice I used the weekly for the larger and the daily for the second.
When I journal my trade setups; I simply use a traffic light system red lines size 4 for primary, then orange line 3 for secondary and green size 2 for the trigger phase. In addition to that, I mark the trends with 3 boxes and arrows pointing up down or sideways.
The second rule;
Each trend has three phases:
Accumulation Phase. In this phase, informed investors start buying or selling, counter to the general market opinion.
Public Participation Phase, more investors notice the trend after it is already underway, and media coverage expands, driving the trend further. (Wyckoff called this a mark-up or mark-down phase)
Excess Phase (or Distribution): At this point, speculation is rampant and detached from actual value, leading informed investors to prepare an exit.
This is where a lot of Wyckoff, Elliott and other tools such as Smart money concepts all overlap.
Then, the 3rd rule.
The market reflects all available information, such as economic conditions and sentiment. Therefore, movement in the market averages considers and reflects this information. (in simple terms, discount the news).
4) For a trend to be validated, different market averages must confirm each other. For example, the trend in the Dow Jones Industrial Average should be confirmed by the Dow Jones Transportation Average. If one index moves to a new high or low, the other should follow suit to confirm the trend.
(I like this one less, but in some instances it can make the next move very obvious.)
Rule 5) The trend is your friend, until the end. Until you see a clear change in the direction, a market shift. The trend is still in play. This one, I feel most just can't comprehend.
As you can see below, I have marked up the extreme high and low, I know both my primary and secondary trends are down. So now, I can use my EW bias or start looking for a Wyckoff schematic. (if I believe we are about to see a shift in the trend.)
You can start to look for information for areas of interest, look into volume and volume profiles.
The last rule. Confirming the trend volume expanding in the direction of the primary trend. For an uptrend, volume should increase as prices rise and decrease during corrections. In a downtrend, volume should increase as prices fall.
In this example, the Fibonacci levels line up, the volume is slowing, the EW count makes some sense and zoomed out you can see a shift.
Now, with all of this info - we could look at "areas of interest"
We are in a demand zone on the higher time frame.
At this stage, there is no trade entry, but if we were to view a change in the character we could simply take a trade as a pullback on the primary trend down.
Something like this;
You see, all you are doing is following the trend and taking a look at other tools, auction areas, fib extensions, an EW bias, and hints of a Wyckoff schematic. But under the hood, the 3 trend principle is a simple-to-follow process.
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years' experience in stocks, ETF's, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Lewisdaniels
Bitcoin Smart money part 1Here is a little post on why the SMC ideas are part of the bigger picture - I wasn't sure if these new video ideas are capped to 15minutes.
Sure I read that somewhere.
I'll do another video in the next few days either way.
For now I think we are still busy going NOT FAR.
Link to other post;
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years' experience in stocks, ETF's, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
The Parallels of Trading and GolfAs both a Professional trader, but amateur golfer. recently tried to explain to someone the similarities, especially in the emotional side of golf and trading.
I thought it might make an interesting article.
Golf, much like trading, is a sophisticated blend of skill, strategy, and psychology. While trading involves navigating financial markets, golf requires skilful manoeuvring across challenging terrains. Both activities demand a strategic mindset, the ability to adapt, and the resilience to handle emotional highs and lows.
The Right Club for the shot
In golf, a player selects from a variety of clubs, each designed for a specific type of shot and distance.
In trading, an investor uses different strategies tailored to particular instruments and timeframes. Just as a golfer wouldn’t use a driver for a close-range putt, a trader shouldn’t apply a long-term investment strategy on a 1-minute timeframe.
The key is understanding which tools to utilise for the setup, whether it’s choosing a wedge to escape a bunker or a driver to blast the ball down the fairway.
Different Scenarios
Golf courses are full of diverse challenges, from long par 5s to intricate par 3s as well as those horrible 4s too long to drive, yet technical. A golfer must adapt their approach to the difficulty of each hole, just as a trader must respond to different market conditions.
A poor shot on a par 5 might still recover with subsequent careful play, similar to how traders can bounce back from a loss with well-planned actions in subsequent trades. Success in both fields relies on adapting to circumstances while focusing on the overall objective. Remember there are 18 pins on a golf course, one bad shot doesn’t cripple the account (I mean, doesn’t end the game).
Managing Emotions
Golf is notorious for inducing a wide range of emotions, from the frustration of a missed putt to the euphoria of a perfect drive. Trading elicits similar emotional responses; the thrill of a profitable trade contrasts sharply with the despair of a loss. You ever notice that you take profits early and let losses run too long? Yup; not wanting the ball in the woods is the same, yet we still reach for the driver.
Both golfers and traders must manage their emotions effectively to maintain focus and make rational decisions. Emotional discipline is vital; letting emotions dictate actions often leads to mistakes, whether it's over-swinging in frustration or impulsively buying or selling a stock. Risk management in either scenario.
Learning and Improving
Professional golfers continuously work to refine their swings and improve their game. Similarly, traders must commit to ongoing education and self-improvement. Doctors or lawyers don’t become professionals after watching one or two videos online. Neither does a trader.
Analysing past performances, whether it’s reviewing a golf game or assessing trading results, is crucial for identifying areas of improvement and fine-tuning strategies moving forward. But only you can do this “honestly” claiming a birdie when it should be marked as a bogey is only cheating yourself.
To Master the Art
The pursuit of mastery in both golf and trading is a lifetime journey.
Neither field offers shortcuts to success; both require dedication, practice, and resilience. However, the sense of accomplishment and reward from mastering a challenging golf course or successfully navigating complex markets can be immensely satisfying and still that one bad shot is soul-destroying.
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years' experience in stocks, ETF's, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
The Bitcoin LottoRemember when the excitement of the lottery was all about the potential of life-changing wins from just a small ticket price? Fast forward to today, and Bitcoin has emerged as the new frontier of that thrilling potential. Once priced at a humble $1,000, Bitcoin was accessible and brimming with promise. Today, with its value as high as $60,000, the landscape has undeniably transformed, offering new opportunities and considerations for investors worldwide.
Bitcoin isn't just a digital currency; it's a revolution that's reshaping financial markets, much like the anticipation of hitting the jackpot. However, unlike the traditional lottery, Bitcoin investment isn't purely about luck—it's about smart, informed decision-making, historical insight, and future potential. Imagine being part of a technological evolution that's not just a game of chance but also a calculated step toward financial empowerment.
When navigating these markets, you want to stay clear of the echo chambers. We have had tails of "98k next month and $135,000 In December" back in 2021.
The main issue with the sentiment at the current levels, are it seems everyone and their dog bought Bitcoin under $20,000 at the exact bottom. They were also calling longs at 69k.
It's an inflation beater, it's just had 12 ETF's approved, there's a price multiplier, sell your house and buy Bitcoin. It looks like Trump might win back the White House and of course, he has endorsed Bitcoin.
The question shouldn't really be "where does this go" instead it should be "why isn't it there yet".
I've joked a couple of times - If you bought a house at 69,000 in 2021 and now in 2024 it's worth 59,000 should you sell it or hold it, I have had replies like "You should have bought Bitcoin"...
This is not a bash against Crypto; it's knowing the value and understanding the perception vs reality dilemma.
The controlled aspect of the move up from 15k to 73 and that high being just enough of a liquidity grab much like 65k to 69k. Years apart, means there is a lot of control in an asset many claim "Cannot be controlled".
The sentiment was all about Freedom and liberty; no institutional control, no government control - Go Trump, Go Blackrock.
My questions remain, If you were lucky in at sub 10k prices - you have had a good trade (providing you profited obviously) Paper gains are not wins.
But where does the additional funding come from for a double of it's current price? Why are we not at 100k+ already after a Trump endorsement, a halving, a price multiplier, 12 ETF's approved?
The world of Social media has made it easier for keyboard warriors to catch every bottom, sell every top (yet never sell anything) and claim paper gains to the moon.
Investing doesn't need to be the same as a lotto ticket. It just needs a good understanding of why liquidity moves the way it does and who's side the profits usually come back to.
Anyway - food for thought this weekend! Have a good one.
Stay safe
So...Against popular belief, it is what it is.
unfortunately, it's not where people want it to be.
People want to think I am anti Bitcoin, or negative to the cause. Again, this could not be further from the truth. I'm just one of the lucky ones in early and care very little what it does at the moment.
It's clear people try to find bullish narratives especially when gone all in, but you have to remain a realist to make good money. Well at least over and over again.
I've shared various posts and stream over these last couple of years and still not likely to win popularity contests or crypto influencer of the year when you don't have rhyme nor reason to scream for 100k with a silly face on each thumbnail.
COT data still shows a negative LF sentiment - this is not big boys getting REKT, it's big players profiting at a premium (whose selling to the retail crowd?).
I have spoken to some level headed players in the space; one of which was Ryan at Uncomplication and we spoke about why the options would be good or bad for the short-term. Kind of kike an "if this, then that outcome".
As you can see from these options; option 1 and the preferred move would have been an extended accumulation phase. Thus giving enough fuel to take a real shot at the moon.
I also shared posts about the interesting movements down low, prior to this move up.
Now the issue for option 2 or 3 playing out was the limitations to the upside without a run on lower liquidity. So again, not needing to visit 12k or 9k - just to grab stops and cause serious doubt is enough in situations like this.
You might have already seen the Wall Street Cheat Sheet;
These things are as old as time.
As option 1 didn't play itself (we did not accumulate enough) the move up has all the hallmarks of a larger degree corrective.
Hence, in the ideal scenario; we would have seen a pullback allowing "fair value" to be accumulated, instead the CVD showed an existing positive position meaning profit taking up high. Thank you by the way.
This move would have been on the cards & the chances are we could be. However, the concern and issue is this caps the upside on a colossal scale to a little over 100k before a very, very long term corrective kicks in.
Still waiting on $135k as every influencer and their dog screamed for. Yup, still waiting from Nov 21, 22, 23 and nearing 24.
The question you need to ask, is after 12 ETF approvals and retail screaming MASSIVE Net-inflows, we just had a halving and of course the golden price multiplier. So the question is; what's pinning it down? where is the lead balloon?
Option 2 we talked about was if the price had created a classic ZIG-ZAG corrective move; 48-52k would have been optimal. The reason this was worse than option 1 was it means a longer time in limbo.
Now option 3 paints a combo of the two as you technically have either a weak move impulsive up leading to a long corrective or a corrective B giving a running flat B hence another slow burner down before some real momentum can be had.
I covered every major move over the last couple of years, now it's becoming more institutional it's only time. Just because retail wants 100k tomorrow, doesn't mean it has to play ball - especially not in the timeframe majority of retail want it to happen.
I think the move needs a natural play both ways here; now we have massive liquidity sitting lower and of course a lot of eager, anxious buyers higher. COT is a big telltale sign for me.
I also covered and published the move options in the book'
So when I say, nothing has changed. It means since talking about this the first time - we are still playing out the worst of the 3 options so it seems.
I'll finish with - 12 ETF's x Price Multiplier + Halving = WHY NOT $1 million yet?
Take it easy and see you on the next post.
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
New Volume Footprint option on TradingViewHi all,
This is the first (stream replacement) educational video with a very quick overview of volume. Tradingview just released the new Footprint Beta tool. It's something I asked them for a long time ago, so I am glad it's finally here!
In this video I cover the time-price-opportunity tool as well as visible and fixed range. Leading into footprint.
This is not a deep dive, it's more an intro to and how these things come together. If there is enough interest in this idea I will create a sequence based on trading volume in depth.
Thanks for watching! See you on the next stream/idea.
Making your first million is the hardestAfter that, it's leverage.
The issue for me as a long-time trader, is people these days don't seem to have time, patience or the ability to absorb information.
They read an article or watch a few seconds of a stream and assume they know!
I am not just talking crypto, I mean in general. The attention span of a fish.
I read a pretty decent article by this guy @holeyprofit
He talked about Bitcoin Mania with a lot of truth, most people won't want to hear.
Article here
The issue is the whole market right now are currently hinging on or near their all-time highs, Gold, Bitcoin, SPX (S&P500) stocks such as Meta, NVIDIA and loads of others.
Instead of shouting for even greater highs, the question should be "what is sustaining the rally?"
For the majority of retail traders, they assume it's different this time. Gamestop was up until it was not.
The issue is that they never learn. They have no concept of time factors and the assumption that markets only ever go up is the very reason the majority of traders stay broke.
Crypto is a really interesting space, when I first got involved in 2011, it was a punt. I got lucky, but buying cheap and selling high is what most people strive for. Yet, reading posts and social media content - nobody sells, they all buy low, stacking sats when the price drops. So where is the profit? Well paper gains I assume.
Game stop...
Not to focus on Crypto; the markets as a whole can be profitable and just like Kenny Rogers said - "if you're going to play the game boy, you got to learn to play it right. know when to hold, know when to fold, know when to walk away and know when to run"
Every hand's a winner - every hand's a loser.
Key message there!!!
Trading vs investments - if you are looking to make it big on one deal, that's different than profiting from the market every week, every month and every year.
Risk management is key, scaling your account, cutting losers quickly and adding to winners. Many won't understand this concept. Markets go up and everyone is a genius in a bull market.
Once you start scaling an account, the trade percentages in terms of rewards you seek don't matter the same. You don't need 10x returns on your thousand dollars.
A 3% win on your million-dollar account is a different game.
Back in 2021; I wrote this educational post about the psychology of the markets. I used the Simpsons as a way to get the message over.
Markets breathe and the rise and fall, rise and fall.
Once you realise you can take from the market consistently, you will see the stress disappear, and the care of price up or down matters less. Your investment criteria changes and the scope gets wider. This is how you scale from that first million, into the second and third. Not having all eggs in one basket and hope it goes up forever.
What if gold drops 10% and you are long? can you afford a 5 year spell on the investment you have? These are the kinds of questions you need to be asking yourself.
What if Bitcoin's halving is a buy the rumour, sell the news and we take another 3 years to get back to a new ATH?
"ah it's different this time" - yeah I heard all that in 2021 when certain influencers were calling for $135,000 worse case within a month. We are 2024 and still roughly half of the way to 135k??
I know for you guys who want to learn and progress you would have read this far; for those who "already know" they have stopped reading about 4 lines in and seeing a picture or 2. They leave a comment due to their keyboard warrior mindset and fish-like capacity for thinking.
The point is to ensure you deploy proper risk management, especially here near the tops of a lot of these markets, trail your stop losses, and don't forget to cash out your profits. Paper gains can quickly become paper losses. If you're serious about money making, be prepared to diversify, be prepared to sit on your hands, keep cash in your pocket as well as be prepared to take calculated risks.
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
The Complex RealitiesMany people seem to think this is Bullish. Forgetting the fact (obviously) that it's still 50% from it's $69,000 High.
Classic case of retail only seeing what retail want to see and are blinded by every other opinion, including backed by sound logic.
When I said all that time ago - let's go long.
There was method to the madness, I had already been personally long several years. I explained why as a money manager it was now a thing of interest.
Fast foreword a little - the re-accumulation phase. This was the most interesting call of all for me.
You see, what I knew would be happening here was the bigger players had been entering and would use techniques to both enter and exit on their own terms. This was simply stunning to watch play out in front of your own eyes.
As we rallied away from the re-accumulation zone - retail got greedy and majority of social media was calling for 100k. Instead we had a very distinct pattern start.
I tried to warn people, but 100k had their eyes glazed over!
All you need to ask yourself, is who's selling. No I don't mean then. I mean now.
Here's the hint.
As we rallied from that 28k, it was pig ugly, you couldn't mask that move up with digital lipstick.
I explained why it would be capped. It needed to go down 3-4 and it would go up 4-5 but it already had it's name marked just above the old All Time High.
So we get up to a new high - yet again, calls for 100k came long and loud, 250k, a million dollars. Then it was apparent, people just threw numbers out in the air, rainbow stock to flow models and the reality was, they had less than half a clue!
Plan A, B, C and D was all "long only" again not listening to rational or logic.
As we dropped down "As I said we would" the next obvious move was the re-distribution. I explained how this would play out. No surprise, it did!
We hit $15,000 a long way from the $135,000 worse case your local influencers were shouting for.
We now start a long-term accumulation.
People with the memory of a fish, think that this move up will clear their red bags. Need I remind you we are still 50% of the ATH.
What can we see out on the monthly?
Look again
Maybe the monthly is too much to wait for?
Here's the weekly view.
The angle, the volume, the overbought nature...
None of these scream - Bullish intent. Retail pumps the price by a couple of thousand dollars and it's again cries for the moon. The Blackrock approval of it's ETF pumped the price artificially and Institutional players are taking advantage. The accumulation phase, is happening, but it is not done - yet.
Before you jump into the comments with "Long Only" - back it up with logic, let's create the great debate.
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
People want to earn but not learnThe issue is everyone wants to make money (well, maybe not everyone) but nobody wants to take the time to learn how to do it properly. This is NOT a sales pitch by the way! it's FACT!!
People often ask why I bash influencers so much, it's mainly for this reason. Majority of noobs, come into trading expecting to make a fortune. If only it was that easy, every man and his dog would be a professional trader.
Over the years, I have talked about things like Bots and AI that are programmed to make you money - think logically, if again it is this easy wouldn't the founders go to the bank, loan $10million based on their results and just not bother selling and shilling to customers and retail. NOBODY wants to provide customer service, especially to the world's population.
Unfortunately, regardless of the market. Trust me if you stick around long enough you get to see this behaviour in Forex, Commodities, Stocks and more recently crypto with a splash of A.I.
The story goes pretty much the same way. "man (or woman) hears about an opportunity to make money through a thing called trading, they do their research which leads to the old You of Tube and that leads to "Lamborghini promises from kids with fake watches, drawing random trendlines on 3 minute charts" There's often a "sign-up" bonus if you click their shill link.
So let's get this straight, they make money on watch time and those links you click.
The reason I chose fish in the image above, is that most people have memories that last about 2 seconds. Mark Cuban said "everyone is a genius in a bull market" Algorithms work and influencers claim to be experts with 3 months of experience. Easy to show in a market only going one way.
Trading is hard enough, let alone having the ability to lose money from scams.
If a trading algorithms promises a 90% win rate - run and don't buy it.
==============================================================
There are fundamental things to do and you can deploy to get you off on the right track. Firstly think of the obvious. 90% of new traders lose 90% of their money in only 90 days. Hence a 50% sign-up bonus whereby you think you gained "free cash" often has small print that you can't access it until you lost your original investment.
Affiliates tend to get 25% or more of the deposit - the exchanges know full well, your about to lose your money.
Second thing I try to emphasis for newer traders, is that you need to treat trading as a profession. You wouldn't watch a video and expect to be a doctor, you also wouldn't buy an algorithm or Artificial Intelligence software and expect to become New York's latest Hot Shot Lawyer You see where this is going?
There is no secret sauce, no silver bullet and no short cuts.
If you want to trade and make money trading, you need the basics. You need to keep doing the basics well and evolve your mindset more than a strategy. Areas that will really help you include proper risk management. If your willing to be sat in negative 20, 30 or even 50% equity positions. This won't take you long to lose your entire trading pot.
Instead risking 1-2% with a risk strategy of 2 -1 or greater. it's a slower game, but it keeps you playing the game. If you take a 3 or even a 4 reward trade with only 1 risk. For every time you are right, it's giving you 4 times as much as when you are wrong.
Imagine winning 20% of your trading days and still being at breakeven... simple 1:4 ratio.
This is only one small aspect to keep in mind.
As I mentioned above, if strategies or software is pitched with high percentage win rates - run. You need to understand the market acts differently and past results do not indicate future performance. Everyone is a genius in a bull market, remember.
You do not need to go looking for the silver bullet. These strategies do not exist, instead spend the time working on strategies that can be consistent in various market conditions. This is no small task, your strategy might identify entries in a counter trend differently than it would in say a ranging market.
The answer to resolve this, is BACKTESTING Don't just run your strategy on replay mode, although @TradingView has a great little tool for this.
Spend the time to look at things such as "repainting" this means that when your strategy triggers an entry, does it disappear and reappear. If so, do some manual back testing. Then Dig deeper and analyse the type of market condition it was more profitable or less profitable. This could be things like "I lose more on a Monday, compared to other days" or when the market goes sideways, It triggers too many trades.
I've written several articles here on pure education. Here's a few examples.
In this post (worth clicking on) it has a whole bunch of lessons inside.
Think of trading like you would a university course, there's plenty to learn but you can have some fun along the way!
Stay safe!
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Bitcoin made complexAs someone who has been around Bitcoin a long time, I find it interesting to see people try and find their own "edge" from how they utilise on-chain metrics, to liquidity maps and sometimes even deeper with things like the energy consumption or BTC mined.
The last couple, most recent years - Bitcoin has been moving towards it's institutional position and that has been something incredible to watch first hand as it slowly unfurled.
The logic can be simplified and following the larger players and their intentions can be very lucrative. The major issue with statistics and metrics is that these can also be spoofed, manipulated and written in ways favourable to the cause. **Caveat - not always, but can be **
What gets me is when a local 'influencer' comes up with why Bitcoin will ping some arbitrary figure just because it sounds rounded. I haven't once heard someone say, it's likely to hit $237,500 followed by some logical argument.
Here's some simple logic.
Bitcoin's market cap. At $69,000 we saw a cap of 1.3T roughly. To obtain this number you can do the math by knowing how many coins in circulation and times that by the price. This of course will be ever changing, new addresses and price fluctuations coupled with more coins until 21m is hit. So you can be rough on your calculations without stressing.
Here is a snapshot of the coins in circulation
Take this now with the current price lingering around $27,000 you have a market cap.
Why does this matter? Well, it doesn't really, other than to guestimate what kind of additional money in-flows would be required to make Bitcoin as valuable as the influencers claim.
Let's use the current number 19,491,306
Times that by the price claimed and you can guestimate a Market Cap.
19 million, 491 thousand, 3 hundred and 6 times $250,000 (often used figure)
The question then becomes - where does the additional money come from?
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In this image, you can see the steady growth of the tokens/coins in circulation
Or here the transactions per day.
How about the energy consumption?
You see, none of this actually matters when analysing the charts.
Instead, understanding the picture painted by the larger players in the game, can give you hints as to where and why next. You take the snapshot of the COT (Commitment of Traders) report.
This has allowed me to assess every major move in the Bitcoin chart, the logic for each swing is smacking you square in the face.
These moves are not as random as you think.
The market is simply an algorithm seeking liquidity. Nothing more complex than that.
Instead these clowns come up with figures like $250,000 and quotes like 98k next month and 135k the month after, without any logic or rational as to how or where the money is coming from. Instead of moving up to $135,000 the price drops to $15,500 that's an awful lot to be wrong. Why? ZERO logic or clue as to what actually moves the market.
Imagine selling at the top?!
If the smiley laughing emoji hadn't have been used, it could have been one awesome call!
Instead of looking in the wrong places, learn to understand where and why. Here's another interesting topic on this point.
Anyways, enjoy the rest of your week!
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Correlation in the marketMarket correlation in the financial space that plays a crucial role in investment strategies, risk management, and portfolio diversification.
It refers to the degree to which the prices or returns of different financial instruments move in relation to each other. Investors and traders use correlation analysis to make informed decisions about asset allocation and to manage risk effectively.
Understanding Correlation
Correlation is measured on a scale from -1 to +1
Positive Correlation equals two financial instruments have a positive correlation, it means they tend to move in the same direction. If one instrument's price or return increases, the other is likely to increase as well. A positive correlation of 1 indicates a perfect positive relationship, while a value close to 0 signifies a weak positive relationship.
Negative Correlation Conversely, is when two financial instruments have a negative correlation, it means they move in opposite directions. If one instrument's price or return increases, the other is likely to decrease. A negative correlation of -1 indicates a perfect negative relationship, while a value close to 0 signifies a weak negative relationship.
No Correlation : When the correlation between two financial instruments is zero, there is no discernible relationship between their movements. Changes in one instrument's price or return have no bearing on the other.
Importance of Market Correlation
Market correlation is essential for several reasons:
Diversification: Investors use correlation analysis to build diversified portfolios. By combining assets with low or negative correlations, they can reduce the overall risk of their portfolio. When one asset performs poorly, another may perform well, helping to mitigate losses.
Risk Management: Understanding how different instruments correlate can help investors assess the risk associated with their investments. If a portfolio is heavily concentrated in assets with high positive correlations, it may be more vulnerable to market volatility.
Trading Strategies: Traders use correlation analysis to develop trading strategies. For example, pairs trading involves taking long and short positions in two correlated assets with the expectation that the spread between them will narrow or widen.
Asset Allocation: Asset managers consider market correlations when deciding how to allocate resources across various asset classes (stocks, bonds, real estate, etc.). A well-balanced allocation can enhance long-term returns while managing risk.
Correlation Among Different Instruments
Market correlation extends to various financial instruments, including stocks, bonds, commodities, currencies, and more. Here are a few examples:
Stocks: Correlation among individual stocks can vary widely. Stocks within the same industry or sector often have a positive correlation due to common market influences. However, stocks from different sectors may have lower correlations or even negative correlations.
Bonds: Correlations among bonds depend on factors such as interest rates, credit quality, and maturity. For instance, long-term government bonds tend to have a negative correlation with equities, making them attractive for diversification.
Commodities: The correlation among commodities can be influenced by factors like supply and demand dynamics, geopolitical events, and economic conditions. For instance, gold is often negatively correlated with the U.S. dollar.
Currencies: Currency pairs exhibit different correlation patterns. For example, EUR/USD and USD/JPY often have negative correlations because the U.S. dollar is on the opposite side of these pairs.
OK, so what does correlation look like in real terms?
Have you ever noticed that when a certain currency pair rises, another currency pair falls? This is correlation.
I recently wrote an article here on TradingView around the "whole Economy"
DXY is a great indicator for many instruments including Gold, SPX and of course Bitcoin. In that article I explained how I rise in DXY would trigger the drop in Gold, we went from 1985 to 1915.
Interesting facts.
Canadian dollar has the highest correlation with crude oil due to the significant proportion of Canada's GDP reliant on oil. While historically AUD has a strong relationship with gold.
So........
Where does market correlation and Blackrock Bitcoin ETF fit in?
First, let's use Blackrocks own definition of an ETF. (available directly from their site)
An exchange traded fund (ETF) is an investment fund that invests in a basket of stocks, bonds, or other assets. ETFs are traded on a stock exchange, just like stocks. Investors are drawn to ETFs because of their low price, tax efficiency and ease of trading.
ETFs seek to provide the performance of a specified index, such as the S&P 500, and typically have low fees. Like mutual funds, ETFs offer investors diversified exposure to a portfolio of securities, such as stocks, bonds, commodities and real estate.
ETFs are popular because of their low fees, tax efficiency, liquidity and transparency. Since the first ETF was launched in 1993, the ETF industry has grown substantially, with more than $3 trillion now invested in ETFs.
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I've read countless posts on social media recently claiming Blackrock approval would bring $15 Trillion into Bitcoin, read the above note from their own website "Since the first ETF was launched in 1993, the ETF industry has grown substantially, with more than $3 trillion now invested in ETFs.
So let's assume they own the whole market and all $3 Trillion went directly into the Blackrock ETF. We have to remember the market cap at $69,000 was a little over $3 Trillion. This is far short of $1million a coin price predictions based purely off an ETF approval.
Now to my point.
ETF market correlation refers to the degree to which the prices or returns of ETFs correspond to the movements of their underlying assets or benchmarks. This correlation can have significant implications for investors.
ETFs are often used for portfolio diversification. Understanding the correlation between ETFs and their underlying assets helps investors assess the effectiveness of their diversification strategy. Low-correlation ETFs can provide better risk reduction benefits when added to a portfolio.
Hmmmm...
Correlation can change based on market conditions. During periods of economic stress or heightened volatility, correlations between assets may increase as investors seek refuge in more defensive assets, potentially leading to correlations converging.
The composition of an ETF's underlying assets or securities matters. For instance, a sector-specific ETF may have a high correlation with the performance of stocks within that sector. Bitcoin does not have the "stock" backing, so this will be done via the OTC Bitcoin price.
Which then brings us to the ability to use inverse or leveraged ETFs to hedge against market downturns or amplify returns during bullish trends.
In Blackrock's case, it is more likely a tactical Allocation aimed to adjust portfolio allocations and enter the crypto space.
Remember, this happened. It's not a negative, these guys will accumulate for the long run and not expect things like $250,000 Bitcoin by Christmas.
Valkyrie's ETF.
Just remember, the professionals make money for a living.
It's not as correlated as you might have thought in the sense of
"Blackrock in, retail traders get rich".
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Against the grain - BitcoinControversial.
People don't like it when opinions don't align with their own beliefs. It's human nature, however - even when the obvious is smacking them in the face, they still want to reinforce and find support for what is inevitably wrong.
I've talked before about the possibility of Government or WEF being behind Bitcoin. It would not surprise me one bit. It's an immutable ledger and all of the 3 letter agencies around the globe can't find the inventor...
Secondly, people believe it to stand for freedom. Yet with the KYC and AML regulations, it takes nearly as much paperwork to own Bitcoin as it does to buy a house. (nearly) It's not like the FBI can seize it - oh wait, yes they can. Its not like China can limit the use, hmmm OK maybe. Binance will never stop people from withdrawing their own funds. Oh yeah that too.
The issue is for me, is - CLEARLY there is an opportunity, even for me one of the lucky ones, been a Bitcoiner a long, long time.
What does it need to thrive? well, almost the opposite of the wild west mentality seen today. Gone are the days where average Joe can own a few thousand coins. it's more likely that they will be spending around $5,000. Some of course more, a lot will have less to invest. Volatility means the wild price swings can make it profitable whilst using leverage. But to make it grow, it needs stability. Regulation will assist to attract larger operators.
On that note - larger players does not always mean price goes up.
A few days later, Valkyrie joins the stage.
Now this is actually a good thing, these types of investors have a 15 year fund vision usually. So it doesn't mean - they join the party and the price sky rockets tomorrow. Clearly...
The issue right now is we have Mooon Cloooowns attending these blockchain/crypto conferences, it just shows how immature the market is currently. These ETF's are not designed for retail to make a fortune, their there for the Elite to take more from retail.
You have muppets calling for 100k on every post.
Sheep following along, just as I said at the top of this article. They want to reinforce their own WRONG belief. Or maybe its sympathy, "someone else knows how I feel, we can relate"? I don't know what it is to be honest, but it's clearly not healthy or profitable.
The one thing I have said time and time again, is the beauty of Bitcoin becoming institutionalised is that it makes it less volatile and easier to read and analyse. The more regulation and solid foundation it has, the more profitable for day trading it becomes. Of course, it is not what the average retailer wants to hear trading their micro account and hoping to become a millionaire in one trade. But for Bitcoin to move beyond current highs and into the 100k level or more, it needs to establish a good foothold of it's current accumulation.
I saw a post yesterday saying 2025 forecast price $925,000 - Now to give that some real perspective.
At it's current All Time High, it had a market cap of $1.3 Trillion
What kind of market cap would you get with a price of $925,000 per coin? Do the math and help me understand where the additional several TRILLION comes from...
OK so now for some logic.
People like Saylor have made publicly their position.
Post available here
So of course, with that much weight other institutional players will know the fair value levels without the research. Price can gravitate towards these levels allowing the accumulation weighted average to stand out like a sore thumb!
Back in the day, I got introduced to Bitcoin, not as a trader but as a tech investor. Needless to say, I had a nice little run. Unfortunately as a trader I wasn't able to post due to some money management non disclosures around tech investments made. So it wasn't until the obligations passed I could post on this topic publicly.
The obvious signs were clear from the migration from a fun thing and toes in the water of many angels and VC's - into a more tradable asset class.
Fast forward a little and the re-accumulation only highlighted the involvement of much, much larger operators.
I talked about this on the @TradingView show with Stefan and how the composite man plays his part in the more established markets.
During the move, the re-accumulation showed signs of the control and the future direction as well as give a clear indication as to where the cap would likely be.
Of course, it played out as expected and against popular belief we were off to the moon. I shared the logic for the drop.
This was the first set of signs that Bitcoin was here to stay and becoming more interesting with each passing swing.
As we dropped to the target level. Yes that too.
Marked up months in advance...
The next move up was ugly, so - what did that mean?
Well, it simply meant again, we were not likely to see 100k or 250k or some arbitrary figure plucked out of the sky by people who have no clue how to do proper analysis.
CASE IN POINT.
We could then anticipate another capped move up, seeking liquidity.
I shared why this would be the case back in August before the November drop.
The expectation was for the price to drop down 3-4 in Elliott Wave terms and rise 4-5 before dropping on that liquidity grab above the old highs.
Then of course, we did just that.
Some other obvious moves started to appear in the price action and again just reinforces the institutional control of the Bitcoin price.
So what is the expectation, as I have said in most of my recent Tradingview streams. It's a larger scale accumulation. For the price to break above All Time Highs, it needs to garner it's position. The higher the price you expect, the longer sideways we are likely to go. (although it's not as simple as that).
I get sick and tired of price predications like 100k next week or 250k EOY.
Don't fall for the BS. Take your time and do your own due diligence.
Anyways, over & out.
Take it easy!
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Conspiracy or something moreI wanted to post this post to get comments and thoughts of others here.
Have you ever seen the film "In Time" ??
Imagine you switch out the countdown timer for Bitcoin, after all it won't be long and everyone can have them embedded under the skin.
If you haven't seen the film, here's a CHATGPT explanation summary.
OK so what does this have to do with trading or Bitcoin?
Blackrock and the ETF's is a big play for Bitcoin, but maybe not in the way majority of retail seem to think it is. When you really stop to think - let me know your thoughts.
Also latest Tradingview stream earlier.
www.tradingview.com
Have a good one guys!
Well, as a long time cyber security investor (patents in the space also) I find it hard to believe the powers that be, can't seem to figure out one who created it and two how to regulate it and other crypto. It's a bit odd given it's an immutable ledger tech.
So What I wanted to see, is what other people think - both good and bad, pros or cons, ups and downs?
Level up your understandingThe Liquidity game is much, much easier than you think.
Most people only want posts that align with their own beliefs, the reality is Bitcoin is becoming institutional and the more players coming does not simply equate to prices rising.
Logic will tell you, these "professional money makers" will want better prices, the accumulation phase on this scale will have retail torn apart. Every $100 rally will feel like the time is now and every $50 drop will feel like the end is near.
I've shared countless posts and live streams here, talking about the transition.
Here's a whole new set of things to think about to educate yourself on the current situation.
First of all here's one of the latest streams going into detail of some of the logic.
www.tradingview.com
In educational terms here we go.
When price moves up and volume goes down, this is called divergence.
Imagine you're at a party with your friends, and you see two people dancing together. One person is dancing really fast, moving a lot, and having a great time. The other person is dancing slowly and not moving much. This difference in their dance styles is like volume divergence in trading.
In trading, volume refers to the number of shares or contracts that are traded in a specific time period. It's like how many people are buying and selling stocks or other financial assets.
Volume divergence happens when the price of a stock or asset is going in one direction, like going up, but the volume is not matching it. For example, the price might be rising, but not many people are buying or selling it. It's like the dancing person who is moving fast (price going up) but not many people are joining the dance (low volume).
Ok so step one, there is a clear divergence of volume...
Next
I can guarantee some people will question the relationship to the price.
Well. I used a box to measure 50% of the move here, just to highlight the obvious. Look left and see the level to volume actually peaked higher on the right and then dropped off, so argument no longer valid. Secondly, the orange line represents the green spike in volume that we lack in the current move.
Third point;
Look at the Weiss wave moves, again I have covered this in several educational posts here as well as many of my streams, if you don't know what this is. Go back and look through the posts. I often use Weiss to justify a 3 wave in an Elliott wave move. It can quickly highlight the obvious level of impulsive nature. Or in this instance, the lack of.
Zoomed in and then over to the monthly timeframe.
So what you need to understand is that with lack of impulsiveness and clear divergence, what else can you see that backs up the logic?
How about using Oscillators?
The monthly stochastic clearly showing overbought.
And an off the shelf OBV showing sideways balance
If you can learn to read these simple points, your already onto a winner. Many newer traders have strategies that often include RSI, MACD or Moving Averages and 9 times out of 10 it's on too small a timeframe. "If in doubt, zoom out"
Combining logical arguments to figure out where you are on the chart can help you develop a much better picture, if you still want to trade smaller times, then you have a bias based on the bigger picture.
OK - so next, let's take a look at a slightly more advanced view.
This is CVD (cumulative delta);
What does the numbers mean?
Imagine you have a piggy bank, and every day, you either put money into it or take some money out. The total amount of money you've put in or taken out is like the cumulative delta.
In trading, cumulative delta is a way to keep track of the buying and selling activities in the market for a particular financial asset, like a stock. Instead of money, we use something called "contracts" or "shares" to represent the buying and selling.
When traders buy a stock, it's like they are putting money into the piggy bank. And when they sell the stock, it's like taking money out of the piggy bank. The cumulative delta keeps track of the difference between the number of shares bought and the number of shares sold throughout the day or a specific period.
This image above tracks the numbers for each swing.
When coupled with other tools such as Footprint levels, you can see where the higher levels of liquidity is sitting.
Now combine the stages above. Let's recap.
Bigger players coming in will want better prices.
We have divergence on volume.
Weiss waves lack impulsiveness.
Oscillators oversold or show sideways balance.
CVD levels still mostly negative.
Footprint key levels have wider gaps to the next layers of liquidity.
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Now, what else would be worth looking at? Well. one tool I have shared many times in the posts and streams is called COT.
COT stands for "Commitment of Traders." It's like keeping track of who is doing what in a big game, but instead of players, we are talking about traders in the financial markets.
Imagine you are playing a game with your friends, and you want to know who is on which team. You might have a list that shows how many players are on each team and what roles they play, like who's a striker, who's a defender, and so on.
In trading, COT is a report that shows us how many traders are on each team, so to speak. It tells us how many traders are buying and how many are selling certain financial assets, like commodities (like gold, oil) or futures contracts (which are like agreements to buy or sell something at a specific price in the future) AND of COURSE BITCOIN.
The COT report is released by official organizations, and it's based on data collected from traders who are required to report their positions in these markets.
Why does this matter? revert back to bigger players in the market coming for Bitcoin...
just like in a game, knowing which team has more players or which roles are in demand can give you a clue about the game's overall strategy.
When we look at the COT report, we can see if there are more traders buying or if more are selling it. This information helps understand the market sentiment.
If a lot of traders are buying, it might mean they have a positive outlook, and the price of the asset could go up. On the other hand, if many traders are selling, it might mean they are not so optimistic, and the price could go down.
In COT terms, there are two major players I look for in the reports.
Asset Managers
COT Asset Managers are like assistants for the big investors, like hedge funds or investment firms. These big investors have a lot of money to invest in different things, like stocks, commodities, or other financial assets including Bitcoin.
It is the Asset Managers' job to take care of these investments and make sure they are managed well. It's like they are the guardians of the funds.
So Asset Managers view of Bitcoin currently seems to be positive.
Now for the second player I look at in the COT report.
Leveraged Funds
Imagine you a bank that allows you to borrow money. You then use that money to invest...
Leveraged Funds are a bit like that. They are investment funds that use borrowed money, or leverage, to try to make bigger profits. These funds can invest in different things but in this case their investing in Bitcoin.
Here's how it works:
Regular Investment: Let's say you have $10, and you decide to put it in a normal bank. Over time, your money might grow a little with interest, and you'll have more than $10.
Leveraged Investment: Now, let's imagine you have another bank called a leveraged fund. Your bank give you an extra $10 as a loan, so you have a total of $20 to put into this leveraged bank account. This means you can invest twice as much as you originally had!
However, there's also a risk with leveraged funds. If the investments don't do well, you might lose more money than you initially had. For example, if your $20 goes down to $15, you still need to repay the $10 you borrowed, so you'll end up with only $5 of your own money left.
The summary here is that larger investors use leveraged funds, so unlike Asset Managers who have a very long outlook. The Leveraged Funds element of the COT report is smaller timeframes but still a lot of volume.
So, what is their current view?
Whilst we have a positive long term outlook. COT would suggest we are not completely ready to shoot off to the moon just yet.
I have really tried to over simplify the post here for the sake of education. There's a lot more to each individual section, but knowing these basics will set you off on the right path.
Bitcoin becoming institutional is a great opportunity if you know where to look. These moves are far from random as you can see in this post below.
Anyways! take it easy and good luck out there!
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Professional view of Bitcoin's HistoryI have posted countless posts about Bitcoin, shared educational content many steps of the way. To understand the logic and trade your next big opportunity, you need to have a good feel as to where it has been. More importantly, why it has been there.
So, let's start off with the why. I am one of the lucky ones, I first got introduced to Bitcoin in 2011 - just happened to be in the fintech space and a long time FX/Stock trader. When I first saw Bitcoin I knew it was interesting, but had no concept of the scale or the possibilities.
Fast foreword a few years I started unloading throughout it's first real Bull run. Why? Well, as a trader I wasn't looking for lottery wins, looking more for good returns on the investment. (I wish I knew, what next) Don't get me wrong, it was an awesome run and ended up one happy chappy, but at this stage in Bitcoin's life it was too early to "trade" - this was more an investment vehicle.
As the price rallied, my other hat was hearing other VC's and Angels talk about Bitcoin but with a kind of scepticism, yet a fear of missing out. The issue is, Venture Capitalists are more about wealth preservation than wealth creation. You could write a book on this topic!
What I was seeing, is the VC's would look at other Blockchain based investments and make their decisions based on a simple ' is Bitcoin up or down '
After the drop late 17 into early 18, there seemed to be a different vibe in the family office, LP, more institutional investors. This vibe was one that kinda said "if it survived the pummeling, maybe it's safer than we expected".
Now, if you think VC's are all about wealth preservation, the LP's (Limited Partners) in essence the money behind the VC's, as well as other types of investments. These guys are another level, it's all about longevity, long term strategies, these are not trading moves up and down this is a long term play with a tiny amount of their pie. (which is often still in the Billions).
It wasn't until we got to this point, that as a trader more than a Tech investor - Bitcoin become interesting.
I shared a post at the time explaining why it was interesting, this was called "Re-accumulation"
You can click this post and go through to see it in detail.
It was due to this playing out to the penny, the next stage become obvious. You see, many retail traders assume one thing when it comes to investing like this. That is Big players come in and price goes up. So many jump in, this is the liquidity for these bigger players to cash out. Like I said, as a professional I am not looking to invest $1,000 to make $10 Million. We are looking at 10x, 20x bank it. Go again...
Knowing what was on the cards based on the level of re-accumulation just below and of course a factor of 10x from the lower region accumulation.
You guessed it - DISTRIBUTION
I shared a post titled "They Blew up the rocket"
These levels are pre determined, on the @TradingView show with Stefan, I discussed Composite Man and the fact the market is an Algorithm, seeking liquidity.
www.tradingview.com
We then fall down to this area of liquidity which as you can see above, can easily be mapped out in advance.
Now in this zone, you could see a real ugly move up - this give off the hint that the market was testing the water, checking to see what levels are interesting to various participants.
As we rallied away from this zone, it quickly became apparent that the new top level had been programmed.
Zoom in to read the text here.
So, why was it only going to poke above the old all time high? Liquidity...
Then Where? well, down of course. Here you will see we started changing the character and the next obvious move was on the table. Again, pre-programmed in.
I shared in advance the logic here as to why it will grind up and fall through.
These things are not difficult to understand, yet retail traders mostly have the memory of a gold fish. Levels are not set in stone, you don't get a break and it's done. the change of character is trying to tell a story. It's giving the clues.
I've shared every single major move here with you on TradingView.
Now what?
You have a much, much larger accumulation move in the works.
NOT SO FAST!
One slight caveat.
We are early, it's not done yet. Your local influencers, fake guru's and the social media universe all want one thing! BTC to go up. Blackrock's ETF - you think they will come in to make retail traders rich? Go back and read the start of this post again. Retail is the liquidity for us professionals. This phase is a very, very big one. On a 15 minute Timeframe every $100 will look massive.
You really need to learn the logic behind such moves.
Every man and his dogI have seen more and more Wyckoff posts recently, well - here's another one!
I was trading Wyckoff methodology when it wasn't cool. Unfortunately for the masses, it's not as easy as an 'influencer' will have you believe, from seeing their posts - they clearly lack the understanding and are simply joining the 'HYPE' club for view count.
A few years back I went into some depth on Bitcoin's phases as you can see below;
Here you would expect the mark up and straight into a Point and Figure forecasted level, which then became 'Re-accumulation'
As the price moved up, you could see as clear as day a nice AR move; I'll go into that shortly. But this was the sign of professional involvement.
This chart was posted on the 18th of March to highlight the BC (also cover in a second) Why was it so obvious? It was smacking us in the face with the fact it had it's re-accumulation phase earlier - although many said the 60+ thousand level was the accumulation. Point and Figure analysis had the range mapped out and as we neared the zone, the AR come into play.
To understand this, I have drafted the help of my good friend Chat GPT to explain this like we are 10 years old.
Imagine you have a jar filled with your favorite candies, and you really want to collect as many as possible. Here's how the stages of a Wyckoff accumulation schematic can be related to this candy scenario:
Stage 1: Markdown Phase
In this stage, you notice that the candies are on sale and their price has been reduced. This makes you excited because you can buy more candies with the same amount of money. So, you start buying some candies, taking advantage of the lower prices. Other people also notice the sale and start buying candies too. This is like the first stage in Wyckoff accumulation, where prices are falling, and smart investors start buying.
Stage 2: Absorption Phase
In this stage, you and other candy lovers continue buying candies, but you start to notice that even though you're buying a lot, the price doesn't go down as much as it used to. It's like the candies are getting harder to find on sale. This means that there are fewer candies available at the lower price, and more people are buying them. You and others keep buying as many candies as you can, but you start to realize that the sale might be ending soon.
Stage 3: Markup Phase
Now, the sale is over, and the candies are back to their regular price. However, you notice that the candies you bought during the sale are now worth more than what you paid for them. You feel happy because you made a smart decision to buy them when they were cheap. Other people who missed the sale also want to buy candies now, but the price is higher. You may decide to sell some of your candies at a higher price to those who want them. This is like the third stage in Wyckoff accumulation, where prices start to rise, and the smart investors who bought earlier can sell for a profit.
So, to summarize, in the Wyckoff accumulation schematic, we have the markdown phase where prices fall, the absorption phase where prices stabilize, and the markup phase where prices rise. Just like buying candies on sale, smart investors try to buy assets when their prices are low and sell them when prices go up.
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So now you got the basic idea of Wyckoff phases; this is still a very hard thing to spot. It helps if you have a bias and of course background as to where the price has been. When I posted the "Rocket call" in March 21, we had seen the Buyers Climax which can be defined like this; A major panic that occurs at the end of a steep ascent in prices. In its classical form it is typified by large range reversal in prices accompanied by large volume.
However to simplify this further; contrary to popular 'influencer' belief - Large operator don't go chasing 100x returns, their seeking to make money in all environments and often over a much longer time frame than retail would like. So think of a buyers climax like the bigger players have reached a target that they are comfortable with, the level of returns are sufficient. They sell off as retail are buying every little dip on their 15 minute chart.
An AR is an Automatic Reaction to either a buyers or sellers climax (for more, read the post below - Wyckoff basics explained)
Once we dropped to the 4 level marked up in March. The move away was ugly, it was low volume from the get go. Meaning a lack of overall interest (at the time) But under the surface, there was more to it. A lot more to it to be honest!
I covered the Wyckoff Distribution in this educational post;
So, we dropped "exactly as predicted" into a range that was measured only to rise on low, depleting volume. You would then expect a re-accumulation and the measurement for the extension is again mapped out.
Re-read the Chat GPT section above.
You see, Wyckoff can be useful if you know how to use it properly... People often say things like "it's over 100 years old, it can't work in these markets" Or they try and make patterns out of every move, clearly lacking the understanding.
As I explained in August 21 on the way to the current All Time High - the price could be plotted as the image above shows. Volume and COT intel plays a major part here, the sell off was going to be quick to the 40k level - why? Well, it was re-distribution in play.
And just like that January 22 through to May was also mapped out...
Once we got that break down lower, you could assess the Point and Figure regions.
And just like that, we are back into Accumulation. To the MOOOOON!!! ... Not so fast, as this is a much bigger cycle you have to look out for volume, what the bigger players are manipulating and assess the overall situation, being a bigger schematic it is likely to be a slower burner. Refer back to the Chat GPT section above.
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Wyckoff, Elliott and Dow Theory still works today as it's not a study of technical charts to be honest, they understood the depth of psychology, retail sentiment based on an individuals own mindset. I have covered the psychology around this in several posts including the Simpsons one! Here's a quick look at the cycle.
Now, place these retail sentiment analysts together.
You see, things don't have to be complex to work.
Zoom out and if you have read this post well enough, you might spot the next clue as to where exactly we are. If you already know me or follow my posts and educational content, you might spot not only where we are, but why.
Anyways, I hope this helps at least one person out there!
Have a great week!
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
The Bitcoin Age of EnlightenmentOver the last couple of years, I have made a lot of posts public. These range from education through to logic for trade setups. I have gone into depth here on Tradingview to share the knowledge.
The one thing that really sticks out for me is the transition of Bitcoin here and now. Seeing this unfold on a new instrument is a first for me (not old enough to have witnessed the Gold move) How BTC is currently behaving and the whole institutionalisation process has well and truly began.
If you haven't seen many of my educational posts here are a few links;
Starting with Psychology; I really enjoyed writing this post and as many new traders will know all too well. There is an image in here that will hit home. (click the image to view the main post).
The post above has a lot to do with the overall sentiment in the market, sentiment is often the driving factor of major moves. Whilst you could assume technical analysis highlights key areas of say supply or support, Moving Averages or RSI indicators many retail traders love to use. These tools are only aiding the creation of that overall sentiment.
In this post below, I have covered every major Bitcoin move since being able to make my posts public. Each post you can click through and again all of the detail is sat there.
I have assessed the retail sentiment, using various techniques over the years and they all lead back to the same conclusion. Take a look at these;
Some of the calls in the post above have been derived from old techniques such as Dow Theory, Elliott Wave or Wyckoff. I have posted several educational posts here on these techniques.
Everyone is looking for an edge when it comes to trading, it's just sometimes the edge is right in front of your face. It's human nature to want to spot patterns, obtain something others don't have. Unfortunately, many start off on the wrong foot and stay down that path.
I've covered more detail as to the goings on such as Dark pools.
And side topics such as how to use Chat GPT to write pinescript indicators with zero experience:
It's experience, knowledge and more experience that has allowed me to pick out key stages in the markets over the last 20+ years. These levels are all pre programmed, it's a giant algorithm seeking liquidity.
Here's a call that nobody wanted; Using an Elliott bias to identify a Wyckoff structure. The top of the first major 64k Bitcoin had the writing on the wall.
This was as early as March...
Now skip forward, identifying the Top and the Drop zone in March. Maybe a lucky guess? Well, as I said - these things are 100% not random. Once we started to rise the August extension was showing why we would only just peak above old ATH's and come crashing back quickly...
I guess, my point is. This is becoming institutionalised, making it less sporadic.
Key levels are becoming more and more respectful, overall making it easier and easier to read.
I have talked a lot about these things above, had a great chat with Stefan at Tradingview on their own show; Watch that here. www.tradingview.com
Anyways, enjoy the rest of the week! See you on the next stream!!
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
The other side of the tradeTrading has this stigma attached to it, everyone thinks they can come and make their millions. The reality is, 90% of new traders lose 90% of their funds in 90 days.
I've talked for years about the negative side of trading (trust me, I've done this over 20 years) Trading is often perceived as a wonderful, fabulous lifestyle. Cars, yachts, jets and women! Probably fueled by films like the Wolf of Wall Street. But not many people like admitting to the other side of the traders lifestyle. Of course, it's nowhere near as glamorous - it sure as hell won't get social media likes or follows. But it's there and it's real!
There are a couple of main points that I want to touch on, especially for you newer traders coming to find your fortunes.
1) Trading can be boring! Yes, boring as shait. If you are used to having a 9-5, you do not realise the effects (good and bad) on having human interaction throughout the day. You might have a partner you live with, the family. But what about when they go to work or school? You are left with your own thoughts. Yes, this can be dangerous!!!
The issues can include lack of motivation, uncertainty in what to do, overthinking. On your bad days, you have nobody to comfort you and on your good days, you have nobody to share the excitement with! Joining communities can be a good fix here, providing you find a good one. This doesn't have to effect your trading, your strategy or anything else - but interaction could save you from the loneliness.
The solitary nature of trading can sometimes lead to feelings of isolation and loneliness. Without the support and camaraderie of others in a similar field, it can be challenging to share experiences, discuss strategies, or seek advice. Additionally, the pressure and stress of making high-stakes financial decisions can further contribute to a sense of isolation.
2) STRESS - Stress is a huge factor for a trader. Stress could also stem from the loneliness, stress when dealing with finance is an area where a lot of people suffer, traders and non traders alike. The issue is for traders, stress is often self inflicted.
Most new traders come to the market with a view of it's easy, fast paced, exciting and therefore have the perception of making it big.
If it was this easy, people wouldn't spend 7 years becoming doctors or lawyers. Instead they would follow the money! Come on, who wouldn't - Yachts n all.
It's this popular belief that usually drives traders into the stressful state which becomes the norm until they give up!
To counter the loneliness and try to make it big, traders (probably you) I know I did! look at indicators, try to take on as much info as possible! Which takes you down this path.
Indicators. there must be a holy grail, a silver bullet? 100% winning strategy? People waste so much time on retail indicators thinking they will be the one to find the edge. You would be better off having a trip to Vegas and playing the first slot machine you spot!
The next issue is - too much data or the attempt to obtain too much of it! I remember when my setup matched this below (if not more screens)
This is like trying to read 9 books at the same time whilst writing essays in 6 different languages. All of these factors will 100% add to your stress.
You might have anxiety when executing a trade, or feel the burden of stress whilst in a trade. Scared to see the numbers go red and too eager when they go green?! Yup been there, done that. So has every trader out there.
Stop feeling like this.
Creation of a strategy...
All you need to help combat these types of stresses, is find an edge. The edge could be very simple - from reading books, stepping away from the charts, viewing higher time frames, moving away from social media influencers. All the way through to mastering one instrument.
When you see indicators like the image above, what happens if two are in one direction and the rest in another? You start to argue with yourself, you miss good trades and you end up taking bad ones. This leads to stress and then you realise, yup your lonely!
What a cycle to be trapped in!
Now how about you flip the thinking here? Less charts to stare at, less indicators to confuse, more time to read, exercise or simply go play golf. Your edge does not need to be technical, fancy or shown on 48 screens.
I talked about this in the Tradingview live show the other evening.
Here's the link: www.tradingview.com
Sometimes less is more and this can combat the stress and golf is always a winner for loneliness.
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
The whole Economy & not just BitcoinPeople want to know about Bitcoin, but do not know how other factors effect the moves in the market.
Take a zoom out and look at this...
What usually happens when you have a ascending move up? it's moving up with a hesitation, lack of conviction.
This isn't any old chart, it's the monthly view of SPY.
Back in November last year I shared a DXY chart (Dollar Index) That highlighted this key level here...
Why this level is key, is what we teach - but the fact it respects it is more the secret sauce. You see, DXY is often overlooked as an indicator - yet you buy coffee beans, oil, gold, cotton, even Bitcoin using the Dollar.
Where is price sat? Well, you guessed it at a key level.
Now let's use another useful indicator; COT intelligence.
Managed money is on the shift.... hmmmm.... hint, hint if ever there was a hint.
We also seeing some shorter term strength in the Dollar, just behind the Yen.
This is very small term in the grand scheme of things, but you have to note these if your wanting to trade your 15 minute charts.
Why I said this is the whole economy, it's due to the sheer amount of uncertainty and speculation at the moment of a recession inbound. So let's look a little closer to Gold.
Take note of both the peaks and the stochastic situation. Strength in the Dollar will weaken this.
If you didn't spot it...
How's about a quick look at Bitcoin?
If you follow me already you know, it's done nothing unexpected over the last 2 years or more, if you don't follow me - I have been in BTC for a long time, Tech VC and a trader of over 22 years now. This combo has given an interesting perspective of this market as it's shifted from a play thing to a professional instrument.
This above is a post (click on it) of the major moves I posted for each swing and the logic for why it will do it's next dance.
Your resident "influencer" might have been calling for HKEX:135 ,000 over 18months ago, moon shots on every $100 rally? But the truth is, Bitcoin is in a transition period making it more of a professional tool, this will and has already had some impact on the analysis.
Take a look at this monthly candle.
Again, not the stochastic and the time left on this candle.
Look a little closer at the weekly.
With the stochastic situation you would expect a little move up.
This is exactly what you can expect on the daily.
Now this isn't a run on 100k or even $1million from here. It's more like a simple Wick fill.
I've spoken about these moves for several months and the fact that we are indeed accumulating, no doubt on that. COT Asset Managers say as much.
However, it's not as simple as up, up n away.
Leveraged funds are playing the game.
So to summarise - if you see some strength on DXY, what would this do for SPX, Gold, Bitcoin?
And yes those extensions are pretty spot on level wise too. Respect the algo.
Simple logic.
Anyways, have a great weekend! Stay safe!
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Up to DownThis is a quick idea to test something else.
Purely based on the indicator, I would like to see a dart up to red line and down to target box.
100% not investment advice. It's just something I want to watch.
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Chat GPT indicator research I recently shared a video post about using "Chat GPT" to create custom pinescript indicators.
In the video, I just showed the potential for starting your journey off! Here's an updated view of the very indicator I had Chat GPT build in the video.
This got me thinking as to the possibilities, so I made a start on a new indicator. One for looking at "footprint trading" a technique I used to use a lot earlier in my career, in essence it's all to do with volume profiles.
Starting off I looked at ways to find key value areas using a type of periodic view of volume and then wanted to test momentum at these levels. I asked chat GPT for a couple of different variations and got a little stuck on the complexity. (not being a coder n all) So I asked for a little help from a friend @peterhammer, who I now call Chat GPT 5.0.
He added and tweaked, enhanced the overall idea.
So starting with periodic profile.
This helps spot local key areas as highlighted here...
As we move into a range - we can see the volume momentum clearly highlighted here.
This has been a fun first project with the aid of Chat GPT for sure!
More to follow!!!
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
The phases of Bitcoin As @Paul_Varcoe posted in his recent post. Keep a cool head here, moon calls are back trending.
Take a look at these posts, since we started making posts public. If you want proof then look no further...
I had been buying Bitcoin for several years, as a money manager & tech investor. Seeing the move at the end of 2017, it was clear the transition had started.
I started posting about Bitcoin publicly and explained these steps.
Why this was a great range for the re-accumulation. This also giving levels for the potential upside move. Which we then had in the exact forecasted region.
So when the target was set -
You see, this was really the start of Crypto's professional shift, it was becoming a trading instrument. Thus making it easier to analyze each swing.
This was a private stream here on @TradingView explaining the bottom collection of liquidity as a pig ugly move.
As the price started to rally, many got excited - maybe a little too excited!
The reason I say this, is that there was already signs of a truncation of the move back up.
This is simply part of the game. Zoom in on the text, this was the 24th of August, expecting a drop down 3-4 and then a rise into the old ATH levels before crashing quickly.
At the top - it was again, written in the stars; why would it be Linear to $135,000 You know who I'm pointing the finger at. Think about it, we had a weak rally up on very little volume, how, just how was it likely to rally to 135k without any form of liquidity grab?
Then as we had our move down and rise back up, there was a defined pattern showing - the kind of pattern that indicates a re-distribution.
I took the time to warn the public about this but in reply guess what the main theme was? "Buy the dip" unfortunately.
The phases of the Wall Street cheat sheet are now beyond apparent.
Rise to fall
So as we come into "fair market value" regions - it's pretty clear we are where we think we are.
Yup - It's not rocket science this. I cover some additional info in this post below
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Bitcoin Wyckoff situation exploredMany people out there like to talk and share "Wyckoff" Information, unfortunately it's not as simple as people make out. Back in 2021 When I called an obvious distribution, it took a couple of months for many of the influencers to catch up. In the March, leading up to the first major all time high 64k levels. The market sentiment was "Re-accumulation"
So why was this not Re-accumulation?
Well, we had already had the re-accumulation; as I highlighted in January 2021.
Why is this far back important?
The trend is your friend as they say. Knowing the bias is key. Using these techniques you can measure the moves in several ways to get forecasted projections into the future. Look back at the lows after the 64k High.
Yes 28k levels targeted as early as March.
I shared some education on this topic prior to the drop.
And again on the way up - the signs to the current ATH were also written in the stars (well it was clear the logic as to why it would truncate).
Just read the comments inside that image.
Knowing where and why as a general bias, makes trading Bitcoin pretty nice.
The chart in the main image is another Wyckoff related technique, less discussed - but very, very effective. This is known as Point and Figure or (P&F) you can actually change the settings of the type of candles here on @TradingView
As you can see target levels were calculated from the last re-distribution and look at where we have the current price action...
Once you get a good handle on Wyckoff, it can be very advantageous on any instrument.
Stay safe and enjoy this crypto market!
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
