Quantitative easing - inflation of the economyMany people simply do not understand economics; and why should they - it's Foooooking complex.
I hear and read, all the time. Bitcoin solves inflation - without any real sound logic as to why or how...
When you travel back in time, the monetary systems have changed and evolved but are moving further and further away from the "gold" standard. Now as a crypto maxi, you might see this as a good thing. However, it also has it's drawdowns. The reason Gold and silver has been used for thousands of years is that it cannot be made and holds a rare earth material (Value) this is not as simple as saying "a store of value" and this I feel is where the confusion comes in.
So let's explain how the governments use quantitative easing to cheat the public.
In simple terms this is a policy in which the central bank's try to increase the liquidity in its financial system, in order to inject money into the economy to expand economic activity. Or so we are told.
If you look at this chart going back to 1965.
You will see the QE levels of rapid supply of money - with nothing under pinning it. This is where the Gold standard is lost. However, the story does not end there for Gold & Silver.
Take a look at this;
This is the Qualitative economic impact of the quantitative easing. This shows, the asset price increases and then falls off a cliff. All whilst the Money (paper money) flattens out. So with the injection into the economy (wink wink) the demand increases, the price increases and with a slight of hand - we have more borrowed dollars, less tangible assets to support it.
This isn't just a US problem, nor a European issue - it's a global, corrupt government issue. This is why the rich get richer and the poor get poorer.
Take a look at countries such as Australia;
These curves are parabolic.
How's about Russia - could get even worse after this war;
In summary it can help an economy out of recession, but it can drive an economy to recessions also.
So why or how does Gold and Silver fit in? Well, as the value of money (cash) drops down, spending power is robbed, pensions depleted and costs sky rocket. The Dollars in circulation can buy less "store of value assets" - thus driving the price of said assets up. This is where many people get confused with the adoption of Bitcoin. They assume that with Bitcoin being decentralised (kinda) - you have to remember the rules and regulations imposed on money in and out of the system (KYC & AML) - on an immutable ledger; this is optimal for taxation, identification and traceability by the way. The main issue is the store of value is only driven by what's in circulation, how much demand and how accessible the supply. It is already stated that 91% of all of the BTC in existence is in the hands of the Elite. The value per coin is only the supply vs demand battle, it's similarities to gold means it can be lost, stolen or stored.
But it's the underpinning method the governments use to increase the value of gold - that makes it likely to remain "THE WAY" for the foreseeable future. If I am honest I see Bitcoin or another crypto taking over the cash/payment system - more than I see it as a digital gold.
Anyways - have a great weekend, I thought this would be an interesting topic for discussion.
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.
Mayfairmethod
Do you know how to use trendline breaksNot often do you get an opportunity to show a real world example of a text book move - live.
Here's a simple educational post showing the two major types of breaks of the trend.
This is the current price level as of the 24th of Jan 2022.
You can see this as a corrective break - the main reason for this, is that the chart is only the 1 hour, whereas if you zoom out to the 4 hour you will see this move about to happen on the chart.
If you go back only a couple of days - you will spot this on the chart.
Here you can look at the Stochastic indicator and see what it's showing during the move up the trendline. How you can anticipate the break and even have a pretty good idea as to it being either corrective or impulsive ahead of time.
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If you are unsure of how to apply trendline or where they should go; take a look at this post below; click the image for the post.
Last year I managed to catch a live example of another text book move; this was the move down (distribution) on the Bitcoin move from 64k. Using slightly more advanced techniques. But it's similar core concepts at work. If you haven't seen the Wyckoff distribution post, again here's the link.
And Finally - the biggest dose of education you will find on @tradingview_
I hope this is useful to you, if you are trading crypto right now.
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.
Bitcoin over simplifiedIn the post going back to February last year, I talked about the "VALUE AREA"
This level was the start of the Wyckoff movement for me, where the distribution would start to fall into place. You will see the value area highlighted in the main post with an orange horizontal line.
Press play on this and you will see much like a magnet, price comes back and stays around this level for a considerable amount of time. Starting around mid May.
There was a key hidden level inside this range, that made it very attractive, in addition it give some clue towards the instrument now being institutionalised.
I've covered this in several streams and posts - much like this image below;
The Wyckoff distribution (click below) for the educational post;
Came with very little surprise, it was clearly exhausted, we had seen the re-accumulation phase - making it the optimal target for a 3 wave weekly around the 62k level (first long time ATH in the EW roadmap)
I am often asked about where next, for me personally. Not much has changed over this last year - the only real surprise was that we didn't get 75k-83k as a key level during the wave 5 up on the weekly. Seeing only $69,000 instead.
There are a couple of key levels in which myself and @Paul_Varcoe will be covering in our upcoming streams. But for now, it's fascinating seeing the price being pulled towards the value area range that's been sitting there this last year.
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.
What you may not realize...Over the last couple of months, I have posted several educational articles. This one is to show how some of the tools widely used in trading can actually fit together.
I wrote a post a while ago about Dow Theory and how it fits into most modern technical analysis.
Click on each link to get the in depth content from the posts
When looking at a trend, cycle or major market move. The best place to start is from the biggest time frame available. This giving an overall bias for the overall trend, some people will refer to this as the monthly, super cycle, major trend. It basically means as large as you want. This can be based on your trading style, no point trying to obtain a bias on a minute chart.
For me I like the bias based on monthly Elliott wave moves;
Again click the image for the full post, at the bottom of this post in related ideas there is also basic level 2 Elliott.
Once you have the bias we can work out exactly where we are, like one of those street maps in a city.
We can use Fibonacci levels to drill down into potential areas of interest and targets for both the extensions and retracements.
Here is another article posted recently as an intro to Fibonacci;
Once you can identify potential areas of interest, you can drill down again into more advanced techniques such as Wyckoff.
In Wyckoff terms - I wrote a couple of articles and recorded several streams on the logic for the BTC call at the top in the middle of February, before the "Rocket post in March" all based on the info mentioned above here.
In this post, I covered the basics of Wyckoff and it's simple logic
Before going into the types of schematics here below;
The Wyckoff schematics is a little more advanced than the other techniques here, but when you know where you are in the cycle, they become a lot easier to identify.
In the "related ideas" section I covered a chronology of education, covering other topics like buying the dips, MACD, Trendlines and Moving Averages.
I hope this post gets you thinking about how it all fits and works together.
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.
