How or why did you start trading?I've spent nearly 10 years on Tradingview.
But after doing this since the age of 15; it's been interesting and fun (don't worry, this is not me retiring) I just wanted to share some of the key points, the ups and the downs, the challenges and the rewards.
For those of you who don't follow or know me, my trading started after a school trip from Wales (in the UK) to New York's Wall Street. We went to learn about the Wall Street crash and visited the exchange. Needless to say I was hooked!
My early years of trading, I would take the pushbike to the bank and trade stocks from the Times newspaper, it was always over the phone via the bank broker, I had to do this via my mother as I wasn't old enough for a stock account through my bank.
These were large cap stocks, things like Vodaphone, Cadbury's and ones most people could identify with. These were never big trades just the experience I guess. How I funded this was, I dropped out of school not long after that trip to New York, no qualifications, just the idea of being a trader and taking over my father's engineering company.
I would work as an engineer, still live with my parents, and buy stocks.
It wasn't until a few years later I got into penny stocks. I guess for me - seeing the Wolf of Wall Street movie, it was a bit like that: you would buy stocks for fractions of a penny and watch them pump. Some traded better than others but still had very little knowledge; trading wasn't as accessible as it is today.
I guess looking back this was very similar to what I see in crypto today, especially with alt coins.
about 5 years into the journey, I ended up getting into Forex where I guess I have stayed ever since. This was fast-paced compared to stocks and the markets being open 24 hours a day 5 days a week. I would take long term trades such as the difference between the interest rate of the New Zealand Dollar vs the Great British Pound for example. It just felt like free money. (those were the days).
From there I also started trading Gold, Oil & SPX.
Running in parallel, I ended up in the tech space; investing in cyber security around financial markets. I keep little souvenirs of the journey like this card from buying my first Ferrari. It reminds me of why it was interesting in the first place!
I think you need this as a trader, I have written several articles here on Tradingview about the psychology and loneliness of being a trader. Two of my favourites are the Simpsons one and the other side of the trade. Doing things you wouldn't usually do is part of creating your inner trader.
I was fortunate enough to get into Bitcoin early doors, right place, right time as they say.
From 2012 onwards been educating, mentoring and advising people and what a journey that's been. I have met some great people along the way. This brings me back to the upside, downside and, of course, the psychology and emotions of trading.
Trading can be a very lonely place to be if you have nobody to share the wins with in real-time; it's hard when you manage losses and keep them to yourself. Of course it's very, very rewarding when all is going to plan!
I can't emphasise the importance of a community, it's actually one of the reasons for posting this post.
With access to charts and brokers directly on your phone, it's an incredible change from the time I first started. But it can also bring a lot of hidden dangers, it's a unique type of lifestyle. I understand not everyone trades for a living, it's a hobby or a way to earn some extra money. But the ups and downs of this can have a strain on mental health.
Fear and greed is a real thing, not just a sentiment indicator. We are human after all. It's so easy to fall into a false sense of security after a couple of nice wins. But it's even easier to go off the rails after a handful of losses.
Some really cool factors for me when it comes to trading, would have to include doing one of the Tradingview shows with Stefan back last year
www.tradingview.com and discussed the fact that a notebook I had made for my 11 year son had been published as a book. Never thought I would become an author after dropping out of school.
Part of the reason I stream here and write educational posts is I love to keep the trading game live and current. Watching Bitcoin unfold and become institutional has been such a pleasure and amazing to watch it transition. It's been a great way to interact with people from all around the world.
I guess the point is, the power of the internet and a platform like Tradingview; allows us to share such stories with the world.
What I have learnt, is that new traders come to the market with a certain expectation. Often, people assume they need more indicators, more screens, more news and more instruments.
What you realise over time, is you can make a living from a handful of instruments and a little bit of logic.
I'll kick it off by saying what I don't like about trading is how lonely and isolated it can be. What I do like about it is the freedom it brings.
I would love to hear your story, why you started trading, what you like or don't like about it and anything you feel like sharing!
Anyways; I just wanted to share this little post and get some discussions going. Have a great weekend and I'll 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.
Mayfairmoney
Bitcoin REALISM I am definitely not going to win any popularity competitions with my comments and thoughts. But that's not the point when it comes to making money.
The main issue for me still in Crypto Land is the lack of realism. The image on the front cover was from a google search of "realism" I guess the confused face made my day. This is exactly how you need to be looking when you read these points below.
I have explained the logic of every major move over the last couple of years and this guys - is no different.
So let's start by exploring the reality of market cap for one. When you buy a stock you have a number of stocks in circulation times that by the price and you can get a market cap. Of course, unlike most companies on the exchange Bitcoin CANNOT just issue new stock. We have to remember some Bitcoin are gone and lost forever so this number will likely end up around 20million and not the full 21m.
The current Market cap is roughly 19,806,000 x $42,897.
Let's call it a little over 820 Billion.
At the ATH of $69,000 we saw $1.302 Trillion.
Lets look at what is needed and an angle of attack if Bitcoin was to hit $500k by Jan 25, 26, 27, 28 or 2029.
This is only one aspect of the story.
Prior to the ETF launch people were saying silly things like "Trillions coming in, $100k imminent"
Blackrock's largest ETF is roughly $354 Billion. This is the SP500 fund founded back in 2001. So 23 years old roughly now.
Here's the actual chart.
What does this mean?
Well, let's say Blackrock decided to close their biggest ETF and throw it all into Bitcoin. That level would still not take us back to the current ATH.
Bullish, Bullish, Bullish - we are still $25,000+ under the current ATH.
So what about other ETF's? Obviously the market is bigger than just Blackrock. Let's look at this aspect too.
Look at the end of 2021 as the ETF market collectively was at it's high. We are talking about $10Trillion in 8,552 ETF's.
I've posted several times about the current COT landscape.
Clearly social media Bitcoin is buzzing and everyone is about to become rich, it's different this time and so on. Well, COT says otherwise.
Back at the top when everyone was calling for $135,000 I said the reason for the drop would be liquidity.
So why is this different?
I said there were two likely scenario's on the table as we moved down. The first was we were in an early stage accumulation, we needed to go up to 32k and back down to the low 20's. This would allow us to travel much higher and sustain such a large move.
The second option was bearish.
Well, I guess the second move played out.
The momentum is still clearly not with us - we are still FWB:25K + under the current ATH - not what one would or should expect after 12 Bitcoin specific ETF's obtaining approval & launching.
Look at the momentum
People seem to fall into the echo chamber and all logic leaves the building. I have been at this game a long, long time. Seen it all before and I am sure I will see it again.
This does not mean I am Bearish or anti Bitcoin - not for one second. I am one of the lucky ones in at the right time, sold a lot on the way up and happy with the current holdings.
All I am trying to emphasis here - is don't get sucked into the void which is not supported by ANY sound logic.
I recently watched a couple of video's with Warren Buffet, another with Jim Rickards.
They both explained something very interesting in a very clear way. Although Anti Bitcoin - what they said made a lot of sense. The same lesson kinda applies to things like gold.
When you buy an asset, the asset can produce for you. So assume you buy a house - you get rental income each month and with the price of the property going up over time you make gains there. Buy a business same thing - Buffet explained this using a farm as the example. Sell grains, cows or whatever you farm. Over time you still hold the asset.
This isn't true for the likes of diamonds, gold or Bitcoin.
Hence it fits into the greater fool theory.
If I sell you my last bitcoin I picked up for less than $200.
You buy it all today at $42,850. You have to find someone else willing to pay you more than the $42,850 in the future. For me, this is the main reason I don't personally care up or down or sideways here. But many in the echo chamber do.
The average price across the breakeven addresses are around $37k - this is Breakeven not profit. So imagine majority of the retail crowd with an average entry after DCA'in at $37k.
These are all things to keep in mind when your playing shorter term moves. ETF's are structured in such a way long term growth can be expected, volatility get's somewhat reduced. You noticed what's happened on the weekends since the launch?
So whilst I expect it to go up in the long run. We need a healthy pullback as to be expected. This gives more time for real accumulation to happen - but this will also put some stress on that average (BE) level of $37k.
Just keep this in mind and one more thing if you want to comment on "oh your wrong - up only" give some logic to support it or I won't bother responding. This move will take time. For me, nothing has changed since 2022. We are not ready for new highs - YET...
Anyway enjoyed or not I thought it was worth another educational post.
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.
Market Algo or pain tradesI was reading another trading book today and much like watching the dumb money movie the other day, it prompted me to write another post.
So, you may have heard the expression "the market is an Algorithm" whilst this is somewhat true, it's actually more a sequence, Ralph Elliott, Richard Wyckoff and Edward Jones knew this.
In simple terms, the larger operators or what's known as sophisticated money - chase liquidity pools that are often areas Dumb Money have taken entries or placed stops. Now if it was as simple as this, you could simply write an indicator or be on the winning side 100% of the time. Unfortunately, there's a lot more to it!
When I say the smart kids are taking the dinner money of the dumb kids, you need to appreciate the fact that winning whilst playing against retail traders is like putting the Patriots against your local under 12's side. Or like having the New Zealand All Blacks play against an old people's home in Pakistan. (I am not sure if Pakistan even have a 1st team in rugby).
To gain some understanding, you need to appreciate there's such a thing as "pain trading".
A "pain trade" refers to a situation in financial markets where a significant number of investors or traders find themselves on the wrong side of the market, leading to losses or discomfort. In other words, it describes a scenario in which the market moves in a way that causes the most amount of pain or financial losses to the largest number of participants.
For example, if a majority of traders are positioned for a market to go up, a pain trade would be a sharp and unexpected decline in prices, catching those traders off guard and causing them losses. The term reflects the idea that markets often move in ways that inflict the most damage on the greatest number of participants.
Understanding pain trades is important for investors and traders, as it highlights the potential risks of crowded trades and the importance of risk management strategies to mitigate unexpected market movements. Investors and traders often use various indicators, market sentiment analysis, and risk management techniques to try to avoid being caught on the wrong side of a pain trade.
(Thanks ChatGPT for the summary).
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So take a company like Carvana for example...
This type of move happens over and over again - creating cycles (But not always the same).
In this image above you can see it's likely to have swept long stop losses and then rallied hard.
You probably know about the Gamestop Saga.
I wrote a post on that film recently.
I talked about being on the wrong side - I can't get over how someone could be up $500,000 and still go broke? But it's all in the mindset. Liquidity is the name of the game.
How do these things fit together?
Well, Bitcoin is a prime example - retail mindset is "HODL, Buy the Dip, Diamond hands & Lambo" - whilst as a professional trader, it's enjoying your profits and buying/selling at the expense of the dumb money. These moves are shown as the last post, buy momentum.
Here is the summary image from that post.
Since we had a move up - retail seem to think it's up only, they seem to put all the eggs in the hope Blackrock and a halving will make them rich...
I have read articles like this recently.
After watching the Dumb Money film - you know where following the crowd goes.
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Why is this an important lesson?
It's all to do with pain, where is the maximum pain? Retail sentiment would suggest pain comes in the form of little movement, grinding prices in up moves and fast aggressive drops.
Some context from Blackrock themselves: What is Blackrocks Biggest ETF?
So again, let's add a little logic. Where is liquidity sitting?
If and it's a big if - Blackrock get an ETF approved and it's half the size of their biggest ETF to date, let's then assume Retail flood in and match it dollar for dollar. That market cap would still put us roughly at the current ATH, given coins in circulation.
This again just amplifies, why we are simply - NOT READY, YET!!!
The move I didn't want in 2022, looks to be the biggest liquidity grab we are likely to see in the Bitcoin chart.
We are very, very likely still in an A-B move up for the slow pain of coming back to build sustainable momentum.
Have a Happy New Year all!
Stay safe and see you in 2024!
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.
It's a numbers gameI see this more and more, especially in the crypto space. There are some wild stories out there from turning $8k to a billion through to a Pizza for 10,000 Bitcoin.
Here are some home truths. Although most of you won't want to hear this.
You see, as a professional trader - there is 1 key factor, almost a scale balancing between too much and just enough. Everyone pushes for more returns, we are only human after all. We have had stories of Wall Street Titans and Vegas big wins, but there is some simple logic to this.
You might have entered the market after Covid hit the world and wanted an extra income, might have seen a way to make millions from the money the government sent you? The issue is this is no different that rolling a dice in Vegas but without the fun! You possibly saw some influencer selling you the dream - they fail to tell you, they trade on demo accounts and make their income from affiliate links and social media watch time!
When you think of investors like Warren Buffet, you have to understand - he didn't watch an influencer video and say to himself "I want to be like that guy" - investing is often a long term thing and not a get rich quick scheme.
Here's a few examples to hit home.
This is boring, not worth it - so instead you seek higher returns, that opens up the possibility of falling into scams, listening to the wrong crowd and having dreams. To be honest, it's probably more enjoyable spending a day at the races.
With a smaller account, you can grow it a little, add to it on the next pay day and of course compound the investments.
As you move up the scale.
This is probably where most "semi serious" market goers start. It's often a flurry into the market cash in hand. The assumption often the same; you have done well to amass a lumpy investment, your clearly good at the field you have been in to earn your pot. Why wouldn't you be a good trader? After all, these kid influencers are making millions on their demo accounts.
Jump to the next level...
Your either a captain of industry, you have had your own business or you have a kind daddy.
How you got here is not important, staying here is.
When you trade with a medium sized account you start to think a little different. Instead of looking for 900x returns, you start thinking about investments that are a little less risky. This is the scales I mentioned earlier. You are now in the space of a good return might be good enough. Too high of a risk, means you are thinking of safe guarding your cash.
Here's where the Professionals play the game differently. Trying to make 1-5% is a lot more sustainable than trying to land a 900x return.
You have to remember 90% of traders lose 90% of their accounts in 90 days...
This can easily be attributed to things like;
Buying signals
Following influencers
Over trading
Trading too small a timeframe
Trying to find a silver bullet
As a professional - you can seek smaller returns, spend less time in front of the charts and let your money work for you, instead of you doing all the chasing!
As the amount of capital rises, so does your desire for risk. You might still have the appetite for returns but not at the cost of risk.
As a professional trader, you can afford the luxury of trading a bias and scaling into a trade - you will find fund managers who have what's known as secondary investment capital (in essence to add to winning positions).
So although this is not going to be what you want to hear, it's what you need to know.
There's always chasing the dream, but why not wake up and make it a reality?
Enjoy the weekend all!
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 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.
Tradingview Volume toolsI've been using Tradingview for just over 8 years now. When I initially started using it I was transitioning from using Footprint tools. I would use techniques that in essence allowed you to see inside a candle. Coupled with techniques such as "DOM" Depth of Market and Cumulative Delta. After a while you get to see some of this stuff without the need of indicators.
Tradingview have steadily added various tools to the platform and with a little help from being able to code your own tools it's made it an interesting space to play.
So here's a quick overview on the abilities, encase you have yet to explore. This is not a lesson on volume as such, just educating you as to what the possibilities can be.
Most would have seen or at least know about the volume on the X axis.
This simply gives an idea of the happening of that particular candle, of course things can alter or yield different results based on settings and time frames.
we've taken the time to incorporate this simple volume in one of our own indicators. Which is coupled with a Stochastic and a few other bits.
It can also be used standalone for spotting divergence for example. You can see how the volume up and price up yet in the third price move up, volume has lowered.
There are also various styles of showing this volume data - one such tool is Weiss waves.
These are great in conjunction with techniques such as Elliott Waves and Wyckoff. I've shown this over the last two years here on TradingView and both of these techniques have been very useful on Bitcoin during this time.
I mentioned CVD the cumulative Volume Delta, here you can see this under the Weiss Wave indicator. Like I said, have a play around with these on your own charts. You will spot some interesting things once you get to know them. Try various instruments as well as timeframes.
More recently I posted a video on using Chat GPT to build a pinescript indicator. Here's the link to that post.
Well, I've taken that a few steps further.
What started as an idea in terms of using Footprint, X axis volume and then what's called periodic volume profile. I personally like to turn the bars/candles off when I got this on.
Here's another view - this is the session volume profile and periodic volume combined without the candles being visible.
This new indicator extracts various pieces of data and paints key levels based on my old trading style. As you can see today, this is showing like a magnet where the key levels in Bitcoin are likely to be. There's a bit more to it than that but in essence, its what I am showing here.
To finish with you have two other tools here on Tradingview - one which is fixed range volume, just as it says on the tin. You can see volume inside a range you determine.
I have used a low and a high here to find the PoC - Point of Control.
Then finally, you have visible range; this I tend to use less personally, but I know many people like it. This allows you to view the volume profile based on what you have visible on the chart. As you can imagine, as you zoom in n out, it can change.
Like I said, this is not a lesson on each tool - it's an intro to, for you to spend the time to play around with these tools. Feel free to ask questions below.
Enjoy the rest of the 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 progressive cycleBitcoin is building. it's clear to see the tops and the halving events as shown in the log scale chart.
When coupled with a logarithmic indicator, the price action is currently sat on the bottom.
With banks closing and the FED's continues emphasis on money printing FIAT money - it's now only a matter of time!
To further re-enforce these beliefs the alignment with each 200 day moving average is pointing up, see the exponential, the simple and even the weighted are all in favour of a HUGE Bull run.
Taking the time to assess the the price swings, even a worse case scenario could see us reaching a $250,000 range.
I would like to extend the curve out and adjust for Inflation beating performance, due to the FED's incompetence and re-evaluate the growth potential for the crypto market.
With zero deviation S2F model is also aiming somewhere north of $200,000 - adding confluence to these levels.
Disclaimer
This post does not constitute as financial advice, actually it's quite the opposite! it is 100% not for educational purpose other than to show how crazy some of these calls are!!! our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex - he understands how the market works and how moon clowns influence newer traders with silly expectations like this with no logic backing it up. This whole post is satire for just for an experiment. Trading carries risk, majority of traders lose money, keep this in mind whilst reading the post and 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.
Bitcoin, crypto patternWell,
Here's an obvious pattern. Follow your influencer and get burned in the process. Don't forget to pick up your red bags on the way out and fill their affiliate link.
Common theme?
How about this?
I tried on multiple occasions to warn people.
There is post after post, after post here on @TradingView (all immutable)
Just click this link
Enjoy your weekend!
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.
XRP - UpdateHappy New Year to all!
Not updated publicly XRP for some time, here are a few notes on this pair.
Back in the middle of last year, we saw a nice move down to create its first MP move.
This followed by the value area being used multiple times before a move back up to the MP centre above.
Although XRP has it's own playbook, with the lack of liquidity currently seen across crypto - it's closer correlated to Bitcoin's price sentiment than usual.
Keep an eye on indication from Bitcoin's data for any signs of a potential push.
XRP has enjoyed a dominance place over the strength of both Ethereum and Bitcoin of late, will it kiss and pull up or dip below? Well, this is where the SoS's will be key in figuring out it's next move away from liquidity.
We saw the first test back into the lower liquidity zone, in the early hours of this morning.
But as I mentioned above, the market will likely be driven by nothing more than Bitcoin's move up. Until we get signs from COT - more hand sitting. The market itself, highlighted with the red box on the indicator. Still clearly negative.
Stay safe & again, wishing you a Happy New 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.
A Christmas Tale.This year has been a funny one, well actually over the last couple of years we have seen an escalation into what looks like a global recession on the horizon. Brexit, Covid, Ukraine, Trump vs Biden, Boris out, Liz out. Inflation - whatever next?!
I found a couple of cartoons and thought I would put them in a little gallery here. Non are my opinion, but found them relevant to post.
In this day and age;
China might even have a "No Santa policy this year"
And out in the US;
The rest of the world
It's been a strange few months to say the least...
Some countries are driving a message
Whilst some don't have a clue
Incompetent
And finally in the world that is CRYPTO
Have a wonderful holiday season - Happy New Year and all that.
Stay safe traders!
(As above, opinions or cartoons are not my own. I was just sharing in one post).
Average Joe - Bitcoin anyone? I recently published a post about the "Wall Street cheat sheet"
You can see this play out even over the smaller TF's per Elliott wave cycle. It's all to do with the market sentiment and traders psychology.
Us humans, try and find patterns in everything. Whales in the clouds, levels on the charts, even faces in coffee. What you have to appreciate is why these emerge, there's no voodoo or mythical reasoning behind such things. It's often just humans trying to make sense of something the brain fails to understand. I have put together several posts over the last 18 months, some to do with calls up and down, back up again and then down. But that's not the point, the real value is for traders to come to these conclusions on their own.
Many of my educational posts can be found throughout my profile here on Tradingview.
Some of relevance -
The Simpsons one, was all about this Wall Street cheat sheet and digging a little deeper into the emotions.
I also talked about why the masses have come to crypto;
When you start to piece this together, you will quickly realise - that the larger operators in the market, simply understand the psychology which is driven by retail sentiment.
This particular post was all about why I was calling the rocket call - whilst the majority wanted it to be re-accumulation, there was some obvious signs showing distribution had began. Ask yourself this, when the big boys sell - who are they selling to? Well retail mostly, when the big boys buy - again, who do they buy from? well retail mostly.
These patterns are nothing but humans being human. They won't change much, even being over 100 years old. Humans haven't changed much in 100 years.
You can see these cycles play out, every step of the way - you can and some will say in the comments "your wrong, we are at this stage or another" Your missing the point, I am not trying to pick bottoms or tops with this post; I'm merely educating the masses as to why these things exist.
Take a look at the rally up in Bitcoin's early life;
This was the tech kids, the true believers and not until prices hit over 1k did you see many VC's or larger scale "tech investors" join the ride. (NOT TRADERS or TRADING INSTITUTES) not at this stage, the drop down is where the big boys played accumulation to perfection.
This came just after, every man and his dog had heard about Bitcoin from the postman or in the local pub-bar.
Of course as it happened - jumped in at the local top, got angry and annoyed. Sold off what was left to - you guessed it, the big boys accumulating!
As the rally played out, retail seem to always want "NO RISK" so they end up buying when the price is rising. Now it was more widespread, all over social media! We saw influencers call 130K, $250k, a MILLION dollars and even 3 Million dollars! buying it above 45k made sense to many who either did not understand or unwilling to learn.
Many went for it, leaving the bags red for an extended period of time. To make it worse, the larger operators can afford to sit and wait, wait and wait some more. Retail will leave due to fear, take losses as every day they switch on the computer - the account is negative. People have literally gone all in on this and in some cases - buying the top!
The longer the low ball phase goes on, the more uncertainty it will cause. Fear of this going lower will eat away, especially for those carrying heavy losses. (I've heard people say things like "it's only a loss if you sell") All people want is for the pain to be over and for this to hit all time highs. At the moment, people are questioning crypto - regulators are edging closer - especially after the whole FTX saga. The crowd cries "banks are bad, governments steal" the issue is banks are regulated to ensure low fees and options to return stolen funds. In an unregulated market - some will get burnt!
Now, don't get me wrong - I'm not one for governments or banks. But crypto needs to establish a good regulatory footing for it's value to be realised properly.
Until then we are likely going to see us sat somewhere in-between denial and depression on our Wall Street cheat sheet.
Have a great week all!
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 Ultimate Guide To BITCOINI have thought long and hard about posting this particular post. I have shared similar posts over the last year, but never put all of the pieces together for a walkthrough on how Bitcoin has done EXACTLY as expected, institutional players have asserted their authority.
The misconception for majority of retail traders is, big boys in equals price going up.
What they have failed to consider, is the big boys are professional money makers. Wanting to make money from regular retail traders who have no clue and in an unregulated market, it's child's play.
Take a look at the post chronology, all available on @TradingView all immutable.
You need to understand why the emotional sentiment makes the chart move the way it does. You see back in 2020 I started making some of the crypto plays public, I have been fortunate enough to have been in and around crypto a very long time both on the tech side as well as being a professional trader. Here's how the Wall Street Cheat Sheet shaped this last couple of moves.
From here we were clearly at a point whereby most people still didn't truly get it, toes were getting dipped in the water and the fireworks about to pop.
Early in 2021; there where clear signs of a re-accumulation as the OPTIMISM phase sunk in.
As price rallied up and more and more retail started to cotton on to what Bitcoin and crypto could be - we arrived at the first phase of true adoption, Venture Capitalist's got in early based on technology - Private Equity and Hedge Funds started to show interest across the industry.
However, like I mentioned above - big boys in doesn't equate to prices going up indefinitely. It usually means they want to make money, to do this they require an accumulation phase of their own. Hence, after a excitement and we started seeing Bitcoin THRILLS it was clear the time was pretty much up.
The blew up a rocket post got a lot of attention; people didn't want the run to end, didn't want to believe the calls for a top. But the writing was on the wall. As many retail traders piled in - often following bad advice. The professionals where simply selling to dumb money.
It was clear to see that institutional money was applying institutional strategies. Things like Wyckoff I posted about in February (again, received negatively) "This is Accumulation" they said...
But take a look at the perfect - even textbook Wyckoff schematic from the top. The moves were defined, the target levels achieved and clear indication of who was driving.
Liquidity pools below;
I had a few technical difficulties trying to stream around this time on TradingView - but recorded an idea instead, this explaining the logic now for the move that was inbound.
Although we had a very ugly Elliott wave 4 down on the weekly, it had started to correct itself as we tagged the 3rd wave of the 5th up.
You could now start to calculate the next top - where and why. Again, pretty obvious.
In this image above the post in August last year explained the levels of liquidity up above the old all time high and why we would quickly tumble from the new all time high.
I posted a few educational post around this time, trying to get people to see where we sat, why we were likely to not tag one hundred thousand plus at this point in time.
Keep in mind the wall street cheat sheet, has mini versions of the same process inside the larger cycle...
Blue sky levels could now be defined - see the dates of these posts;
same post but highlighting the levels
And the outcome;
When you look back at all of the above, it's easy to understand why the drop from the all time high, would be no different from the strategy and moves prior. This allowed for obvious steps and stages on the way down. Again, I pointed this out with some Tradingview education.
Post the line break we would likely see a run on liquidity before the price continued down, knowing the smaller cycles are playing out within the larger - guess what we would do? Up to grab new buyers before a continuation on down.
As we waved goodbye to the panic drop below the Elliott Wave invalidation levels of the previous (1) - a lot of anger set in.
The large players in the game, now want to do a couple of things - they want to sell off early buys for Christmas bonuses and of course, re-accumulate new positions. As retail move into depression - after all, your local influencer told you $1million a Bitcoin 2022.
It's actually been a fun ride.
If you want to see more, don't forget to follow - all links are in the bio!
Have a good one!!! Trade 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.
Smart money dumb tradesThe major issue with 99% of retail, is that they seek tops and bottoms. They watch a video or read a post and DIVE not knowing, or understanding some simple logic.
To be a successful trader you need a level head. As soon as you realise profits are made in a range and not by trying to time market tops and bottoms, there more you succeed. There are thousands of techniques out there, some that have a high hit rate, others that don't, some are complex and some are simple. In instruments such as Bitcoin - you also now have tools such as on chain data. The issue is and will always be, liquidity. Money is made by someone else losing!
Retail will see things like Elliott wave and dismiss it - "ah it's old, ah it's broken, ah I don't get it..." We as humans can find the good, the bad and the ugly with all techniques.
All we are really trying to do is, re-affirm our personal opinions, defending loyalties and find angles to attack anything that is not aligned with our desired outcome. Hindsight equals the ability to explain the past but in doing so, creates an illusion that we "now understand" it all makes sense. People don't understand because they cannot explain it. Regardless of wanting to or not. Our own unique perspective is built on our own unique experiences - trying to make sense of the complicated situation.
The reason I talk about this - is that when you only take snippets of data from one source, or worse, several sources. It's so easy to get confused and mix up your own beliefs. In this current BTC scenario - people are desperate for a bottom to be in. It's all they seek, so when an influencer or educator mumbles the words - bottom, they assume it's to the moon we go. Thus, supporting the personal belief and desire.
Every professional trading strategy, requires confirmation. If the expectation is we rise from here - we need logic as to why? if it is we are likely to drop - then, what's the reason for that drop?
Over the last 2 years, I have made some of my Bitcoin calls public. There is a lot more behind the scenes that does not get posted, so what you should not do is - read a small percentage of a post or watch the first few minutes of a live stream and dive in. Your missing the bigger picture!
This doesn't just apply to my posts - this is in general. This will help you in the long run. You need your own level of understanding for the logic behind the move.
I can show post like this back in March this year;
And the outcome was as predicated -
We grabbed liquidity and dropped seeking a better accumulation range.
I've talked about value areas - this post goes back another year...
The outcome -
For me, it's knowing the "why".
The lesson here - is no obtain a bias of your own. Work on that to see inside the move.
My view is pretty much as I have talked about this last 14-18 months...
We have seen some stopping action.
Now you look out for a range -
Obvious liquidity in this zone.
So this is 100% a lesson and not a call. Now look at the range in detail, you will see a fair value level hidden in there.
Same goes for knowing the "why" - as Bitcoin becomes more institutional, it becomes more and more respectful. But as it does, tops and bottoms are still not what your targeting. Look at this from Feb last year from the first rally all time high.
Look at the post date.
These things are playing a game - it's all about understanding the rules.
On the way back up from the low shown in March last year, why would there be evidence for a truncation?
This image was the 24th of August. We go on to climax just above the 65k region...
Liquidity is the name of the game..
This post is the first in the Liquidity series of posts here on @TradingView
Have a great weekend!
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 story of MichaelMichael had been hearing a lot about this new product that was powered by the internet. It was supposed to be amazing, and he was really curious to try it out.
When he finally got the chance to check it out, he was not disappointed. The product was amazing, and it worked just like it had promised. He could do everything from shopping to banking to Investing online, all from one convenient location. It was like a micro-strategy all in itself.
He quickly became a fan of this new product, and he started telling all of his friends about how great it was, shilling it on social media and having calls with anyone who would listen. Of course, they were all eager to try it out for themselves, and soon enough, everyone in Michael's social circle had become hooked on this internet-powered product.
Then the people in the social circle started talking about it, like they had a clue.
It was then so widely discussed, every man and his dog jumped in, even if they didn’t understand it!
I mean, it all just seems so complicated. And when you add in the fact that large investors and governments know that retail investors don't know how to invest wisely, it just makes me feel even more overwhelmed. But not a concern for Michael or his merry men.
It was back in 2009 when this product came into existence. Nobody was talking about it, or nobody that anyone cared about was talking about it. You could make a fortune if you got in on the ground floor. Instead many got in at a much, much higher price point.
And boy, what a surprised! Turns out, this new investment product wasn't actually meant for retail investors just yet, people who didn’t understand and got greedy listening to Michael n co. It was meant for large investors to profit from silly retail – although much like the NHS Brexit pledge, big boys into a product doesn’t mean a good outcome for the masses.
Many invested life savings into this product without knowing anything about it. And of course, within a few months the whole thing came crashing down. The price stayed low for months on end.
It's no secret that banks make a killing by trading against retail investors. But how do they do it? By taking advantage of their customers' lack of knowledge, of course!
Knowing that the average person won't take the time to learn. They can attract the suckers, when the retail-investors pull the trigger and buy, the big boys will immediately turn around and execute the sales feeding the rally. Clever really isn’t it?!
It's a dirty little secret that most people are unaware of. But once you know how to play the game, you can start beating the big boys at their own game!
If you've ever traded stocks, then you know that the banks always seem to come out on top. They make money by fooling retail traders into buying and selling at the wrong times. This new shiny, internet product – well, no different. Although many said "it is different this time"
But here's the thing: most retail traders don't understand how it works. They see the price going up as a signal to buy, so who is selling to them I wonder?
Moral of the story, don't listen to Michael and his cronies. Take the time to appreciate the charts.
Chasing DXY - S&P, BTC, XRP DXY is becoming interesting, with the global views of recession. What's happening in Ukraine, will we see another Covid round? Many traders don't know which way to turn. DXY is a good indicator for majority of the markets - after all, most commodities purchased globally are done with USD. Keep an eye on the following move as this will trigger the SPX rally, Bitcoins 5th wave and many, many more.
Here's a look out on the monthly view;
Stepped down to the weekly;
And finally, the daily.
If your keen on crypto - watching DXY do it's dance is definitely useful. Take a look at the images in this post from a couple of weeks back, you can see how these levels also effect Bitcoin.
Have a great weekend!
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.
Why is trading so emotional?
In August last year, I published an educational post around Fibonacci. There's also thousands of articles and books available on the topic. But how does it fit with being emotional?
Often people talk about Algos, smart money concepts and a load of other terms. All trying to make sense of the market, Fibonacci isn't magical or mystical. It's a set of simple numbers that work - due to humans wanting to see patterns in everything they look at.
Here's the article from last year - feel free to click it and go through that one as well.
The issue I have when educating people - is there is always a desire to find an automated solution. I keep saying, if algos are that good - we wouldn't have school, doctors or firemen; they would all be sipping cocktails on a beach far away! If you want to learn technical analysis, you really need to dig deep into the emotional analysis. People like Dow, Elliott and Wyckoff (for me, are not technical gurus) they merely understood - human psychology made waves, changed sentiment - the bigger players in the markets know this. It's why most news outlets and websites around TA push writers who only talk MA's and RSI's. It keeps fresh sheep on track.
The market is all about liquidity - these levels are created at psychological levels & from there, it's copy, paste, repeat.
Take a look at this on the current Bitcoin move down from the All Time High.
Swing 1 = 618 of A-B
Swing 2 = 100% of the A-B
Swing 3 = 100% of the A-B
Swing 4 = 618 of the A-B
Swing 5 = 1.23 range and 1.27 range of the A-B
Then even when you step down a level you can see the move inside the moves looking similar. Local support is 618...
When I started posting on @TradingView publicly - I explained why we where seeing value areas and re-accumulation for the first times.
These levels were starting to show signs of the crypto space being institutionalised. This is important to understand, as much like Fibonacci levels, the price would now act in a different way to psychological levels. In stepped Wyckoff and you could see from before and after - where and why the price would go.
Before
Here's the AFTER shot.
Lucky Guess? Well - maybe on the way back from the 28k levels highlighted in March, the very same fibs became obvious. If we where seeing Elliott waves form you could therefor measure the fib extensions.
This was August the 24th - read the comments as to why the drop was coming (4 move) and why we would likely see the drop just above the old all time high.
By October we had seen the forecasted extension levels getting hit - a retest followed this and we dropped.
So, like I said - there's nothing magical, it's all about sentiment and psychology. Learn this and you will progress as a trader.
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.
Key levels and why, then how to spot themI've written several articles around various educational topics here on @TradingView all of which have their individual application and use case.
This latest post will go into how you can identify key value areas, or what I like to call "Auction areas".
In essence these are areas or zones where Dumb money becomes active, often at highs or lows & usually in the wrong general direction. You only have to look as far as this guy and nearly 2 million followers - buying the ATH's of Bitcoin last year.
In December 2020 I wrote an article on Bitcoin here & why it was starting to show signs of becoming institutionalised.
And slowly set the path as to why we are then likely to see "Value areas" being formed.
In Feb 2021 I followed this up with the identification of a value area.
As you can see; this is how powerful these levels become
These levels are only part of the bigger picture - but you will see how and why they are relevant, how they can be used to find both highs and lows - as well as giving a larger picture bias on the general direction of the move.
==================================================================================
Now you have a little context.
To understand why they work, you need to appreciate, what they are - As I mentioned above, these are zones where Dumb money get excited! It's as simple as that.
Many indicators are designed and shared to mask true market cycles; people will spend years trying to find the secret sauce. However, things like Bollinger Bands, MACD's are only fuelling the dumb money machine. Take Moving averages for an example - if we have an aggressive uptrend, you should expect a sloping moving average. With a few buttons and presses in the settings, you can edit a moving average to fit the chart.
So strip it all back.
What you are looking for is, areas of consolidation - these areas are indecision zones where buyers and sellers are actively seeking value. These levels create the foundation of the value area range. This can then be used alongside liquidity pockets and used to enter or exit trades. Click this image below and see the levels get tagged, this is due to the collection of Dumb money stops & entries, followed by a reversal into the lower liquidity area.
Ok so how are they identified? Well, first of all you have consolidations; these tightening ranges of price will highlight the auction has began, we now have both buyers and sellers active.
As you can see in this chart above; we have two large areas to the upside of untapped liquidity...
Zoom in and you will see heavier zones whereby volume was heavy, but price hardly moved - this is a hint towards liquidity sitting there.
If you apply a simple tool like "Fixed range volume" you will see the profiles are concentrated around these levels; hence acting like a magnet to price.
-----------------------------------------------------------------
A great example of this was to use the levels created, in conjunction with Fibonacci extension levels to spot a potential zone for the upside (into unchartered territory) of Bitcoin's new ATH.
This was clear as early as August, we would tag the old liquidity levels and plummet back below 40k very quickly.
The levels are useful, especially when combing with other techniques such as Elliott, but when you apply Fib's and can spot key extension levels; it's a lot more likely to be pulled towards such levels if there is a consolidation cluster. This is merely "Dumb Money" value areas being bought and sold. Optimal for institutional players, or as Richard Wyckoff called them "Composite Man".
Looking at COT data and knowing the levels - meant we were 100% less likely to see $135,000 in December last year; CM was selling into the retail crowd.
============================================
So now you can see areas of interest, these levels are permanently set - although they become weaker over time, they still represent value for both buyers and sellers and are likely to become support and resistance at later points in time.
There are several strategies and methods to use this knowledge, some of which I will post in later posts. But I would advise you go away and try and spot some of these levels on other charts.
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.
Wyckoff Schematics broken downBack last year I posted an educational post on the Wyckoff Distribution schematic I was seeing on Bitcoin. This was the logic behind the "Rocket Call" back last March.
It was knowing where to search for an accumulation (which it was not) or a distribution. There are a couple of tell tail signs outside of Wyckoff literature that can assist in knowing which is which for various reasons (not for this post).
So at the 60k marker first time around, I could see the logic for a Distribution and it revealed it's hand very early on. I wrote this educational post around the topic.
Knowing Wyckoff - it's more to do with human psychology than technical analysis - many people said at the time, oh it's 100 years old, can't work in crypto etc, etc. Unfortunately as the human race, we are getting dumber and dumber, making these schematics almost more valuable in today's markets.
After we had our move "Rocket" post. I covered another educational post hinting at the accumulation phase - naturally, the price drops and rises as the waves.
In this post I covered the key for the terminology used in these schematics.
Below you will see some info on the phases of an accumulation schematic.
Accumulation Schematic
Phase A
The selling force decreases, and the downtrend starts to slow
down. This phase is usually marked by an increase in trading
volume. The Preliminary Support (PS) indicates that some buyers
are showing up, but still not enough to stop the downward move.
The Selling Climax (SC) is formed by an intense selling activity as
investors capitulate. This is often a point of high volatility, where
panic selling creates big candlesticks and wicks. The strong drop
quickly reverts into a bounce or Automatic Rally (AR), as the
excessive supply is absorbed by the buyers. In general, the trading
range (TR) of an Accumulation Schematic is defined by the space
between the SC low and the AR high.
As the name suggests, the Secondary Test (ST) happens when the
market drops near the SC region, testing whether the downtrend is
really over or not. At this point, the trading volume and market
volatility tend to be lower. While the ST often forms a higher low in
relation to the SC, that may not always be the case.
Phase B
Based on Wyckoff’s Law of Cause and Effect, Phase B may be
seen as the Cause that leads to an Effect.
Essentially, Phase B is the consolidation stage, in which the
Composite Man accumulates the highest number of assets. During
this stage, the market tends to test both resistance and support
levels of the trading range.
There may be numerous Secondary Tests (ST) during Phase B. In
some cases, they may produce higher highs (bull traps) and lower
lows (bear traps) in relation to the SC and AR of the Phase A.
Phase C
A typical Accumulation Phase C contains what is called a Spring. It
often acts as the last bear trap before the market starts making
higher lows. During Phase C, the Composite Man ensures that
there is little supply left in the market, i.e., the ones that were to sell
already did.
The Spring often breaks the support levels to stop out traders and
mislead investors. We may describe it as a final attempt to buy
shares at a lower price before the uptrend starts. The bear trap
induces retail investors to give up their holdings.
In some cases, however, the support levels manage to hold, and
the Spring simply does not occur. In other words, there may be
Accumulation Schematics that present all other elements but not
the Spring. Still, the overall scheme continues to be valid.
Phase D
The Phase D represents the transition between the Cause and
Effect. It stands between the Accumulation zone (Phase C) and the
breakout of the trading range (Phase E).
Typically, the Phase D shows a significant increase in trading
volume and volatility. It usually has a Last Point Support (LPS),
making a higher low before the market moves higher. The LPS
often precedes a breakout of the resistance levels, which in turn
creates higher highs. This indicates Signs of Strength (SOS), as
previous resistances become brand new supports.
Despite the somewhat confusing terminology, there may be more
than one LPS during Phase D. They often have increased trading
volume while testing the new support lines. In some cases, the
price may create a small consolidation zone before effectively
breaking the bigger trading range and moving to Phase E.
Phase E
The Phase E is the last stage of an Accumulation Schematic. It is
marked by an evident breakout of the trading range, caused by
increased market demand. This is when the trading range is
effectively broken, and the uptrend starts.
There is an awful lot more when it comes to understanding Wyckoff - such as volume, but it is too much to put in a handful of posts. These posts are done to give you an insight into trading Wyckoff.
Another useful post on this topic is this below;
People tend to look at Wyckoff on a Tick chart, a 1min or 15 minute chart - the same rules apply and are potentially more beneficial and applicable on the higher timeframes, seeing a weekly move play out in terms of a schematic could take several months. It's all about knowing what to look for.
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 - What's changed? really???Ok, so I haven't posted an idea for a while. That's mostly due to not much has altered, if you have followed along over the last year or so you will already know where we have been and the expectations on where we are going.
My last Tradingview post was joking about the lack of intelligent life in the crypto space.
We have seen the likes of Carl the moon, MMMMM & C for crypto, Even Saylor has lost his job. Plan B,C, D or whatever he calls himself and his model these days. $135,000 December - what year should have been asked...
I covered the Saylor average and why we might be hanging around here for a while...
I also covered what I call step levels; take a look at these.
And the date posted.
Now take a look at how these have been respected.
The roadmap from last March is still valid and playing itself out, it was only a monthly 4 and will take a while - so kick back and enjoy the ride.
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.
3rd Roadmap update. Based off the first Painting of the roadmap publicly back last March. I have updated the plot back in November - so here's the 3rd variation.
Let's start back last March with this;
The extension levels pointed towards the $62,500 level. This was targeting the weekly 3 for a drop down to 28k territory. This was shown in the "they blew up the rocket" post.
On the move back up I had explained in August why we would only see a move up shy of $70,000. This was first highlighted as another Elliott extension with a low volume move up confirming this;
Extension level in September
Fast forward a month;
The interesting thing here is that Bitcoin is becoming ever more institutional - Following the COT data we can see still huge short positions; this plays perfectly into the monthly 4 move. I covered this in the COT post;
Then we neared the extension level; distribution started to show it's hand AGAIN;
I updated the main Roadmap in November with this post;
www.tradingview.com
As we neared the top of the move: the value area range showed more signs for the coming drop.
As I covered in the last couple of streams - We are now midway through the 0-A with 2 distinctive options showing their hand. You have to keep in mind this is Monthly; until the COT Leveraged funds start to tip the scale; expect the low volume move; profit taking and accumulation hand in hand.
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.
