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Psychology

A Breakout or Another Bull Trap? Market Fundamentals Included*Today is an interesting day, most people who are looking at hourly and daily charts (or shorter term charts) are thinking that Bitcoin is on a breakout. Short term charts are signaling a breakout. But do not be fooled, market makers know how to play with people's psychology. If we look at weekly and monthly charts, the bull case is still not there. In fact these moments may be the worst moments to buy into FOMO. Before taking a look at weekly and monthly charts, let's analyze the current market fundamentals. There are 3 top issues that needs a resolution: Tether & Bitfinex G20 Commodity vs Security Probably over 90% of the market thinks that Tether manipulated the market many times, and they don't have the money they have been telling in their banks. Audit issue, subponea, and the days that tether printed heavily (i.e. market manipulation), all correspond to a negative scenario. There are almost no positives that may lead the market to think that Tether issue will be resolved without any problems. Tether is used in most exchanges, and if it collapses, the whole market will go into a crash, and media is going to make it even worse. Bitfinex, who is known to be closely connected with Tether, will probably take a big blow too, if Tether collapses or fails to show the money they printed in their banks. G20 is another key issue that most people only heard about 3 days ago in this post by Coindesk: www.coindesk.com . Since the overall panic atmosphere that we have seen last week is kind of gone after the CFTC hearing, market didn't seem to care so much about G20, yet. A month ago there were news about "Monsieur Bitcoin" (a well known critic who was former deputy governor of the Banque de France), being appointed to regulation task force in France. In the meanwhile, there are lots of hints that cryptocurrency is going to be a hot topic of G20, during March gatherings in Argentina. G20 is the biggest international gathering, and it is very likely that there will be news that will create panic in cryptocurrency markets. I believe this issue is even bigger than Tether issue, because if nations take offensive approaches to cryptocurrencies altogether, we might go through a very rough market. Tether collapse might be forgetten in a couple weeks, but if G20 decides to act harsh on cryptocurrencies, we might see months of trouble. Commodity vs Security issue has been talked in CFTC meeting, but it was only the tip of the iceberg. While most ICOs and cryptocurrencies like to defend themselves as commodities, regulators will most likely see most cryptocurrencies and ICOs as securities in the future. J. Christoper Giancarlo became the hero of cryptocurrency fans and evangalists by defining cryptocurrencies as commodities. However, there was an opposing side during the hearing, which was suggesting cryptocurrencies as "undercover securities". While CFTC meeting brought a relief to a crashing market in general, there are a variety of nations' regulators and SEC, who might decide to see cryptocurrencies as securities. G20 meetings become even more important in that sense, because nations will gather there to decide whether to see cryptocurrencies as Commodities or Securities. If cryptocurrencies become defined as securities, this will cause problems for both ICOs, exchanges, and cryptocurrency investors in general. Even though bulls got encouraged by CFTC meeting, market makers probably do not feel as positive as bulls about these unresolved issues. Whether the market is bearish or bullish, they always find great opportunuties to make money. The CFTC meeting gave the market maker whales the opportunity to buy during 6000s and lower 7000s, however, they have a different greed than we do. They love to make profit during bull traps, and get even more greedy to push the prices even lower.
COINBASE:BTCUSDShort
by CryptoPsyche1
2
BTCUSD - Venus Trap disguised as recovery after binance comebackRight now we can still observe a relative sideways movement which could be mistaken for a reversal of trends to the upside. (Volume temporarily increasing artificially as a lure but bitcoin dominance falling from 36% towards 34% as people trying to "secure" their assets in altcoins although if BTC drops everythings dips anyway). The volume resistance at the time of writing seems to be 424 bn. (falling) Today binance finally managed to stand up after an unexpected and prolonged downtime of more than 24h. The fourth largest BTC trading platform by volume is now being flooded with panic buying, fueled by an artificially increased FOMO and weekend gambling. This is not sustainable and won't be able to break the overall bearish trend and downtrend channel of BTC. The MACD seems generally bearish as well. The bulls would like to break the very strong 9000 resistance but struggling heavily. The bears are patiently waiting for people to regain trust only to form another surprising bottom. Retesting the 5800-6100 area seems necessary and potentially the bears would welcome a further drop in hope of activating a second round of panic selling so they can enter the market around 6000, 5000 and 4000. Just be patient and see how it develops. Some expect the next major dip around 10th, 11th or 12th of February 2018. Others think a large bottom will form around the asian lunar year celebration on 16th of February or even 1st of March. Some even forecast a hyperinflation of USD fiat between March-May which could be corelated to the crashing stockmarket but I think they will simply print less fiat to temporarily circumvent a 2008-2010 like crisis. It's always a good idea to have some metals and cryptocurrencies stored. Historic lows were: 5800-6000 (6th Feb 2018) corresponding to 5800-6000 (12th Nov 2017), 5500 (25th Oct 2017), 5200 (18th Oct 2017), 4200 (5th Oct 2017), 3600 (22nd Sep 2017), 3000 (15th Sep 2017).
COINBASE:BTCUSD
by katyusha
5
A Wyckoff Analysis of january 2018 Bitcoin "bubble"In Wyckoff Analysis, four main phases occur during the trading cycle: accumulation, markup, distribution and markdown. Accumulation phase is when smart money enters on a long position, when general public is not interested. Markup phase is when parabolic movements start, driving media and public attentions, when entusiasm and FOMO make their victims. Distribution phase is when smart money start exiting lasting only newbies' money. During distribution, bulls fail to stablish new highs, a big correction may be seen, driving fear to the market, this correction is followed by a lower high. Usually where traders exit positions and public think everything is back to normal, this is called bull trap. The Markdown phase is when ansiety, fear and pain make general public close positions with huge losses.
BITSTAMP:BTCUSDEducation
by UnknownUnicorn288635
7
Case Study for Mismanaging a Disciplined Trade StrategyIn the most recent BTCUSD dip I made a series of mistakes that put me in a slightly nervous position overall, but still generally favorable. Over a series of trades I managed to find myself in a position with an average buy price of $7486.13. Trading profitably on the dips I reduced this average buy price to $7348.21. Throughout this series of trades I had multiple opportunities to take profit and this discussion will focus on trading psychology and process failure. Early in my trading session I had managed to identify successfully entry levels that were reasonably close to where I could make a "dip" profit. Generally my target is around 2%. Given the big dip from $9.2k to below $8k and given the duration and recovery of that dip from $10k I felt confident that the market was oversold and all of the order book charts indicated an overall strong buying to selling ratio. My price target was just below $8.5k and on the first move up it hit $8.4k and I felt like there would be an orderly move over time. What I learned with this recent price action was that trading bots and whales/funds that control them have disproportionate leverage over price action. Not being fully aware of their techniques, I decided against adjusting my price target and I was "too greedy" and completely missed my profit opportunity after being presented double my normal target over two periods. Now having missed that opportunity I was forced to double down knowing that the next price move would likely be much bigger and deeper. Trading for profit on the way down I was able to recoup some of poor positioning but again, I did not quite understand the techniques of these algo bots until near the end when I was able to make an adjustment to how I choose price targets to better compensate for whale/shark algo bots. Setting price targets for exiting my position and reducing my risk came down to three possible outcomes: 1) Sell ALL at a higher price that would make profit but also leave me no room for error if I missed at $7800. This price level would have still been poor risk/reward overall so this exit strategy seemed like a mistake. 2) Sell ~half (47%) of my position at a profit at $7400 and then sell the other half at $8000 for "break even" on that part of the trade. This seemed like a prudent risk management strategy as I would have funds to take additional profit if the market moved back down while leaving in place a position that could become profitable over a longer duration. 3) Sell ALL at the higher price target that would give me a much bigger target but leave me open to poor risk management again. This was definitely the worst option. So I chose 2) which worked ok in that the first trade target was hit as expected. Then, while watching the order book I started to worry because there were big sell walls below $7500. I thought about how stressful it would be to ride that position back through another big dip and because of fatigue also overly focused on this possibility rather than going back to my pre-defined strategy of hodling for $8k on half and trading with the other half. Clearly, stress causes one to adopt a risk averse mental state. And this kind of risk aversion usually leads to the panic selling and "weak hands" phenomenon of selling at exactly the WRONG time, i.e. when you should be thinking about buying. So when I saw the price being challenged at $7k to $7.1k with very clear algo bot action pushing the price in both directions with very light buy order positioning I became a pawn in this algo bot action and decided to exit early and go take a nap rather than have to sit through another big dip with half of my fund at risk. Rather than see any huge sell wall the sell-side volume relented and the price nearly hit my price target of $7.9k. If I had been more disciplined I could have set a contingency (less greedy) target below $8k but I changed my plan using no particular reasoning whatsoever other than fear of these algo bots.
COINBASE:BTCUSDEducation
by powderpc
BTC to test it's limits?Looks like BTC might want to test the limits before a bounce occurs, a lot of support lines have been demolished on the this brutal fall. Big institutions wan't BTC dead, media FUD and conspiracy causing the weak hands to sell into the grubby hands of the big players. Like taking candy from a baby we could say. The whole reason BTC exists it to fight against the "man" and his big brother status, this is another attempt to secure control of money in this world. This is the chance to take back as much control as we can, they can't win only strengthen their position in the inevitable outcome. This will be the biggest transfer of wealth the world has ever seen, are you going to fall for the FUD and manipulation? Please be careful shorting at this period of time. BTC has proven resilient against all crash/fud in the past, so why would it be any different now? The crypto market only really began in 2017 to 2018, markets like this cannot go away during one price correction. Don't get me wrong, BTC was bought up in a parabolic move once again and a correction in price was expected by hodlers and traders alike. When history repeats itself, are you going to be a winner or a loser? A hodler or a seller? Only time will tell. Pick your side, for or against. C'est la vie!
BITFINEX:BTCUSDLong
by UnknownUnicorn89296
1
A Simple ExerciseThis is an exercise for everybody who is new to trading and trading cryptoassets in particular. You may want to try this before you bet your house. It's very simple: You take some money that you can afford to lose . However the amount should be substantial enough that losing it would hurt you - if only a little. You put that money on your cryptocurrency exchange of choice. You wait. Should price reach the green area in the chart within the next four weeks, you go all in and buy Bitcoin for the whole amount you deposited. To be continued... P.S. This exercise won't work if you just do it on paper. You will need to use actual money to buy actual Bitcoin. But please, be sensible when choosing the size of your investment. Remember, you might loose it all.
BITSTAMP:BTCUSD
by Nathan_the_Wise
2
Ripple XRP the Ultimate Pump n Dump or Mid-Term Play? BITFINEX:XRPUSD Genuinely watching Ripple while trying to avoid the extremes of the pumpers. Unfortunately I got into the blockchain space late but have been devouring information like crazy. While waiting for my funds to transfer in to any exchange I could get on was painful. While waiting for a wire, then Crypto Capital to CEX, Ripple moved from 0.23 to $2 (CEX was early for the move up due to low volumes). This was beyond frustrating. When I realized my Bitfinex account was set up - yes you can trade without being verified - I felt that Ripple already went too far too fast (at $1). The latest news took it to $2.40+ but the cliff is now occurring. To me, this is more like a buy on rumour, sell on facts (aka pump n dump) than a real value play. Or is it? Why? Anyone who really researches blockchains, knows the limitations. IOTA is hands down better and solves all the blockchain issues. I don't foresee banks or others going with Ripple if IOTA creates their own version, with none of the same issues as blockchain. Ripple was great for anyone who got in sub- $0.25, just as a spec trade but I don't see any future value in Ripple, once banks realize: Ripple is only needed for the short term, until they develop their own, most likely based on Tangle. IOTA's Tangle is better, with none of the blockchain issues. Financial powers use a Tangle based crypto created by IOTA. Governments create their own Tangle based cryptos. Ripple was a great spec trade and I'm sure made many people a lot of money. Can anyone tell me how Ripple can make money and why that justifies a crypto value of $100B+ in market cap? I can understand the spec trade, but not the value based on technology that is already outdated compared to the competition. IMO, the future belongs to IOTA or another block-less technology.
BITFINEX:XRPUSDShort
by Miykael
10
STRAT/BTC (LONG) analysisSTRAT is a coin that is following market psychology on the dot. STRAT bottomed and then hit the accumulation zone. It is currently in the phase of "Revival" and could easily repeat history by passing prior ATH. STRAT has also tested its platform and will have two ICO's being dropped on in late January: twitter.com According to the CEO, one of these companies is already huge in China. Technically, and fundamentally strong, STRAT is one to watch out for 2018.
SLong
by XtreemxZ
2
The markets are there to make you feel stupid or brilliantMany a trader will have made their best analysis based on information at the time and then taken an entry position, only to find that the market does something unexpected. Price may move violently in the wrong direction i.e. not the favoured direction and comes close to a stop loss or actually stopping out the position for a loss. Now with hindsight a trader feels or thinks, " How stupid - I should have seen it coming. I shouldn't have done that. " This happens enough times to new traders. Seasoned traders live with it and have less such self-talk. I think it's important to acknowledge those feelings. These are partly thinking processes and emotional processes. New traders often feel demoralised after 10 or so failures in a row. " Am I doing something wrong? " - they may think. This is a reasonable question. It could be that something is wrong. However, nothing may be found wrong with one's methodology or application of one's personal rules - after a careful reassessment. It's good to check. The BTCUSD chart shows what is some sort of 'head and shoulders' pattern. It's not the best picture of it in the world but something is there. Wherever one takes a position in BTCUSD, it could be wrong. Why? The markets respect no one person. A proportion of traders will have taken a position in this and made some real profits. They will punch the air and with joy go, " YESSSS!! " From my long experience I've learned that 'feelings' of being right or wrong, actually bends the mind a trader. I'm speaking for myself quite clearly. Others may have similar experience. A feeling of being good after a string of wins, often creates a subconscious sense of confidence. Imperceptibly this can creep into future trades and then one realises some major losses. My own strategy is to try at best to reduce trading frequency and exert even greater diligence in entering trades after a series of wins. I aim to expect the unexpected. It's always a tad difficult when I get stopped out for a loss. But I repeat to myself that the stoploss is there to protect against the 'unexpected' - so it's not actually unexpected. It is a limit. It is the expected limit of price moving not in a favoured direction. There is no single path to 'a promised land' in trading. Traders can adopt different methods, different rules, and be consistently profitable. The largest obstacle which is difficult to train out a trader, is their own personal psychology . By this I mean things like attention to detail, biases, emotions, discipline etc. So in many ways feeling stupid or brilliant can affect our future decision-making in imperceptible ways. Traders can lose discipline after losses or big gains. Mark Douglas spoke about these sorts of things. The BTCUSD chart is not intended to attract thoughts on whether to go long or go short. I'm not really interested in whether the H&S is there at all or correctly drawn. I'm taking it beyond that. What happens next to traders who come out of this period - some bruised, some overjoyed? Trading is not about winning one trade or a small handful. It's about the long road ahead. I'm delighted if others can share their experiences.
BITSTAMP:BTCUSDEducation
by Captain_Walker
New to the Cryptogame and learning painful lessons along the wayI always believed that you learn the most when you get hurt. I dove into the market with the fear of missing out on the tremendous upside and potential of this platform. I have long been programmed by the mainstream institutional investors that getting 10-15 gains are the best. I have risked a lot in the stock market before and have been fairly successful so this is yet another endeavor into something new. The first mistake that i made was getting swooped in by the herd mentality and thinking that I was still early in the game. Besides I was the only one talking about bitcoin and its potential. So I figured there's time and since everybody else was not able to take I chance. I went ahead and decided to jump in. Unfortunately I got trapped into the coinbase waiting game and wiped out about 30 percent of my initial investment on paper. When the correction was happening I kept thinking in my head that I should pull out and save the remaining capital. Fortunately, the same thing that got me trapped during the fall also prevented me from getting out and actually realizing the loss. Its just paper loss so far. Then came the lessons learned from the stock market crash during the bank crash. Dizzy and nauseated by what appeared to be an imminent crash all the way down to zero a sudden calm state emerged. Ive been here before. Ive done this before. One mistake on the upside cant be corrected by another mistake on the downside. Painful lessons being learned will hopefully translate into success into this new platform. To all the ones that are dipping their toes...educate yourself, learn from the experience, and tread cautiously. Take your time and contemplate your actions. In time if you truly believe that cryptocurrencies are not a scam or a ponzi scheme...things will be alright. Here's to learning growing and maybe making a new living!
BITSTAMP:BTCUSDLong
by bderosas1920
1
DOW 25K or Gap Fill for xMAS?Hi Traders, Wasn't able to post this as quickly as I wanted to. After a 100 point straight fall upon open we always see the same thing: Back to the top we go. What happens when we get there? The question remains, how will markets react... we're slightly over 100 points away from the psychological number that is 25.000, but there's also a HUGE gap that needs to be filled in the mid 600s level. It can EASILY go both ways as the Tax Bill hype has calmed down. I Recommend trading a simple breakout strategy. 1hr Candle close above current ATH then long to 25K. And vice versa if we get into the '"Gap" area.
TVC:DJI
by ChasingTheMarket
USDJPY - getting ready to sell or buyOn the chart i marked 2 circles - red and green , green will be the price zone to buy after a false break down and red will be the sell zone after a false break up. Also red zone will be the 38% retrace zone of the last move down - i didn't marked it because i don't want the chart will be to messy. Anyway, the really important idea here regardless to the buy / sell from top to bottom is the entry price opportunity for longer term buyers/sellers - eventually i think USDJPY can go to 110 zone or 112 zone ( without to much of retracement ). Best of luck to the bulls and bears :-)
by uriyaz
Fulfilling a promise to share my trading Part 2.1The psychological aspect and my thought process Hello everybody, I'm so sorry that the migration did not as fast as I'd like it to be and, finally on last it's done and I can be back on trading. Before i touch on how i would trade, i suddenly thought sharing my thought process would make so much more sense because literally you will understand how i use my strategies. I felt there are so many good systems around but it becomes ineffective in may cases because i cannot execute it the way its creator does perfectly. After trading for many years, i also felt the best strategies, whether its original or copied, will be successful if it becomes your "strategy". This requires a lot of practise, patience and perseverance to keep trying. So if you are feeling lost out there, don't be because everyone goes through almost the same process. I'd like to do a quick recap on what has been shared so far. In part 1, I spoke mostly on breakout on the A6 traded on CME and then, how to use a simple pullback to trade it. Part 2 follows up on part 1 which focus on not chasing the market if you have missed it as in most cases, from the 3rd impulse move(up) onward as it loses momentum. Rushing into trading a trend that has lost its momentum can keep you longer in a position longer then it should be. This exposes you to risk which can be external (unexpected central bank announcements, data announcements, war etc) or internally which is your psychology at that moment. If you are trading smaller account, the trade locks up your capital which may also lead to additional holding cost or opportunity risk. In some cases, it frustrates you so much that you start doing funny things like scalping, averaging in, adjusting stops etc. Why lose good money after bad? Trust me if you do get into such scenarios, just bite the bullet and cut it off!! Learn from it. The worse that happened to me was, i used to average in and adjust stops frequently for a period of time and occasionally make money out of it. Somehow, this creeps and lived in my sub conscious for a long time and unknowingly caused big draw downs and almost destroy me mentally and financially The next time, just practise and train yourself to be patience if you do encounter such a scenario and ask yourself 3 questions: 1) How many moves the market has made in this direction (stick to your time frame, do not use multiple time frame here!) 2) What is the risk to reward if i enter? 3) Trade smaller Just try to do this and you will see how much you benefit from making small and simple steps that shape your thought process and produces results which also reinforces positive psychology which is confidence! In part 2.2, i will produce a quick peek into my thought process and share how i would trade using another simple technique.
AEducation
by trutt79
Fulfilling a promise to share my trading Part 2Hello everyone, i haven't been publishing much this week due to some platform migration issues. So, keeping my fingers cross that all will be resolved next week, Now, i'd just concentrate on delivering my educational series and hope to continue to benefit the trading public. In the first part, i shared a very simple momentum trading strategy. Simplicity works and allow you to make quick decisions if you are doing day trading. However, it does work on longer time frame as well. Do your own back testing and see how to make a strategy yours. So, after the strong up move, which i defined as the "impulse" move the instrument will come to a point where it loses the momentum. Profit taking, sellers taking up new positions, some news announcement whatever the case is. It doesn't really matter why. As a trader my thoughts are: "i want to go long assuming a longer uptrend is forming". Start to build a case around it. You can be on the sell side if you want to but my experiences tells me the chances of it going higher is there. What if it doesn't? Well, that is why I have a stop loss in place. So, if you refer to the chart above, the market is in the 3rd stage of the impulse move. Usually from the 3rd to 5th move, i don't bother too much until the uptrend line broke. So, the market has pierce through several structural resistances before a nice shooting star formation ended the impulse up move. Why do i still want to long? Again simplicity is at work. As long as the previous "New Structure High, Higher Low" remains intact my view does not change. There are tons of information which you can google on these terms. Feel free to study it. I'd be back on Part 2.1 with the actual trading plan as soon as possible! Till then, try to understand not the trading but how i shape my thinking before i trade it. Nothing is more important as developing the thought process.
AEducation
by trutt79