“Less is more” as Mies van der Rohe, a German architect of the 20th century, famously said about creating the most perfect architectural designs. Most of the time we tend to overcomplicate things losing ourselves in the complexities of life. We need to focus on what really matters. We need to simplify things to have a wider perspective and understanding of life
The same applies to markets. There is no need to use a high number of indicators or very complex ones to become better. Most of the times just 2 indicators reveal to you many things about an asset.
Take a look at the chart below. I used 2 indicators. Moving Averages (50 & 200) and the Relative Strength Index (RSI). With these two indicators you could have found each top and bottom of the bitcoins cycle.
On the RSI (at the bottom) I connected the two peaks in 2013 with a line and each successive peak, that has followed since then, has reached the top exactly when it touched that line again.
Same thing for bottoms. The perfect opportunities to buy were when the RSI reached the lowest levels and it touched or came in the proximity of the white line on the RSI. You can also see that bottoms were reached when the price action consolidated and bounced from the 200 MA.
We can also identify pullbacks. The midline channel on the RSI is an important support and each time when the RSI bounced up from that zone, it was confirmed that the correction was only a pullback and not the beginning of a bear market. The most recent one was in September of this year, when almost everyone was bearish and believed the bull cycle is over for Bitcoin.
The next top which will come in December (according to my estimation) will touch that red line again. The wisest thing an investor could do during that time will be to take profits on all of his trades. The longer a thing was worked, the highest the probability will be that it will continue to work in the future
The same applies to markets. There is no need to use a high number of indicators or very complex ones to become better. Most of the times just 2 indicators reveal to you many things about an asset.
Take a look at the chart below. I used 2 indicators. Moving Averages (50 & 200) and the Relative Strength Index (RSI). With these two indicators you could have found each top and bottom of the bitcoins cycle.
On the RSI (at the bottom) I connected the two peaks in 2013 with a line and each successive peak, that has followed since then, has reached the top exactly when it touched that line again.
Same thing for bottoms. The perfect opportunities to buy were when the RSI reached the lowest levels and it touched or came in the proximity of the white line on the RSI. You can also see that bottoms were reached when the price action consolidated and bounced from the 200 MA.
We can also identify pullbacks. The midline channel on the RSI is an important support and each time when the RSI bounced up from that zone, it was confirmed that the correction was only a pullback and not the beginning of a bear market. The most recent one was in September of this year, when almost everyone was bearish and believed the bull cycle is over for Bitcoin.
The next top which will come in December (according to my estimation) will touch that red line again. The wisest thing an investor could do during that time will be to take profits on all of his trades. The longer a thing was worked, the highest the probability will be that it will continue to work in the future
King