This ed post is not aimed at anybody and thinking that it was aimed at you should in itself make you think why you would think that. Money Man knows the day he does not approach trading with humility, will be the day he regrets. Big predictions are normally related to “hot inpatient money” that homerun (not necessarily big) traders make on markets with this money they calculated would be fine to lose. This is fine for them, if they calculated their risks reasonably, but lethal to inexperienced traders who might not have. These big predictions have potential great rewards at great risk and only come to pay on big moves. Reasonably, these big moves happen when there are fundamental shifts. The two major recent fundamental shifts in BTC have been the opening of futures and then the virus. Major fundamental happenings are thus things like addition or manor change in tradability (the start of shorting, legislation, closure of exchanges, etc), macroeconomics (recessions, lock downs, trade restrictions, etc) and integrity issues (like Satoshi’s stash, his identity, major 3rd party hacks – Mt Gox, etc). Please comment below if you can think of more.
The market is a collective of traders causing a current price. A quick note to illustrate how big the thinking is behind this: The price is derived from a seemingly ‘invisible hand’ according to Adam Smith and Bastiat, before him. Max Planck, the Quantum Theory guy, said that he wanted to study economics, but it was too complex a subject for him. These guys are giants of thought. Irrelevant? A recent big idea is that of the Hive Mind. We have all heard of the six degrees of separation and that, to me, makes this something to think about when trying to explain market moves. I listened to a respected crypto guy asking: why is it that major events seem to coincide with decision points on the chart? Is the market anticipating the event or is the event motivated by the market? The crypto analyst is a nice guy, but I reason that this is a chicken or the egg argument: we have chickens after all (a fact like a chicken). Looking at the chart tells us that BTC always seem to look for the decision points and then move with intent from there to the next one. Most times, the next decision area is not all that far away (Hive Mind related), but then we have a few black swan events thrown in.
Looking at great non-trader achievers around us today, and their pearls of wisdom, and thinking about trading lessons learned at the same time, makes it obvious that trading is such a great educator about life, that it would be a loss to everybody if a beginner trader would have to quit trading because of taking on uncalculated risk and blowing up their account. To me, trading is not a zero-sum game where I win if you lose. Trading is multifaceted and I plan to make a case for this in the future and thus why I am humbly sharing what I have learned.
Conclusion: A good trading strategy to start with would allow for using the ‘Hive Mind moves’, but prevent a sudden Black Swan move from undoing all the profits and more – allowing new traders to stick around for long enough to get to grips with what is cooking. So, what I am alluding to is to always have your current position in perspective, (combine the 2 ed posts related to this added below with a sound strategy). Very important to me: Please leave a like if you appreciate the effort, please comment to develop this further, Please follow if you might like to know about where this leads.
PS Have a look, with a trader’s mindset, at Hive Mind if you are that way inclined (six neighbours to starlings, headbutting bees and cannibalistic locusts – great stuff). Warning: this post is not alluding to hive mind interconnected black box trading, sociological arguments, intelligence warfare, political manipulation, or The Borg. This was to tie two trading discipline edu posts together with a market psychology strategy.
After years of observing trading charts or prices it's also still a sort of mystery for me: sometimes one would spot a pattern like a handbook, and then no one sees a reason for such a pattern to unfold that way. And then "bang" something happens or comes to the public awareness, which confirms the pattern, or reassures the already confirmed price action, trend, etc. It may be just a coincidence, but it's as if prices have some sort of predictive value. For instance, if a significant breakout occurs from a long term consolidation pattern, or well established pattern, then there must be something one does not know yet, or a catalyst event might just show up and "provide" the reasons everyone were looking for.
So I think it's interesting your idea of the "Hive Mind". If I get it correctly, you're stating that most likely people, the market participants, wait for a price move into the "decision area" marked as grey in your charts, at which point a catalyst event might just show up and give impulse to the move in the given direction of the targets? If so, which is the difference between targets 1 and 2: the "decision point" is for both, or does "target 2" requires another decision?
Rule72
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@idz, I was looking for the words and came up with: astute observation. I think about what price and volume is doing in between decision boxes where less trading is done. Yes, decision boxes are where I foresee liquidity to force a catalyst event and even cause a fake out which have some characteristics in itself. Targets are where I foresee the next decisions to be made and allow for time to dictate if they are important or not, if they will only be a pause before continuation, etc. The way we move into a decision box, time, volume, etc makes these boxes change and that makes me adjust these boxes regularly, so they are not set in stone. I am also not trying to portray that the perimeters of the boxes are absolute and that relates to this specific edu post above.
A main idea behind the forecasts is not to tell others how to trade but provide consistency in analysis. When I started trading, I found all the trading rules confusing and sometimes clashing. Little things like to consider wicks or not, etc had me spinning and not getting anywhere. I looked at the forecasts of others and most of them made sense, even though they clashed. Then I realized that you could do the “right thing” trading and still be “wrong”. Another great lesson was to have price come to me where I have a plan. So, I decided to simplify things through being as consistent with my analysis as possible yet being flexible enough to be Bayesian.
So, what I am doing is simplify while adjusting and so give others my analysis as it develops consistently. If a trader looks at my forecasts, the goal is for them to then see consistencies and probabilities and develop their own trading without spinning for a long time. Not what and where I am trading, but how I am seeing things develop and the decision points around it. I hope my ideas came across. Please ask questions as that helps me be clearer in the future. There is a big idea behind all this and I suggest you consider following, even if you have been trading for a long time, to keep an eye on where this is going. Many thanks for your great comment.
@idz, Just to add for those who would not want to read all the above, idz was right, those boxes are not random and take more to draw than drawing Money Man.
UnknownUnicorn100937
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@Rule72, It would be interesting, if you have not already done so, applying your criteria to identify the critical decision areas to to longer time frames and studying how they relate to each other. Say, decision box in the monthly was reached and we're on the way to target 1 on the monthly. This will likely affect decision boxes in the weekly and potential targets in it, as well as on the daily, the 4h and so on. I mean, critical decision areas of the weekly and daily time frames will have a higher probability of being hit in the direction of the monthly move which was already triggered (even though) not necessarily always the case, and will likewise affect the targets as well. Best regards.
Rule72
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This is where these comments sections' value becomes apparent. Many thanks again.