George Soros said "Most of the time we are punished if we go against the trend. Only at inflection points are we rewarded."
Even if we go with the overall trend on a pullback, we are going against the short term trend, and this is very punishing if done mindlessly.
Cruel game, I have to be patient all the time, wait months, and then I might have just a few hours to get my entry. I want certain price areas, a pullback in a trend after something specific happened, but I got hurt too much placing limit orders and forgetting about them. Only thing that works for me is when I get the price I want, keep my eyes on the forex pair I'm interested in. Like a spider. Doing nothing just standing there. But ready to bounce very quickly.
You go against the herd, you get trampled. What's the wall street saying? "Don't catch falling knives" right? I don't know who first said that.
Buying the dip does not mean chasing falling knives. 2018 Bitcoin "investors" wish they knew that. Some people argue, love to go for these "dirt cheap prices", good for them. My mind must be limited. As far as I am concerned investors that care about their risk reward have no business gambling on where the price will bottom. Never heard of anyone that could call falling knives bottom. If someone could do that they'd become a billionaire very soon, trillionaire even, and we would hear about it.
I'm just going to drop some examples. I look at charts I see lots of dips bottoming before trend continuation or reversal, and little bloodbaths suddenly changing direction with no warning, and these V shape reversals look so random to me I see no way to predict where they happen (but I'm sure many retail day gamblers would disagree).
Even with stocks I think...
GBPUSD a few examples
As far as I know even Bitcoin does not "just reverse"
How about Bitcoin most violent (and quick) bear markets?
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I have a couple of examples to share. A spark of proof of why we shouldn't chase these "knifes" - or at least use stops (but not really, slippage + 50 points spreads ruins all the fun).
Nice post. I particularly like the shit emojis. Some people should really learn from this and stop making FOMO entries especially in crypto
horkup
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Hey I’ve spent the last 2 1/2 years learning the falling knives strategy in crypto, I’m in groups that also apply this strategy and FYI: it’s a thing. There’s even apps like Altrady that specialize in charting it, hodloo alerts website which was an algo coded by a forex bot dev, and of course the legend, Quickfingers Luc who posted countless free youtube videos on the subject. There’s even free indicators here in TradingView for this if you search QFL or QFT. The trick you’re missing that Quickfingers Luc points out is you have to layer your buy limit orders exponentially like a fishing net, then wait for a panic drop that crosses below those V shapes (buyer reactions). Then you cast your buy limit orders which are only a small amount of your portfolio. And magically, price retraces towards prior support and you let go of your initial investment, keeping your profits in and selling them later once they’ve sky rocketed. I can tell by these charts you want to understand it, and five minutes watching Luc’s videos will make you see the “magic eye” your charts are showing you right in your face. I’m thinking “lol does he not see these awesome trades on his charts?”
fomo_sapien
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This is TradingView IDEAS, not TradingView Mindless Rants
Smart-Luck
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It all depends though. Remove the stops, remove any form of leverage and add a little patience and you're most likely a winner by now.
Vercingetorix01
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Without going on and on in a very long comment, I'm not convinced. The examples are highly selective and not exactly detailed in a way that actually makes a compelling argument because it assumes that we are just quite clueless beyond looking directly at price action on specific timeframes. I have many issues with many of these charts, but this is the biggest one. Even the most basic indication that could be considered in these examples, volume, let alone any systematic form of technical analysis is excluded. Sure, trade with the trend, or don't, whatever makes you money.
MrRenev
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@Vercingetorix01, Some of the examples are cherry picked to show how bad things can get, and some examples are random and show a dozen or more pullbacks that just end where they want versus double bottoms where the bottom n°2 stops very close to n°1 price.
crowntrade
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@Vercingetorix01 Exactly! Thank You. This guy leaves out any Volume analysis to find support and could understand where these falling knifes will drop in Crypto/Bitcoin.
Craig-in-Naples
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I'm fairly sure he posted this to remind me of my 100 BTC short in 2018.
cutlossking
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You put a lot of time and examples into this post for what purpose? I see that you took plenty of words to get out yur angst against day traders and tick tok traders, but i am yet to come across a day trader who uses a daily time frame (granularity) to day trade! If i had to summarize what you posted it would be uses stops and cut losses even if going with the trend or wait until it has retrended but again all of this has waht is deemed HINDSIGHT BIAS. that is the problem with all charts it is all hindsight and therefore looks easy. Much like everything else in life. once you know the answer it all just seems to look easy historically.
My wife is late from work 4 days a week and i do not know why? after looking into construction in the area on the 4th day i now understand why she is late. What if you redid this with the same charts but went counter trend? does it look any better to you?
nice daily charts but again I am not sure what the overall point is that you are trying to drive home to viewers.
but thanks it does show me that the market is a volatile risky place