The previous trend signal has a very target for the coming 8 months, and there's a possibility of getting a new signal, from a lower starting point. This is indeed, very , and is confirmed by rgmov (not shown here) retracing but not forming a new 44 bar high (we recently had a new 44 bar low).
The Litecoin/Dollar chart is , we have an overbought rally which was clearly rejected, and price sliding down from all support levels, with weekly bars expanding range down. It'd take a miracle to revive Litecoin at this point, and it seems to be eaten alive by the mining supply.
This doesn't discount the possibility of an artificial rally to emerge from lower support levels, or from here but it would take a strong push above this month's high and above both 8 month levels.
It'd be a stretch to have any kind of bias for Litecoin, so, abandon ship, or look to go short if we hit the range expansion level this month, at 0.01079.
Time at Mode FX
The slow death of LTCBTC.
If the blue box fails as support, ltc will continue to fall.
Next you say and I quote; "the Litecoin dollar chart is bearish". To be honest it actually isn't "yet" and I am in no ltc position but saying that it's still within it's upward slopping trendline noted in the red line on the chart posted below plus it's still holding it's median pitchfork trendline support the next support comes in at or around 19cny and most lower time frames have bullish divergence. In my opinion if and when 19cny goes then it's time to really put on the bear skin hat.
There is a bearish engulfing on the daily which engulfs the prior 3 candles which is not good, there is macd which is starting to cross over on the daily which is not good however price hasn't exactly broken it's 200d ma and it's been nothing but higher highs and higher lows from starting from September 4th 2015 and even with this last move down price hasn't made any new significant low.
I don't think the issue with ltc is the miners, what normally happens is that a lot of ltc holders get impatient, nervous or jealous and do what most people would do when they see another crypto moving, ditch the dead weight and just when you least expect it ltc pumps.
I'm not bullish or bearish on ltc but I am watching it because "if" Bitcoin continues higher say beyond 300 then ltc wil like it always has see a significant move as well, it's just a matter of time. However "if" Bitcoin continues lower then yeah not much of any chance for ltc.
thanks for the comments. the methodology that I use gives me this view. while yours creates a different perspective. what this chart implies is that although litecoin might rally with Bitcoin like it normally does, it would appear as if the Bitcoin value won't climb.
keep in kind that we trade belief systems. mine are valid for me but might conflict with yours.
this isn't a problem since a market is made of both builds and bears. it's good to discuss ideas here though since from the exchange of ideas we can all grow and maybe take a look at things from a different angle than we normally would.
yours is a cny chart and also 4h.
my view is that btccny will rally with much higher probability than btcusd. haven't studied ltccny yet.
do you think it's possible for both USD and CNY pairs to detach?
my analysis implies this.
Essentially what successful trading is about is asking yourself what's possible, how probable is each probability and then asking yourself what it's going to cost you to find out. What this essentially means is managing not forecasting your trades i.e risk/reward.
When I see a chart with an 8 month forecast I can't help but notice it's built on biases and assumptions and the reason I say that is because anything can happen, every moment is unique and there is a random distribution of winnings and losses in any set of variables that define a trade. The issue is that our minds are wired to identify what is happening right now with something from our memory but you see the thing is "every moment is unique" it's our minds that have a propensity to associate. In other words it's impossible to be a fortune teller in the financial markets therefore you'll make more money through management than from predictions.
There is a clear detachment between what price action in China/CNY is doing and what the USD markets are doing. Clearly the CNY market is more Bullish than it's USD counterpart but if you remember MtGox when the spread between that exchange and the other Bitcoin markets got out of hand essentially the other exchanges refused to follow. I don't want to come up with wild off the cuff speculation about what China is up to but consider these thoughts.
There will be a certain percentage of traders looking to take advantage of the current spread via arbitrage which will pull some liquidity out of the USD exchanges this may have some effect on how far price can push up on the USD markets.
The current USD swaps on Bitfinex "Average Rate on active USD Margin Funding (=FRR) / Total sum of active USD Margin Funding" which can be found here; https://bfxdata.com/swaphistory/usd shows that active USD swaps haven't been this low since March 2015 so Swaps are decreasing not going up which means that a lot of this rally was most likely bought on cash which is good because it shows interest however you have to ask yourself how many more people will or are there left to continue to buy on all cash to keep this going? Basically there is a lot of available liquidity for traders to take but essentially nobody wants it as swaps are diving.
One thing to remember is that when the last big drop happened from about 258.50 on BFX that leg alone margin called over 3 Million USD worth of active USD swaps which took out a sizable chuck of market participants. Lastly there is the orderbook showing 27k btc worth of orders to 200 most of which reside in the 220's so clearly there on the side not buying this up. What I'm getting at with all of this is essentially although China is Bullish it needs to be seen if the USD exchanges have enough market participants to keep up with China and if not will we see a major decoupling as we did with Mtgox. I'm not saying that the Chinese exchanges are running a scam or going bankrupt what I'm simply saying is that what the current fundamentals show is that swaps are tanking money is on the side to buy lower money is most likely taking advantage of arbitrage and a lot of people were taken out of the market on the last margin call so how much more does this rally have?
Going back to ltc I think it's essentially stuck in the middle and it's future will be determined on what happens next with btc, but again I'm not making any predictions here I simply trade the changing conditions of the chart.
It's perfectly fine, don't take it as an offense, we all live through our own filters, and trading is no different. Whenever our belief system changes, we experience the so called paradigm shift, the sudden change of mind, that is very strong and makes go 'Eureka!' or at least take a pause to acknowledge the impact of the event.
"Essentially what successful trading is about is asking yourself what's possible, how probable is each probability and then asking yourself what it's going to cost you to find out. What this essentially means is managing not forecasting your trades i.e risk/reward.
When I see a chart with an 8 month forecast I can't help but notice it's built on biases and assumptions and the reason I say that is because anything can happen, every moment is unique and there is a random distribution of winnings and losses in any set of variables that define a trade. The issue is that our minds are wired to identify what is happening right now with something from our memory but you see the thing is "every moment is unique" it's our minds that have a propensity to associate. In other words it's impossible to be a fortune teller in the financial markets therefore you'll make more money through management than from predictions. "
I do believe I can predict price action based on a series of if-then-else procedures, which is how I understand technical analysis. I also know that some market conditions favor predictions and trend trades, while others favor letting the market prove it took one of the possible paths first, even if it has signaled a potential trend trade. In asessing the market types, lies the true strength of the systematic approach I use.
For instance, in BTCUSD; we have been in a more volatile and trendless enviroment with a very slow decline from the all time high.
If trying to predict using trend trades, most of the time, you'd be waiting for higher targets, but price would normally just meet the baseline projections and then turn around with no follow through. It wasn't a trending, normal bull or bear market type, as Van Tharp calls it.
The liquidity is also important, for example, altcoins, ethereum, monero, they all tend to fall on lack of interest, and technical patterns that might emerge, will most likely end up being simply drift caused by lack of liquidity. Many people will be stubbornly drawing trendlines and other things, but if the volume isn't there, then the technical analysis will do squat. This is part of my belief system. This is how I trade and analyze market action. I also weigh fundamentals, in markets where I can more clearly determine momentum timing with it, like Forex. I have no clue about the Bitcoin fundamentals, unlike you. BTCUSD has sufficient liquidity to let me do some technical analysis, but using trendlines and other more time dependent methods, specially in lower timeframes, I see as a waste of time, because liquidity isn't THAT high. I favor monitoring the daily, when bigger players decide to shake things up. Otherwise, we're in low liquidity drift land, where you'd be good simply fading overbought or oversold advance/declines with whatever technique you favor.
Hope I made myself clear.
Here's a link on Van Tharp's market types and more info on 'trading your belief system'. Finding your own edge is primordial. We can't 100% objectively define one method of technical analysis as superior to any other method. Testing can give good clues, but statistically, all can work to some extent. If you get the right conditions for it to thrive, the market type where they work best.
One more thing, check this archive of forecasting hits, in case you doubt my methodology: http://pastebin.com/UBztSY7V
"One thing to remember is that when the last big drop happened from about 258.50 on BFX that leg alone margin called over 3 Million USD worth of active USD swaps which took out a sizable chuck of market participants. Lastly there is the orderbook showing 27k btc worth of orders to 200 most of which reside in the 220's so clearly there on the side not buying this up. What I'm getting at with all of this is essentially although China is Bullish it needs to be seen if the USD exchanges have enough market participants to keep up with China and if not will we see a major decoupling as we did with Mtgox. I'm not saying that the Chinese exchanges are running a scam or going bankrupt what I'm simply saying is that what the current fundamentals show is that swaps are tanking money is on the side to buy lower money is most likely taking advantage of arbitrage and a lot of people were taken out of the market on the last margin call so how much more does this rally have? "
The market can do anything regardless of what pattern may present itself at any given time and ultimately the outcome can be anything literally. The thing then is not to project your expectations on the market but instead you want your expectations to correspond with the realities of the markets perspective.
What this means in simple translation is that every trade is a random distribution of wins and losses its a mathematical fact that cannot be disputed. If you take a pool of 20 of your trades and do this say ten times and you generate a pool of 200 trades and you look at your losses and wins from each column you will find random distribution. Now what separates the guys making money from the guys who are not boils down to management nothing more nothing less. Proper trade management and proper psychological management are the keys to successful trading not predicting what the market will do.
If what you say is really true and I quote you again here: "I do believe I can predict price action based on a series of if-then-else procedures, which is how I understand technical analysis." Then you should be sitting on a yacht in the Mediterranean having your back rubbed by Russian models.
I don't want to take up loads more time on this thread hashing peoples trading methods so I'll end with this, if you really want to make a lot of money trading and be very successful which I am still in the process of putting the last few pieces of the puzzle together then let me offer you this.
Think in probabilities, approach the market knowing that everything is random. Find an edge, identify your risk, execute a trade and manage the trade. An edge is simply finding a higher probability of one thing happening over another. Discipline will bring consistency.
Thanks for the links I'll read through them.
Yours, is outlined above, that's what I meant.
There is a logic, and a reason for everything, I don't think it's random at all. It is more or less predictable depending on the market conditions, and wether the market is awaiting fundamental information, or it has discounted it already, etc.
It's not only money management, but having a trading system with positive expectancy. Can also be a higher hit rate, with equal risk vs reward. It's math, in that sense.
So, we're saying more or less the same thing, no problem.
Discussion can be enlightening as long as we don't take it personal if someone disagrees or has a different view.
basically i've had better results by following btcmarket's advice which is "finding a higher probability of one thing happening over another":
"Think in probabilities, approach the market knowing that everything is random. Find an edge, identify your risk, execute a trade and manage the trade. An edge is simply finding a higher probability of one thing happening over another. Discipline will bring consistency." doesn't mean just go ahead and start random trades it's about probabilities.. :)
The problem with altcoins is the lack of liquidity, bars will keep rolling out, even if volume is nill, this makes my analysis worthless.
The issue with patterns for me or not the issue depending how you look at it is that they can become a self fulfilling prophecy. If you take something as simple as a trendline and it has say 2 or 3 touches in a lot of people it becomes etched in their minds that the market will respect it and so trade it and the outcome could be that they were all right. The same goes with Elliot Wave analysis if you get enough traders subscribing that we are in a certain wave then it becomes self-fulfilling and it can turn out that we are or rather the market acts as though we are but the problem is that's not always the case.
Interesting examples of this can be seen on Thomas Bulkowski's website of repeated busted patterns and candlestick formations that don't hold up to statistical back-testing. I mean ultimately it boils down to finding an edge that gives you a higher outcome over another so if it's Time At Mode or Elliot Wave or using some Fib strategy then more power to you. It's not so much about being right or wrong as it is being able to take more from the market when you're right than when you're wrong.
The only reason I wanted to start a discussion on this thread was how you described your analysis, to start with you say "It would appear as if the bear market in Litecoin is still valid." then you say "The Litecoin/Dollar chart is bearish", "It'd take a miracle to revive Litecoin at this point" and lastly "This doesn't discount the possibility of an artificial rally to emerge from lower support levels, or from here but it would take a strong push above this month's high and above both 8 month levels. "
The issue I have is that it appears to be a contradiction in that what you're saying is we are going down for 8 months or rather will be bearish but then you turn around and say yeah but we could go up. So how I read that was we are going down but we could go up so I wasn't sure if this was part of time At Mode analysis? It “seemed” as though what you were doing was leaving the door open for future criticism in that you could always turn around later and say yeah but I did say we could also go up. Perhaps I wasn't understanding the perspective of the market from your viewpoint correctly if so my apologies.
With that I was only giving my two cents nothing more but yeah we just see the market from different perspectives and that's ok with me.
I detail the conditions for each potential paradigm shift, or continuation and validation of the initial scenario.
Trading is a constant dynamic process of validation of one's system.
I assume that you subscribe to my methodology, when I type, that's why I make such claims. I don't want to type on each sentence: "If we take for granted that time at mode is a valid analysis methodology and I applied it correctly" then this will happen.
I reccomend reading George Soros' "Alchemy of finance". It deals with this issue you describe, of self fulfilling prophecies vs real impact of the perceived patterns in markets.
Sorry, need to back up my thoughts, hence the links.
You're welcome to step in and comment, no problem whatsoever.
Have you browsed through my charts? Posted the links above, it contains an archive of most of forecasting hits.
As in example and I'm quoting here; let's say a bat and a ball together cost $1.10 the bat costs $1 more than the ball. How much does the ball cost?
Most people incorrectly answer $0.10 when the correct answer is $0.05. An explanation in terms of attribute substitution is that, rather than work out the sum, people parse the sum of $1.10 into a large amount and a small amount, which is easy to do. Whether they feel that is the right answer will depend on whether they check the calculation with their reflective system.
A good read on the subject of biases and self-reinforcing beliefs is from Nobel Prize in Economics winner Daniel Kahneman “Thinking, Fast and Slow”.
I then try to avoid biases which I am still guilty of from time to time as I navigate through putting my trading in a more auto-pilot setting and taking a back seat to price action. I think that and this has only a small portion to do with trading, our projections and expectations are what makes us so unique both a good and bad. Even in relationships that fact we “project-expectations” onto people close to us by way of things like “why did you say that”, “why do you dress like that”, “why can't you be more like” lends to the idea that at any given moment each one of us thinks our reality is self-evident and everyone must be sharing it which couldn't be further from the truth and yet it forms the basis for our projections-expectations.
Expectations, and I'm talking social sciences here are a belief projected into a future moment but if every moment is unique why must we expect anything? The environment can express itself in an infinite number of ways and what each one of us perceives or experiences is a very small relationship with what's available at any given moment. For this reason I'm inclined to forgo forecasting or projections and concentrate solely on price action in my current iteration of trading.
I'll go through your charts tomorrow as I've been catching up on some other reading material.
That's why I subscribe to being as systematic as possible, while maintaining just the right discretionary elements as to avoid applying a lower probability system at any given time and market condition.
I'm on the go, definitely some good material to read and try to improve our trading with.
That being said, this is a ratio chart, if ltc moves up slower than btc, or if it moves down while btc doesn't, or if it moves in opposite direction to BTC, then ltcbtc will appear to go down. See what I mean?
It's a useful indicator, tells me that there is limited interest in the ltcusd rally or ltccny, for now.
I did post a bullish setup in ltcusd, but I think I failed to post it as a public chart. Reposting.
Hoping to see a new ATH for LTC this winter, but as usual it all depends on BTC...
It's good to book partial profits and add to longs to build a position too, but you need a clear way to do it, and trail your stop loss.
I'd reccomend a daily 10 period moving average of the lows for your stop, and keep adding on dips.