understand the CRYPTO market from the 10% view ditch retail PT 1
here we have the total crypto market cap chart at first glance many will just see a "pull back or simply an engulfing. first thing retail will draw is try to call a random bottom without any price action to follow only hope or for the slightly advanced they will try to find some fib and use a random high to open. WRONG WRONG WRONG
looking at the rules from the chart the number one thing is that higher tf prices must and always come exactly or under an open this is law u can look on any time frame and draw a simple line from a wick and it will match up exactly or very close to a previous open balance of the given trend ! why is this ? because large funds or "they" must always pair orders. it is key to understand that large funds banks, prop firms, are naturally net long so the only way the can get in and out and keep good returns is by selling when retail buys, and buys with retail sells. and like mentioned before these buys or sells coming at a previous open. reason being " they are re-entering their original position to finish a move. or in a "pull back" scenario they are booking profits meaning that they are closing large orders automatically taking the other side of retail positions causing a dip in the market. this how wicks are formed
WICKS ARE NOT A REJECTIN OF PRICE! this will be explained shortly
lets think about the facts of the market and the conundrum retail logic has:
fact:1 90% OF RETAIL TRADERS LOSE MONEY
fact2: 80% of free content and 70% of courses are just teaching you the same recycled garbage "support & resistance " "supply & demand"(s&d zones is literally s&r with lipstick) harmonics, elliot wave, fibs, CANDLE STICK PATTERNS, TREND LINES or worst of all the "break out trader"
Now working off of these key 2 facts lets paint a picture of a world where 10% win and 90% lose
first let me preface this by saying that yes all of these pattern can be found on the chart but all of these patterns have one flaw they always leave a gap in understanding how price is delivered, and leaves traders to take mid probability guesses at the end of the day. this is not to say that money is not made off these concepts im simply pointing out the error in this approach to a market so lets dive in.
if 90% traders lose money and 70-80% of trading content are these retail concepts, then it is safe to assume that all traders are fundamentally trading the same patterns and if large a majority are trading the same patterns shouldn't that mean a larger percentage of traders make money? yes indeed but this is not the case for a number of reasons
REASON#1: these patterns are too simple and easy to trade any body can draw magical support and resistance lines. do you really think large fund traders are opening their charts and finding 3 wicks marking a line saying this is support and resistance ? i think not if trading was that simple and easy everyone would make money but once again we know this is not true.
REASON#2: these pattern dont give a real understanding of the market or how would large funds enter exit or book profits. at best s&R /s&D just gives you areas of accumulation, and cant tell you when price should move or even gives signs of price getting ready to move instead the trader is stuck on the side waiting for a "rejection" at a magical line they drew on there charts. how can you understand price from this logic. then for the times traders enter off of a "rejection" and lose that given trade their best reason behind why is that the s/r area just failed or "broke out" in the opposite direction. this lack of understanding/wishful thinking leaves traders to believe that the markets are random and price has no set rules. when this is simply not true. if price was random what will keep it from falling to zero or shooting to the sky at any given moment. there is always rules, structure , and control in every market.
REASON#3 : you cant gather accurate data based on a random outcome if i was to ask any trader what is the probability of there given support line OR the probability of a given candle stick pattern such as the a bull/ bear flag they couldnt answer this question. this a major issue without accurate info for your case study you cant improve on your strategy. you cant find high probability set ups. then we all know what happens after s/r isnt good enough because their lack of understanding ... INDIDCATORS
REASON #4: all retail logic is subjective with no hard set rules of how price should move or high probability outcomes of what price is expected to do
REASON #5 INDICATORS ARE LAGGING: most to all indicators are lagging indicators meaning they only print a result or show "divergence" after price has showed its hand so while retail has 10 different indicators because there logic doesnt help them predict the market or understand price action. they use lagging indicators that FOLLOWS AND PRINTS AFTER PRICE. how ironic is this , most people think that crypto is too volatile and random and you need indicators to help make decision or where price is headed this is simply false if you can see the set up in real time you will get the alert before any indicator. not to mentions 9/10 the traders given indicators doesnt always give the same signal. so what do you do when you have an price at support, macd alerting a sell, an evening star formed (BULLISH PATTERN) and a rsi saying overbought? see how this can be confusing and leave you with no clue what to do. even then what happens when price is showing you bullish behavior while all of your indicators are flashing sell, and you end up taking a sell to lose the trade because you believed in the holy grail indicator set up.
By now you should be able to see the huge problem with this approach to the market. so now lets explore my "theory" or approach to the market and see if i can correct all these problems WITH NO CONTRADICTIONS
1. the market is not random at all
if the market was random there would be no way to profit on a mechanical level
2. the market is a living creature.
3 just like humans the market has habits and rules it must follow to live
4. there is always somebody in control & THEYRE TOO BIG TO HIDE THEIR FOOT STEPS!
lets dig deeper before we start lets remember the natural law of polarity. if one thing is true then in turn the opposite must be true. simple if then statements should equate to one statement of truth with no contradictions. like mentioned previously there is no way a market can be random how in the world would hedge fund be able to offer a set rate of return in a random market. who would put such large sums of money in a casino like environment. with this understanding there should be key things or signs to give us a high probability in which way the market would move, and their is exactly that. (we will get to this in part two) So if the markets are not random then we should be able to see signs or repeatable patterns. this we know is true ie candle stick patterns. expanding on this belief this must also mean the market has habits just like any other living creature these habits easily identifiable once we look for them. next the market must follows rules to live this idea is backing of the thesis that markets are not random, in order for anything to survive it must have some type of discipline. Lastly their is always somebody in control and "they" are way to large to hide their footsteps. where is the proof for this??
ex#1 if you open any chart of your choosing on any time you and mark all wicks you will quickly realize that all wicks are exactly or very close to an previous open on that tf. this is most easily seen on higher timeframes (pt2 will show many examples) as stated in the beginning the reason behind this occurrence is that the people or algo thats moving price loves to get back in at previous opens of large moves or opens right before the " break out". if you take the time to go on your charts you will see its always been there. this is true for reversals as well but that wont be covered on this post for now im laying down the foundation. another reason for price to come back to previous opens is that this is the easiest way to pair orders and 9/10 at these key open levels retail will have limit orders making it easy for "them" to get out/ book profit.
ex#2 if you take a look you will see that crypto always move during london session with the low almost always coming in within 3:am then a pull back / reversal at 5:am to continue into ny open at 7/8 am if you open any chart you can clearly see the low or high of the day being set around 3 then some type pf pullback/ reversal to continue with original move at 7/8 am with the high/ low of 7/8 am NY SESION staying in tact for the rest of the day. also if the pull back didnt happen by 8 most likely at 9:00 am it will occur. now the reason is due to the natural way funds flow in any market london is the most liquid session so traders are able to move price then from 8-11 am is an overlap, which will give a reason for price to pull back/ reverse allowing ny traders to enter and also catch the move of the day. from there the next key time is 8:00 pm. you will notice price always does a fake out or run up in the opposite direction during these times. why ? to entice retail to think they are missing a move fomo in only profit for a little bit then loose it all at london open/ session . its key to note that if price is moving in the opposite way of the trend around 8/9 pm that is a sign of time divergence (will cover clearly in pt 2) , and also a continuation sign. the reason its a sign of time divergence is because large position traders are not in the market most traders around this time are not on their chart to move the market. large funds dont trade 24/7 dont be fooled by this move its just a trap and a easy way for "them" to entice you to take the opposite of "their" trades. to finish this point its a sign of continuation also for the simple fact that if price ran in the given trend all day there wouldnt be much room to take positions at good prices and price will leave the "market movers" which we know cant happen. with these two examples we can see 1 the predictability of the markets leaving randomness out, we can see the market happens, we can see how the markets rest just like any other creature, and lastly see how "they" control and leave footprints on the chart without most people even seeing it.
now i will like to explain what are wicks in relativity to how they are formed and also fits into this understanding. wicks are not REJECTIONS thats retail ignorance. going back to the fact that 90% lose money this must also mean that 10% of the winners HAVE 90% OF THE MONEY IN THE MARKET. this must be true if this doesnt make sense or you cant grasp this ask yourself if 90% of people loose money where is these funds going ? TO THE 10% very simple concept and if not the 10 % who else could possibly have the money ?? exactly ! so if the 10% have 90% of the money how cold price get "rejected" if there is no opposing force to reject price. do you really think that out of that small 10% of winners they would fight for price and reject each others orders when its alot easier to work together or take to the same trade ideas and take the larger percentage of traders money.
also remember for this rejection to happen this must mean an entity buying or selling at the wick (at price forming the wick in real time) and we know retail cant move price. i hope this is starting to make sense. this another reason why retail concepts doesnt work.
instead a wick is simply accumulations at premium prices and profit booking. picture this the 10 % opens a position at premium price in the form of a wick priofits 5,10 even 15% profit with a large position size at some point they want to book profits. so what happens they close orders at previous open of a move where there is liquidity resting, and when this happens their large positions automatically goes against the trend simply being because the size of their orders moves prices. so now if most or all of the 10% does this at the same time or close to the same time what will we see on a chart? a wick or even a huge wick, which retail will think its a rejection, some break out traders enter, some traders panic and close making it even easier for them to exit and cause more pressure in the wick formation. i hope you can start to see the real beauty of this market and understand how prices really moves. this is the foundation of my approach to the market i will probably do a 7 part series showing live examples previous examples and go in great detail to further prove my point
BACK to the charts if you look u can see a classic jefe bear pattern that just formed( will explain this pattern next lesson ) and the 3d/ and 1w open has not yet been reached showing signs of further downward movement REMEMBER ALL OPENS MUST GET HIT ALL ORDERS ,MUST BE PAIRED
now once the 3d open has been hit we can look for sign of reversal until the bears are in control
key take aways 3d open still not hit and 1d open are still not hit with 1w jefe playing out meaning market will follow 1w strucutre untill a open is met
WHATEVER TIMEFRAME U FIND OPENS BEING HIT OR ORDERS BEING PAIRED THEN 80-90% OF THE TIME THEY WILL TARGET OPEN BALANCES ON THAT TIME FRAME do dont get faked out by a wick and by now you should know how wicks work
IF you enjoyed this post make sure to like comment share amd follow for more updates . FOLLOW ME ON TWITTER @YEKUNA1
looking at the rules from the chart the number one thing is that higher tf prices must and always come exactly or under an open this is law u can look on any time frame and draw a simple line from a wick and it will match up exactly or very close to a previous open balance of the given trend ! why is this ? because large funds or "they" must always pair orders. it is key to understand that large funds banks, prop firms, are naturally net long so the only way the can get in and out and keep good returns is by selling when retail buys, and buys with retail sells. and like mentioned before these buys or sells coming at a previous open. reason being " they are re-entering their original position to finish a move. or in a "pull back" scenario they are booking profits meaning that they are closing large orders automatically taking the other side of retail positions causing a dip in the market. this how wicks are formed
WICKS ARE NOT A REJECTIN OF PRICE! this will be explained shortly
lets think about the facts of the market and the conundrum retail logic has:
fact:1 90% OF RETAIL TRADERS LOSE MONEY
fact2: 80% of free content and 70% of courses are just teaching you the same recycled garbage "support & resistance " "supply & demand"(s&d zones is literally s&r with lipstick) harmonics, elliot wave, fibs, CANDLE STICK PATTERNS, TREND LINES or worst of all the "break out trader"
Now working off of these key 2 facts lets paint a picture of a world where 10% win and 90% lose
first let me preface this by saying that yes all of these pattern can be found on the chart but all of these patterns have one flaw they always leave a gap in understanding how price is delivered, and leaves traders to take mid probability guesses at the end of the day. this is not to say that money is not made off these concepts im simply pointing out the error in this approach to a market so lets dive in.
if 90% traders lose money and 70-80% of trading content are these retail concepts, then it is safe to assume that all traders are fundamentally trading the same patterns and if large a majority are trading the same patterns shouldn't that mean a larger percentage of traders make money? yes indeed but this is not the case for a number of reasons
REASON#1: these patterns are too simple and easy to trade any body can draw magical support and resistance lines. do you really think large fund traders are opening their charts and finding 3 wicks marking a line saying this is support and resistance ? i think not if trading was that simple and easy everyone would make money but once again we know this is not true.
REASON#2: these pattern dont give a real understanding of the market or how would large funds enter exit or book profits. at best s&R /s&D just gives you areas of accumulation, and cant tell you when price should move or even gives signs of price getting ready to move instead the trader is stuck on the side waiting for a "rejection" at a magical line they drew on there charts. how can you understand price from this logic. then for the times traders enter off of a "rejection" and lose that given trade their best reason behind why is that the s/r area just failed or "broke out" in the opposite direction. this lack of understanding/wishful thinking leaves traders to believe that the markets are random and price has no set rules. when this is simply not true. if price was random what will keep it from falling to zero or shooting to the sky at any given moment. there is always rules, structure , and control in every market.
REASON#3 : you cant gather accurate data based on a random outcome if i was to ask any trader what is the probability of there given support line OR the probability of a given candle stick pattern such as the a bull/ bear flag they couldnt answer this question. this a major issue without accurate info for your case study you cant improve on your strategy. you cant find high probability set ups. then we all know what happens after s/r isnt good enough because their lack of understanding ... INDIDCATORS
REASON #4: all retail logic is subjective with no hard set rules of how price should move or high probability outcomes of what price is expected to do
REASON #5 INDICATORS ARE LAGGING: most to all indicators are lagging indicators meaning they only print a result or show "divergence" after price has showed its hand so while retail has 10 different indicators because there logic doesnt help them predict the market or understand price action. they use lagging indicators that FOLLOWS AND PRINTS AFTER PRICE. how ironic is this , most people think that crypto is too volatile and random and you need indicators to help make decision or where price is headed this is simply false if you can see the set up in real time you will get the alert before any indicator. not to mentions 9/10 the traders given indicators doesnt always give the same signal. so what do you do when you have an price at support, macd alerting a sell, an evening star formed (BULLISH PATTERN) and a rsi saying overbought? see how this can be confusing and leave you with no clue what to do. even then what happens when price is showing you bullish behavior while all of your indicators are flashing sell, and you end up taking a sell to lose the trade because you believed in the holy grail indicator set up.
By now you should be able to see the huge problem with this approach to the market. so now lets explore my "theory" or approach to the market and see if i can correct all these problems WITH NO CONTRADICTIONS
1. the market is not random at all
if the market was random there would be no way to profit on a mechanical level
2. the market is a living creature.
3 just like humans the market has habits and rules it must follow to live
4. there is always somebody in control & THEYRE TOO BIG TO HIDE THEIR FOOT STEPS!
lets dig deeper before we start lets remember the natural law of polarity. if one thing is true then in turn the opposite must be true. simple if then statements should equate to one statement of truth with no contradictions. like mentioned previously there is no way a market can be random how in the world would hedge fund be able to offer a set rate of return in a random market. who would put such large sums of money in a casino like environment. with this understanding there should be key things or signs to give us a high probability in which way the market would move, and their is exactly that. (we will get to this in part two) So if the markets are not random then we should be able to see signs or repeatable patterns. this we know is true ie candle stick patterns. expanding on this belief this must also mean the market has habits just like any other living creature these habits easily identifiable once we look for them. next the market must follows rules to live this idea is backing of the thesis that markets are not random, in order for anything to survive it must have some type of discipline. Lastly their is always somebody in control and "they" are way to large to hide their footsteps. where is the proof for this??
ex#1 if you open any chart of your choosing on any time you and mark all wicks you will quickly realize that all wicks are exactly or very close to an previous open on that tf. this is most easily seen on higher timeframes (pt2 will show many examples) as stated in the beginning the reason behind this occurrence is that the people or algo thats moving price loves to get back in at previous opens of large moves or opens right before the " break out". if you take the time to go on your charts you will see its always been there. this is true for reversals as well but that wont be covered on this post for now im laying down the foundation. another reason for price to come back to previous opens is that this is the easiest way to pair orders and 9/10 at these key open levels retail will have limit orders making it easy for "them" to get out/ book profit.
ex#2 if you take a look you will see that crypto always move during london session with the low almost always coming in within 3:am then a pull back / reversal at 5:am to continue into ny open at 7/8 am if you open any chart you can clearly see the low or high of the day being set around 3 then some type pf pullback/ reversal to continue with original move at 7/8 am with the high/ low of 7/8 am NY SESION staying in tact for the rest of the day. also if the pull back didnt happen by 8 most likely at 9:00 am it will occur. now the reason is due to the natural way funds flow in any market london is the most liquid session so traders are able to move price then from 8-11 am is an overlap, which will give a reason for price to pull back/ reverse allowing ny traders to enter and also catch the move of the day. from there the next key time is 8:00 pm. you will notice price always does a fake out or run up in the opposite direction during these times. why ? to entice retail to think they are missing a move fomo in only profit for a little bit then loose it all at london open/ session . its key to note that if price is moving in the opposite way of the trend around 8/9 pm that is a sign of time divergence (will cover clearly in pt 2) , and also a continuation sign. the reason its a sign of time divergence is because large position traders are not in the market most traders around this time are not on their chart to move the market. large funds dont trade 24/7 dont be fooled by this move its just a trap and a easy way for "them" to entice you to take the opposite of "their" trades. to finish this point its a sign of continuation also for the simple fact that if price ran in the given trend all day there wouldnt be much room to take positions at good prices and price will leave the "market movers" which we know cant happen. with these two examples we can see 1 the predictability of the markets leaving randomness out, we can see the market happens, we can see how the markets rest just like any other creature, and lastly see how "they" control and leave footprints on the chart without most people even seeing it.
now i will like to explain what are wicks in relativity to how they are formed and also fits into this understanding. wicks are not REJECTIONS thats retail ignorance. going back to the fact that 90% lose money this must also mean that 10% of the winners HAVE 90% OF THE MONEY IN THE MARKET. this must be true if this doesnt make sense or you cant grasp this ask yourself if 90% of people loose money where is these funds going ? TO THE 10% very simple concept and if not the 10 % who else could possibly have the money ?? exactly ! so if the 10% have 90% of the money how cold price get "rejected" if there is no opposing force to reject price. do you really think that out of that small 10% of winners they would fight for price and reject each others orders when its alot easier to work together or take to the same trade ideas and take the larger percentage of traders money.
also remember for this rejection to happen this must mean an entity buying or selling at the wick (at price forming the wick in real time) and we know retail cant move price. i hope this is starting to make sense. this another reason why retail concepts doesnt work.
instead a wick is simply accumulations at premium prices and profit booking. picture this the 10 % opens a position at premium price in the form of a wick priofits 5,10 even 15% profit with a large position size at some point they want to book profits. so what happens they close orders at previous open of a move where there is liquidity resting, and when this happens their large positions automatically goes against the trend simply being because the size of their orders moves prices. so now if most or all of the 10% does this at the same time or close to the same time what will we see on a chart? a wick or even a huge wick, which retail will think its a rejection, some break out traders enter, some traders panic and close making it even easier for them to exit and cause more pressure in the wick formation. i hope you can start to see the real beauty of this market and understand how prices really moves. this is the foundation of my approach to the market i will probably do a 7 part series showing live examples previous examples and go in great detail to further prove my point
BACK to the charts if you look u can see a classic jefe bear pattern that just formed( will explain this pattern next lesson ) and the 3d/ and 1w open has not yet been reached showing signs of further downward movement REMEMBER ALL OPENS MUST GET HIT ALL ORDERS ,MUST BE PAIRED
now once the 3d open has been hit we can look for sign of reversal until the bears are in control
key take aways 3d open still not hit and 1d open are still not hit with 1w jefe playing out meaning market will follow 1w strucutre untill a open is met
WHATEVER TIMEFRAME U FIND OPENS BEING HIT OR ORDERS BEING PAIRED THEN 80-90% OF THE TIME THEY WILL TARGET OPEN BALANCES ON THAT TIME FRAME do dont get faked out by a wick and by now you should know how wicks work
IF you enjoyed this post make sure to like comment share amd follow for more updates . FOLLOW ME ON TWITTER @YEKUNA1