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How to Properly Use the Fibonacci Retracement ToolI've recently come across a lot of posts where the fibonacci retracement tool was erroneously used, and this gave me a good idea for an educational post. Introduction: The Fibonacci Sequence - Before talking about fibonacci retracements, it's important to understand what fibonacci sequences are. - Fibonacci sequences are numbers that are equal to the sum of the preceding two numbers, starting with 0 and 1. - So a fibonacci sequence would look like this: 0, 1, 1, 2, 3, 5, 8, 13, 21, and so on. - The fibonacci sequence is also known as nature's code, as these numbers are commonly found among nature as well. The number of petals of flowers is a prime example. The Fibonacci Ratio - The fibonacci ratio is derived by dividing the numbers within the fibonacci sequence - The 0.618 (61.8%) for instance, is approximately the value when we divide 21 by 34, and 55 by 89 - The 0.382 (38.2%) ratio is calculated by dividing a number by another number located two spots to the right. - The 0.236 (23.6%) is calculated by dividing a number by another one three spots to the right. - Just like the fibonacci sequence, fibonacci ratios are commonly found in nature as well, through flowers, galaxy formations, and spirals on shells Fibonacci Retracement - The fibonacci retracement is a tool in which horizontal lines are drawn to help traders identify support and resistance - These horizontal lines are based on the fibonacci ratios - Interestingly enough, just as the fibonacci ratios are commonly found in nature, they are also found in the market, reflected by charts - A fibonacci retracement can be identified by connecting the swing high to the swing low of a downtrend, and the swing low to swing high of an uptrend - The connection between the high and low points are where most traders get confused. Application - On the left hand chart, we can see that the swing high has been connected with the swing low - As a result, we could identify possible resistance levels for Bitcoin's bullrun in 2019. - Prices touched the 0.618 fib resistance level , and eventually attempted to break the 0.5 fib, but failed - We can also see that the 0.382 and 0.786 levels played a key role as support and resistance - On the right hand chart, we can see the swing low connected to the swing high - Based on the fib levels of this retracement, we could identify strong support at the 0.786 level, around $4k. Conclusion The fibonacci retracement tool can be a very effective way to identify areas of support and resistance , but they need to be applied correctly. Don't forget to connect the swing highs and lows based on the trend! If you like this educational post, please make sure to like, and follow for more quality content! If you have any questions or comments, feel free to comment below! :)
BITSTAMP:BTCUSDEducation
by Michael_Wang_Official
43
Bitcoin Dip Buying - Part 0: Coding the IndicatorThis is a prequel video for a series on how to identify and buy liquidation dips in Bitcoin and other cryptocurrencies. Most aspiring traders do not have time to dig into the full process of becoming a successful trader and instead want to skip straight to making millions of dollars so this video is labeled as Part 0; it is optional. This video is for those that want an overview of Tradingview's Pine Script coding so that they may better understand what it takes to build a trading strategy from scratch.
BITFINEX:BTCUSDEducation
by norok
7
Why do you NEED a diaryMy philosophy is based on simplification. I believe that reducing a problem to its fundamental parts helps us to better interact with them, and by being fundamental, our results are maximized. It's like fixing a room. It is no use spreading our attention to details such as the type of lamps while neglecting the underlying problem, which can be a large coat of paint or an unforgivable hole in the ceiling. If habitability could be classified in points, at the same time invested, we will earn many more points by fixing the block earlier than by reflecting on the type of light in the bulbs. Of course everything must be dealt with, but trading has a lot of variables, and most importantly, a lot of emotionality. Investing in the stock market notably activates the limbic part of our brain, and it robs the neocortex of prominence, making it more difficult to identify problems with this emotional blindness. Therefore I think that we must minimize the variables to the most important to maximize our attention in each one of them. But to reduce trading to the fundamentals, the person must first be analyzed to identify the root of their problems. Does the person have adequate knowledge? Perhaps he has good technique in theory but the execution is not good, or his problem lies in the situation of keeping an open operation, something very common, since our survival instinct makes us exit the market at the minimum profit opportunity, without having Keep in mind that this profit must cover the losses we have until the next profit occurs. The reverse is also very common, people who had carried out an analysis and the price has overflowed negatively, but are unable to close the operation because they do not want to accept having lost, and finally the price continues in that direction contrary to their analysis, causing them to lose a lot more money. As much as when going to the doctor, advancing in the trading career requires identifying what individual problems you have and applying the appropriate remedies, that is, working on the weaknesses. For this, it is essential to review the operations at a time and draw conclusions, and for this it is essential to keep a daily trading journal, preferably in a physical notebook, of each day of operation, so that it can be reviewed each end of the trade. week and progressively correct mistakes and enhance what already works for us, to avoid committing them again and spending years going around in circles. I personally use a physical notebook for a lifetime. I do it this way for various reasons, and although in principle it can be argued that it is much more practical to write it on a computer, with the option of uploading it to the cloud and accessing it from anywhere, each person works in a different way, and I, After trying in virtual and physical, I have decided on physical, because it works better for me personally. The reasons I have, again I stress very personal, are the following: - I usually use the computer a lot so I always end up with a desk full of documents, shortcuts, stickers of ideas that come to mind ... keeping a diary requires discipline, and added to the fact that I am quite clueless, if I do not have a notebook There are times when I don't even remember writing it when I open the operations. However, when I have the notebook next to the computer and always in my range of vision, I never forget it. - Writing with a pen requires more time than using a computer. I learned to type and can type at high speed on the keyboard, however writing on the notebook is much slower. This, far from being a disadvantage, I see it as a great advantage, since as I write I have more time to reason it, so it is easier to reach conclusions as it is written and that the result has more value for later analysis. - It is easier for me to add graphic parts to the written part. When I write when I open a trade, I always tend to draw more or less the shape of the price it has at that moment and indicate with an arrow my entry point and stop loss. This could be done on a computer and then added to the text document if it is made virtual, but it seems faster and easier to me to just stop writing and draw it. - Writing in a physical notebook is totally private, they will never be able to sneak a virus into you and steal your information if you write it on paper. As you can see, virtual or online is not always the best for everyone. That said, the way I keep my journal is as follows: - The first thing I do is write the date. - I write the time and the market symbol of the trade I have opened, the why, and then I draw more or less the current price and the stop loss level. - On Sunday I review every week. What I do is start with the first trading day of that week and see what the price really did. I write the newspaper in blue, and the weekly review in red: I draw in red more or less the price movement that happened after the operation. I also write if I was right or wrong. If I was correct, I see if I could have won more and to what extent. If I have failed I analyze why. I finally draw a conclusion, if there is one, and move on to the next day. Sometimes the only conclusion is that simply the price movement has gone against and no sense can be found, so I assume it as an irreparable statistical loss. After the page of the last day of that week, I write the date and a title with "reflections of the week", and I write again all the conclusions that I have drawn each day and then I make a final reflection on those conclusions to see if You may see a pattern of behavior or technical failure that may change for the following week. As you can see, I am very methodical when it comes to my trading, and this has helped me greatly to polish mistakes that I could not have realized if I did not keep a journal. In the day to day of life many things happen that can distract you and sometimes keep you making very absurd mistakes, that if you had reviewed your operation a little, you would have quickly realized. For these reasons I believe that anyone who boasts of having results in this business must realize that it is necessary and make an effort to create this habit.
BITSTAMP:BTCUSDEducation
by jonfuentesX
How Much BTC Do You Need to Create Generational Wealth?Hi Tradingviewers, in this article I am going to break down this question into smaller items and try to give a concrete answer to the question: “How Much BTC Do You Need to Create Generational Wealth?” First, we’ll have to define what ‘wealth’ means. Then we need to define how we look at the ‘generational’ part. Lastly, we also need to take into consideration long term outlooks on Bitcoin. Let’s try and put some actual numbers on this and see how much BTC you would actually need. I’ve been on Twitter a lot lately (putting some more effort into my account!) and got inspired to answer this question as this was a very common topic on Twitter. The interesting thing is that I saw a lot of people talking about this, but nobody actually made an effort to go through the math. Without further ado, let’s dig into the numbers. First let’s look into some options to define wealth. Using data from the World Inequality Database and Statistics Canada), it takes about $488,000 to be considered part of the top 1% in the U.S in 2019. Let’s assume that this applies to the number needed in a family/household. Let’s make ~$500,000 our first option, I’d say belonging to the top 1% in the US would be a pretty fair definition of wealth. If we look further than the US, we can also use this same 1% methodology to define wealth on a global scale. In that case you would need at least $744,400 in combined income, investments, and personal assets according to the global wealth report from the Credit Suisse Research Institute. A slightly more ambitious goal compared to our first option but we could define this as ~$750,000. Another option to look at wealth is to look at financial independence . My preferred way to define financial independence is to have enough wealth such that you can completely live off the dividends. A common rule used by the FIRE community (Financial Independence, Retire Early) is the 4% rule. The 4% can be summarised as a safe withdrawal rate that will not lower your total wealth over the long run. Even when there are temporary downturns in the global economy. This assumes you invest all your money in the stock market. The median household income in the US is $61,937 per year. We could consider a passive income of the median household income as wealthy. If we divide $61,937 by 4% from the safe withdrawal rate above we get to a total of $1,548,425. So using this logic you would need roughly ~$1.5M in total assets in order to be considered wealthy. Now, let’s discuss the generational part. Honestly, I was surprised when I found the exact definition: “ generational wealth represents assets passed down from one generation to the next. If you can leave behind a notable inheritance to your descendants, that constitutes generational wealth. These assets can include real estate, stock market investments, a business, or anything else which contains monetary value. I had somehow expected it would be something more ambitious such as that for x generations they would all have to be considered “wealthy too”. Achieving generational wealth would then be relatively easy given method one and two. You would just need to make sure something is left of your $500,000 or $750,000 respectively. Option three even has it implied. The whole idea behind option three is to never actually spend any of your wealth, you’re simply living off the dividends. This leaves us with the most difficult one: how much Bitcoin would you need? The first and most obvious approach is to directly calculate the amount of bitcoin that represents our different definitions of wealth given the current price. If we take a Bitcoin price of $30,000 that would give 16 bitcoin for option 1, 25 bitcoin for option 2 and 50 bitcoin for option 3. Now let’s bring in some of the nuance. First of all if you’re expecting to live off your dividends you cannot have all of your wealth be in bitcoin itself as it doesn’t pay any dividends directly. Normally the wealth would be in the stock market or in real estate. Also, if you assume that the value of bitcoin will keep rising you would obviously need far less bitcoin today to achieve generational wealth later. For example, Bloomberg analysts have predicted a price target of $50,000 for Bitcoin in 2021, implying a $1 trillion market cap for just this cryptocurrency. JP Morgan analysts estimate the price of Bitcoin to grow more aggressively, as they estimate a value of $650,000 by the end of 2022. Let’s be more conservative on the date, but keep an aggressive price target for the sake of the argument here. If we take a $300,000 price target by the end of 2031 how much bitcoin would you need today to achieve generational wealth? This would give us 1.6 bitcoin for option 1 2.5 bitcoin for option 2 and 5 bitcoin for option 3. Specifically for option three it would still mean though that you would have to cash out all your crypto assets and convert them into dividend generating assets instead. Also, with a possibility to see hyperinflation later given that 35% of all dollars in existence have been printed during the last 10 months it is questionable whether thinking of generational sustainable health should even be expressed based on dollar figures to begin with. I wouldn’t know how to express it in any other way, but am really curious to hear if anyone has good alternatives on this point. I am really curious to hear your views on this. I used many assumptions here, how would you have approached this? Are there any flaws you see in my logic? Feel free to comment on anything, and please feel free to absolutely destroy it! I’d love to have the discussion. Just to summarize, based on this you would need today: 16 bitcoin to be considered among the top 1% wealthiest in the US 25 bitcoin to be considered among the top 1% wealthiest in the world 50 bitcoin to achieve generational financial freedom Trading-Guru p.s. You might have seen a few reposts of this article as Tradingview was struggling with a faulty spam detector. The moderators kindly helped blocking and unblocking some posts. Thanks @scheplick!
BITSTAMP:BTCUSDEducation
by Trading-Guru
11
EDUCATION: Head And ShouldersHello, dear subscribers! Today we are going to consider the most reliable chart pattern - Head and Shoulders (HS). We ask you to support us with likes, it's not difficult for you and it will help us a lot. Thank you! The Head and Sholders chart pattern is the most popular pattern and if you use it in correct way it can give you a relevant confirmation for your trades. First of all we should understand that HS is the reversal pattern. It has a bad perfomance when it is used for the trend continuation definition. As you can see on the chart the price was in uptrend for a long period of time. After that two price swings formed the left shoulder and the head, but at the moment of head formation it is not understandable that it is HS pattern. You should observe the market carefully when the price bounced off the left shoulder top level and started to form the right shoulder. The HS formation is completed when the price reached the neck line area. This is a nice moment to short. Let's talk about the neck line. It is not obligatory should be horizontal. It can be ascending or descending in the dependence of lows levels between left shoulder and the head and the head and the right shoulder. DISCLAMER: Information is provided only for the educational purposes and should not be used to take action in the markets.
Education
by Skyrexio
3
EDUCATION: Hidden Bullish DivergenceToday we consider very powerful technical analysis tool - the Divergence. Definition The divergence is a situation when the price change is not supported by the oscillator. There are four types of divergences: 1)Regular bullish - the price shows lower highs, while the oscillator shows higher lows 2)Hidden bullish - the price shows higher lows, while the oscillator shows lower lows (you can see on the chart) 3)Regular bearish - the price shows higher highs, while the oscillator shows the lower highs 4)Hidden bearish - the price shows lower highs, while the oscillator shows the higher highs Divergence Trading Rules Let's consider the market uptrend situation. If there is the hidden bullish divergence it means the uptrend continuation. In case of regular bearish divergence there is a high probability of trend reverse from uptrend to downtrend. Another situation is when the market is in downtrend. The regular bullish divergence in this situation can be the evidence of trend reverse in the future. In case of hidden bearish divergence the downtrend will continue with high probability. Indicators You can search the divergences not only with Stochastic RSI. Other oscillators are also suites great here. For example, CCI, RSI, Volume oscillator, MACD and other.
Education
by Skyrexio
1
EDUCATION: Scalping 3-EMA StrategyHello, dear subscribers! Today we are going to talk about the popular 3EMA scalping strategy which is usually used on the 1-min timeframe, but we can demonstrate it only on the 15-min chart because of restrictions. Step 1 First of all we should define that the market is in short, medium and long term uptrend. The 200EMA shows the long, 100EMA - medium and 50EMA - short trend. Consequently all the three EMAs should follow in one direction, it's slope should be strictly positive for the uptrend identifying. The uptrend is an obligatory condition for the long position execution. Step 2 If the step 1 condition is true the next step is to identify entry points. We should enter long position when the price crossed the 50EMA from up to down, but after couple of candles crossed it again from down to up Step 3 Take profit and stop loss identifying. You should stop loss if the price crossed the 100EMA line from up to down. Take profit setup can be different: the fixed % growth, the price and 50EMA crossover and the price and 100EMA crossover
Education
by Skyrexio
1
EDUCATION: Parabolic Growth PatternHello, dear subscribers! Today's topic is parabolic growth pattern (PGP). This pattern can be applied for the current BTC price analysis. What is the parabolic growth pattern? This is a price growth pattern which is formed by the sequence of the bases and price pumps. The base is the price consolidation period after the price growth period. How to draw it? The main rule for PGP formation is that the parabola have to touch at least two points from the different bases. You can use arc to apply it on the chart. How to analyze with PGP? You can obtain some useful information for the price movement analysis when two bases have already formed and the third base formation is in progress. The main feature of PGP is that when the base 3 is completed the massive growth with a high probability there will be. This growth can be equal to the price change from the beginning of the formation of the parabola, but this growth is much more rapid. After the last huge price move we should wait the pullback to the base 3 level. This pullback can be sharp or smooth but it is inevitable.
Education
by Skyrexio
1
Bitcoin - DCA - The best strategy for most In this publication, I want to make a case for Dollar Cost Averaging (DCA) and explain why for most traders, it is by far the most profitable strategy. Rather than buying and selling BTC whenever you see a potential top or bottom, or trade with leverage. Let's travel back in time to the end of 2017, everybody is talking about bitcoin and this is how you heard about it. You get very excited about it, but you don't want to analyse markets, you want to invest in this coin because you believe it has a promising future. So you decide that you will put 100$ in it every month on the first day of the month and not look back, starting on Jan 1st 2018, pretty much at the top of BTC price. Bitcoin starts its decline, hovering some time around 6000 USD/BTC, but you keep investing, because you are smart and understand that you will get even more sats (1/100.000.000 BTC) for your dollar. More bang for the buck as it were. You just stick to your 100S/month investment plan, even through the dip to the 3500$/BTC lows in Jan/Feb 2019. So how much BTC would you have by now, how much would you have invested and how much would it be worth after (almost) 3 years ... In other words, what is your ROI ? Total investment : 3600 USD Total BTC accumulated : 0.48910342 Current Value : 13450 (BTC price of 27500 USD/BTC) ROI : 274% So, even though you started buying BTC, pretty much at the previous top, you still managed to get a return of 274% over a 3 year period. Now, tell me how many actively trading people will have made that return, even with leverage ? Q : Is it too late starting to invest 100$/month in BTC now that we have reached current prices ? A : Keeping in mind the current demand for BTC, mainly from institutional investors, the future for BTC is looking bright, and chances are that we'll even exceed those 274% in 3 years. The S2F and S2Fx models from PlanB predict a bitcoin price of somewhere between 100.000 and 288.000 USD/BTC by the end of 2024. Worth investing 100$/month ? Please note that this is not financial advice, do your own research and only invest money that you can afford to lose. Keep in mind that past performance is no guarantee for the future. Thanks for sharing your thoughts in the comments below, and if you found this useful, give it a like. Hope to see you back soon. Happy New Year and all the best wishes for 2021 and beyond!
BNC:BLXEducation
by Profit_Through_Patience
82
EDUCATION: Ascending TriangleHello, dear subscribers! Today we will talk about the most popular chart pattern - the ascending triangle. This is commonly known bullish pattern and its correct recognition will help you to earn money. How to identify the Ascending Triangle? First of all we should clearly understand that the price now is in global uptrend. The socond one is the uptrend support line. There are should be at least three attempts to break this line down. The last component of the ascending tringle formation is the horizontal resistance line. How to trade with the ascending triangle? If the ascending triangle pattern is formed you should identify the breakout point. It is the most difficult part of the analysis because the ideal triangle pattern is rare. We have to find some confirmation of the uptrend continuation with another indicators. The last question is how to set the take profit. It is usually used the triangle height for the take profit setup.
Education
by Skyrexio
EDUCATION: Engulfing Candlestick PatternHello, dear subscribers! The topic of this article is the Engulfing candlestick pattern. To be honest the candlestick patterns are almost useless if you use only this. But this is a great trend confirmation, so we will consider engulfing pattern with the Alligator Indicator which was described in one of the previous articles. What is Engulfing Pattern? The Engulfing Pattern can be bullish and bearish. The bullish one is the situation when the red candle is engulfed by the next green candle. It is not important if the candleweak was engulfed too or not. This is a subject for thought. Also it does not mean if the only one green candle or two consecutive candles absorbed the previous red candle. The bearish Engulfing candlestick formation is exactly the opposite situation. The Strategy You can search by yourself the ehgulfing patterns on the chart and notice that it generate a lot of fake signals, it means that we should use the indicator for the trend definition. In our example we use the Alligator indicator to do it. As you already know the Alligator has two phases - the sleeping and feeding time. If the sleeping time is over the jaw, teeth and lips of the Alligator become wider. At this point we should find the Engulfing formation to confirm the new trend. You should enter a long position at the point which you can see on the chart.
Education
by Skyrexio
CME Cheat Sheet 2021CME Group Futures Dates: Dec 2020 BTCZ20 16 Dec 2019 > 24 Dec 2020 Settlement: 28 Dec 2020 - Jan 2021 BTCF21 03 Aug 2020 > 29 Jan 2021 Settlement: 01 Feb 2021 - Feb 2021 BTCG21 31 Aug 2020 > 26 Feb 2021 Settlement: 01 Mar 2021 - Mar 2021 BTCH21 28 Sep 2020 > 26 Mar 2021 Settlement: 29 Mar 2021 - Apr 2021 BTCJ21 02 Nov 2020 > 30 Apr 2021 Settlement: 03 May 2021 - May 2021 BTCK21 30 Nov 2020 > 28 May 2021 Settlement: 01 Jun 2021 - Jun 2021 BTCM21 28 Dec 2020 > 25 Jun 2021 Settlement: 28 Jun 2021 - Dec 2021 BTCZ21 30 Dec 2019 > 31 Dec 2021 Settlement: 03 Jan 2022 - Dec 2022 BTCZ22 28 Dec 2020 > 30 Dec 2022 Settlement: 03 Jan 2023 - Source: www.cmegroup.com CME Bitcoin Gaps Study: marketsscience.com CME Futures Info: www.cmegroup.com CME Futures Open Interest Info: www.cmegroup.com Indicator To Track CME Sunday Opens:
CME:BTC1!Education
by The_Paradoxed_Prophet
1
EDUCATION: Ichimoku - Part 2Today we continue to study Ichimoku Indicator trading strategies. Last time we analysed in details the conversion, base and lagging span lines. In this article we apply Kumo cloud which is formed by Leading Spans A and B. The formulas for the calculation you can see on the chart. The Strategy Before considering the strategy we should understand that the Kumo cloud is projected forward for 26 periods. The simpliest version of the Ichimoku strategy employs just the Kumo cloud. We just should define the point where the Lagging Span A crossed the Span B from down to up and execute the long position. It is also recommended to define the long positions entry points more strictly. The price should be above the Kumo cloud and the conversion line should cross the base line from down to up near the Span A and Span B crossover. When to exit? You can exit long positions with three possible ways on your own preferences: 1)When the price crossed the Kumo 2)When the Span A crossed the Span B from up to down 3)When the conversion line crossed the base line from up to down You should test it by yourself.
Education
by Skyrexio
EDUCATION: Ichimoku - Part 1Hello, dear subscribers! Today we starting the training series of the Ichimoku Indicator trading. This article is about the Ichimoku definition and the easiest trading strategy using it. What is the Ichimoku Indicator? This indicator consists of 4 components: 1) Conversion Line - the 9 period high - low average price, demonstrates the short term period trend. When the price above it - the market is in local uptrend. 2) Base Line - the 26 period high - low avearge. It means the same as the conversion line but in the medium term period. 3) Lagging Span - close price plotted 26 period in the past. It can be used for the trend confirmation. When the lagging span is above the price it means the strong uptrend. 4) Cumo Cloud Lines - this lines will be examined in the next education article. Ichimoku Strategy (Conversion + Base + Lagging Span) The first Ichimoku strategy is very easy to apply for your trading. First of all you should filter signals with the lagging span: when it is above the price - it is time for long, in opposite - for short. When it is done you should find the point, where the conversion line crossed over the baseline from down to up and execute long position. You can exit long the conversion line bacame lower that the base line. The additional confirmation for exiting the position is the lagging span and price crossover. Next time we will examine the most interesting part - the Ichimoku Cloud and appropriate strategies.
Education
by Skyrexio
EDUCATION: Bollinger Bands Hello, dear subscribers! The next topic of our education is the Bollinger Band channel. What is Bollinger Bands? BB channel consists of three lines: the moving average of close price, the MA plus/minus 2 standard deviations. This channel defines the most likely price swings range. How to trade with BB? There are two different situations for the BB trading. The first one is the trading during the consolidation phase. You should open the long positions when the price broke the lower BB and close when it reached the centraline. The short position you can open when the price hits the higher BB and close on the centraline. The second situation is the trend trading. According to theory the periods with low volatility are preceded by the high volatility periond. When the the volatility is low the BB channel is squeezed and it is a good time to searching for the potential trend beginning. You can use Money Flow Index or other volume-based indicators for the trend confirmation. For example, when the price hits the higher BB and the money flow index value rapidly increased it can be the evidence of potential uptrend beginning. The most difficult and important problem of the BB trading is the trend direction definition. If the trend is defined correctly this strategy becomes very profitable.
Education
by Skyrexio
2
EDUCATION: MACDHello, dear subscribers! Today we will examine another one lagging indicator - MACD. It is very useful indicator but you need to use it carefully because usually it is just adds other indicators and can to generate a lot of fake signals. What is MACD? MACD consists of: 1)MACD (blue) = EMA(12) - EMA(26) 2)Signal (red) = EMA(9) 3)Histogram = MACD - Signal The MACD line is the long EMA value substracted from fast EMA value. It shows the trend direction. If the MACD>0 the market is bullish, if MACD<0 - bearish. The difference between MACD and Signal line is the proxy of trend strength. How to trade with MACD? The classical approach to MACD is to search the MACD and Signal line crossovers: when the MACD crossed the signal line from down to up it is the bullish signal, in opposite case - bearish. The MACD and zero line crossover means the trend confirmation. But this approach is not good enough to make profit. As you can see on the chart it can generate fake signals or signals which are too late - the price have already grown. If you want to use only MACD, please, find really strong signals. For example, if the price demonstrated higher low and MACD - lower low, it is the hidden bullish divergence. With the further MACD and signal lines crossover it gave a really nice long signal. Summary 1)Find the price/MACD divergence 2)Wait for the MACD and signal line crossover 3)Enter an appropriate position 4)Be careful about weak signals 5)Use MACD with other indicators as an addition confirmation sign
Education
by Skyrexio
10 reasons why being an active investor surpasses buy & holdMum and dad buy & hold (also known as "buy & forget" and "buy & hope") gets heavily promoted as some holy grail. Take advantage of the market rewards with the least effort, stress, and without having to pay fees to money managers, fees that will eat your retirement. To Bitcoin holders this is the greatest thing and they dream of wealth, they think they found the ultimate "best performing asset". But professionals don't really care about crypto, and anyone that is able to be somewhat competitive sees it as really bad. 1- The front page of this idea. Bitcoin holders are at 1.75R. In 3 years. 2- The risk adjusted returns are terrible. UBS Global Allocation Fund (buy & hold everything) has a max drawdown of close to 50% for a yearly return of something like 2.5%. The S&P averages about 7% a year and has drawdowns of 30%, 50%, and so on. Bitcoin has gone up 500% since september 2017, as well as march 2019, but it casually gets 85% drawdowns. Managed funds typically provide small returns for small risk, for example 5% annual returns and a max drawdown of 5%. Quants via ultra diversification (on assets and in time) get only green months, very little drawdowns and decent returns. Active traders, if they are good, get small volatility and consistent slow and steady growth. 3- It is what gets advised to noobs in investing as well as other competitive activities, like esports. Warren Buffett advises "just buy and hold". There is an equivalent. The game league of legends is popular so I think most people will get it. Players at the top say to poor players desperate to climb "just pick annie and roam", play an easy champion and rinse & repeat something simple. But no one is seeing armies of Annie one tricks in the higher elos. It's stupid advice that does not work. And if it does it's really the worse, second hand, "better than nothing" thing to do. 4- "Buy & Hold" is a one size fits all method, but there is no one size fits all opportunity. First an exception. People looking to pay their children university, or retire, have a 1 size fits all opportunity: fixed income. There are so many bonds and other contracts with all kinds of maturation dates, it's impossible to not find something right. Kid goes to uni in 10 year: Find a safe decent 10Y bond (still have to hedge currency risk if it is foreign...), collect some interest every year and get the entire amount in 10 years. So here you already see what can go wrong. What if you needed your money in March 2020? Bitcoin is down 80%. Sell? What if you bought and held Japan stock market and by the time you retire it's down in the gutter? Wait 30 years or more? 5- Some of the favored tools of passive investors do NOT buy & hold themselves. The vast majority US stocks go to zero. The S&P 500 which is buy & holders favorite itself does not buy & hold, performant stocks are added all the time, and poor ones are removed. So there is a fundamental flaw. And the S&P 500 strategy is as dumb as it gets, it simply buys winners sells losers. What if growth gets more volatile? It will be buying and selling all the time, or if there is a rule not to sell too often, hold losers too long and miss winners too. Besides the S&P 500 is only for the US and no matter what you think bull or bear it is basically betting on 1 single economy so still a simple buy & hold on a single thing (even with all the adding winners and removing losers). 6- Number 6 is abstract. Max simplicity and a total lack of effort and risk management cannot possibly create a reward. One cannot help but to think nothing can be free, there is no magical energy well, matter does not pop out of thin air, and in the same way there is no magical trick to get money without doing anything. Every critter on this planet needs to work to get something in return. In other activities being passive leads to no result. Do nothing, nothing happens. Why would this be different? The power of greed? Losing or gaining weight requires some action, magic trick special diets still do not work, buildings don't build themselves even government contractors have to work at some point. 7- No one successful does it. There might be a few lucky exceptions, but never lucky enough to really get to the top. George Soros was or is active, Buffett is active, every billionaire and centamillionaire on the planet is active. I have never heard of passive buy & holders that happily retired. The only "retired" passive novices are the ones that got lucky, bought dot coms before they went ballistic, bought Bitcoin early enough... 8- You'll miss out on great opportunities Giant contangos, mispricing, very underpriced stocks... Imagine being underwater rather than full of cash when a certain investment is super undervalued. And look at Bitcoiners, rushing in to buy "the dip" in january 2018 and laughing at me when I suggested a price decline and being patient as I thought there would be opportunities. They end up holding some $16000 BTC, then add more as the price goes down because let's risk everything. Each $16000 Bitcoin they have is 4 $4000 Bitcoin they did not buy. After 3 years BTC made it to 22000 wow fantastic! From 16k to 22k. If they "risked missing out", did something else with their cash, and bought $5000 BTC this year they'd have more than quadrupled their money. When BTC makes it to 20k then drops to 3000 it easily has much more upside than downside. I always said I would not short under 5000 even when I said it will eventually go to zero (it 100% will). Buying a coinflip ultra risky casino chip with no stop loss when it is close to ath. Just so bad. There is a difference between timing every top and bottom which only twitter crypto traders do, and avoiding really stupid actions. 9- "Buy & Hold" is a hoax perpetrated on credulous retail investors to milk them. You know what reduces risk and adds liquidity in the market? Dumb money consistently throwing money in the pot. Institutional investors that are happy to promote this hoax sell when they consider prices to buy too high, we witness phenomenal crashes, and why would anyone choose to not sell high prices and just hold the bag? Institutions are literally dumping on willing dumb money that has no idea how low prices will go and how long the drawdown will last. While they recommend to "just buy and hold" their own holding periods have never been shorter. And many of the professionals that buy and hold are just getting more AUM out of it. We know for a fact they are scamming energy ETF "investors" (USO), day traders, Robinhood "investors" From Jim Cramer: “Pick a couple of stocks, you gun them in the morning, and then you hope people are stupid enough and they buy them.” Like institutions cannot wait 9:30 to buy their shares, no no they are in a hurry they have to get in at terrible prices in the pre-market. Hedge funds are happy to rob dumb money. No matter how, no matter the time horizon. 10- I have no crystal ball do you? This scam summed up: "Hello individual investors. Today, based on available info, try guessing what will happen in the quarter century, and then for the next 25 years discard any new info". Emotions & logic are on a spectrum, and this idea is not on the more logic side of it. It makes less sense than buying a lottery ticket. At least the ticket buyer can say he is having fun, a sort of little adrenaline rush, and lottery ticket buyers can use flawed logic saying they only pay little and in their lives they'll never pay as much (not even close) as what the reward is. But buy & holders cannot even say they are having fun. What fun? Fun forgetting about something? "I'm having fun being passive sitting on a bench and not playing basketball and not even watching it". See it makes no sense. Or fun watching your money disappear while you do nothing maybe? And I don't see how they could use flawed logic here "ye so I make a bet on the future with limited info and as more info becomes available I put my fingers in my ears and go lalala".
Education
by MrRenev
3
BITCOIN: What's driving it? Is 30,000 in sight?In this video I show my theory on what's probably happening with BTCUSD. It appears that Bitcoin is being used to hedge against the US Dollar crashing. $22,000 is certain in sight and who knows it could get to $30,000 sooner than anyone might imagine. I still think that BTC is too volatile for my liking and therefore I've stayed out. I've been happy to avoid FOMO. I've lost nothing. I think that many will profit from a possible further charge north. But there is also still a risk that it BTC could reverse significantly. Best wishes for the Christmas period 🎅and have a Happy Prosperous New Year. 🥂🎁
BITSTAMP:BTCUSDEducation
by Captain_Walker
29
EDUCATION: Commodity Channel Index (CCI)Hello, dear subscribers! Today's topic is the Commodity Channel Index (CCI). To be honest, in sole use it is almost useless indicator but a lot of profitable strategies and indicators contain it, this is the reason we need to understand how does it work. Definition The CCI formula demonstrated on the chart. To make it clear it is the some math manipulation with the typical price momentum, the same as in momentum oscillators calculation, but here we have unbounded value. The CCI value higher than 100 associated with asset overbought condition, lower than -100 - oversold. It measures the strength of the trend, but usually this information is not actual. How to trade with CCI? According to fact that CCI is lagged indicator we are not recommended you to trade with it in sole use, because it generates a lot of fake signals or does it when it's too late. We can give you some signals which help you to build the complex strategy. When the CCI in overbought zone it can be the evidence of future price drop, in opposite case - the price increase. You can see on the chart the potential short and long exit and entry points, but keep in mind that there are a lot of cases when this analysis is invalid. Summary 1)Don't use CCI as sole indicator 2)The main feature of this indicator is overbought and oversold conditions. When the other indicator demonstrates the potential price movement direction you can use CCI as confirmation.
Education
by Skyrexio
1
Pattern Cheatsheet: Identfying a Broadening Top PatternThe Broadening Top pattern appears when price makes a straight upwards run (similar to the "Flagpole" of a Bull Flag Pattern, then swings between two expanding broadening trendlines with at least 5 touches. It is a neutral pattern which means it can break out in either direction, on the bottom right examples i have explained how the pattern is identified, measured and traded for both Bullish & Bearish breakouts. The idea is to get a entry early by identifying the pattern, (point A) which allows for a better Risk:Reward ratio and closer stop loss. The second potential entry is at point B, which is considered a Bullish or Bearish retest ( Support/Resistance flip it is also known as), but this area is a bit risker and has less "room to move". The pattern can give a a sign that the price may have a higher chance in heading in a certain direction, and we can measure the height of the straight run upwards, aswell as the height of the two LARGEST SWINGS within the pattern to get two possible price targets ; one conservative and one less so. The Broadening Top appears frequently on Bitcoin & Ethereum and has one of the better success rates out of all the different Broadening Patterns and is one of the easiest to trade & identify because often it works similar to a Bull Flag pattern. If you found this idea informative, Dont forget to show your support by liking & commenting thank you traders!
Education
by Worth_The_Ri5k
EDUCATION: Williams Alligator IndicatorHello, dear subscribers! Today's topic is Williams Alligator (WA) Indicator, which is very important and efficient trading tool at any timeframe. Definition WA consists of three lines: Jaw = Moving average with length 13 and offset 8 Teeth = Moving average with length 8 and offset 5 Lips = Moving average with length 5 and offset 3 But you can choose your own settings. This indicator usually use for trend confirmation and works perfect with other indicators, which will be examined in next topics. How to trade with Williams Alligator? Alligator has 2 states: slleping and feeding time. The yellow areas demonstrate the sleeping time, when the lines are intertwined. During this period is not recommended to trade. When the lips start rapidly move down it means the downtrend start. After this the jaw starts open and the feeding time confirmed. When the red candle closed lower than all three MA lines, this is the perfect moment to entry short position. The exit condition is the crossover the lips and teeth lined, but you can do it earlier - when the price broke up the lips or teeth lines. For the long position the opposite is true, the lips line have to rapidly move up and be above other MA lines. Summary 1)Define the alligator sleeping time 2)Find the moment when lips line starts to move down and below other lines for short and move up and above for long 3)Wait the candle close below/above all three lines for short/long and entry position 4)Exit the position when the lips line crossed the teeth line This indicator is also has not perfect performance in sole use, but with other indicators it can bring a great profit. We will talk about it next time.
Education
by Skyrexio
2