Bitcoin Forum

If I ask "what moves price?", I am sure a lot of answers will be buyers and sellers; but what makes buyers and sellers buy or sell? The answer is Conviction.
All price movement results from an imbalance in the degree of conviction between the traders who believe the price is going up and those who believe the price is going down.

Retail traders are classified as passive traders and the only way we find ourselves in winning trades is by the actions of the big movers in the market who are willing to bid the market up or offer them lower.
This simply means that we are trading other people's perceptions of what is high and what is considered low. So in short, you are simply depending on the dynamic traders to make you a winner or a loser.
The big movers in the market are referred to as dynamic traders. The dynamic traders represent those with a large chunk of money enough to move the market.

Now let's get technical and relate this with the charts. Imagine an uptrend, for example, price surely gets to a level where it reverses; this level is marked as a level of resistance.
What really happened at that level of the market is that there wasn't one person in the whole world that was willing to bid the market higher; no one was convinced as to why price should go higher.
There are a whole number of traders out there with the psychological and financial resources to bid the market higher or lower and there is no way any technical methodology will know where the price is moving to except you get into the mind of the dynamic traders who are willing to move the market.

What technical analysis does is that it gets into the collective mind of the market but it can't get into the mind of the individual trader traders that drives the price up or down.
We as technical traders, always come up with a reason as to why the market went up or down (for example, trendlines, support or resistance, fibs etc.) but the truth is that there is no reason you will come up with as to why the market went up or down other than the fact that there is an imbalance (conviction).

No technical methodology is designed to tell you what will happen on a trade by trade basis. This is why we make mistakes because we are expecting something from our methodologies that don't exist!.
This is also the reason why a trading strategy/methodology wouldn't tell you what will happen on a trade-by-trade basis but on a series of trades by a percentage % basis.
Your consistency as a trader is based on what happens on a series of trades. This is also why it is not reasonable to expect a strategy with a mathematical method to work consistently in a changing market.

In conclusion, what technical analysis does is finding a pattern amidst the imbalance/conviction of the market, it measures the probability of one thing happening over another.
As a result of the fact that patterns (edges) show up from this imbalance, it turns technical analysis into an unending stream of opportunities to enrich oneself.
The effect of the dynamic traders in the market doesn't mean you can't make consistent income with technical methodology; all you need is to trade with an edge/strategy that works and follow a trading plan.


Understanding the dynamics of price movement will help you trade your plan without expectations or putting emphasis on things that doesn't matter.
I hope you see the market differently now. :)

I can understand what you are saying, but I will never be a fan of technical analysis. With graphs and lines you can prove anything. But you will have people who are pro TA and people who are against.
I haven't met anyone, who can make accurate analysis and predictions based on technical analysis.

Well, i don't believe you have to make accurate predictions to be profitable in trading.

Provided you have a good win rate on a series of trades, you are good to go.

No trading method is 100% accurate. I don't even think there is any that is 90%

It is extremely difficult to predict the market through technical indicators and I will advise people to just focus on fundamental indicators on any assets their desire to trade. Trading is however a game and it is better you use what work for you.

I trade using technical methods.

The reason for this is to make traders understand what we are up against so we can heed to every necessary trading rules which will keep us lasting in the trading game.

Well, on my own. You can't rely only upon technical analysis, that is right, the market is extremely difficult to predict and creating speculation through TA is not commonly give an exact result ^{[ perhaps it is near ]}, how could you believe if this does not even give an accurate result. However, thank you for trying us to explain your technical analysis, --but, indeed, I believed if you will show your proof of this not only for discussion.

That is the reality in regards to TA. It is to believe that those passive traders don't rely upon TA's but having in the actual scenario and adapt to it will it exactly could help them. Traders should become vulnerable to that kind of change and we can't expect that TA's will work great all the time as we know how volatile we are.

Whales probably don't have that kind of analysis, instead, they go along with the market and use their manipulating power to change the trend. Besides, most traders are relying on their actions and predicting what they'll do next rather than to keep TA's.

Well I can agree with this opinion, the value of this coin can actually be unrealistic and this is what the big traders offer us, but I as a simple trader with a small capital What can I do about that? Nothing of course? I can only walk with the market and buy and sell at the price that is determined in the market regardless of who determines the price in real !!

Even when you do the technical analysis, you still can't guarantee a sure win for every trades. That's why there is a stop-loss if incase your analysis goes wrong, the cutting loss is very important in trading, it's one of the best weapons in trading because of NO 100% TRADE every time.
I'd rather use technical analysis than fundamental analysis, that's why if you want to become a trader you should really learn and love technical analysis.

These are nice explanations and I think very helpful for many users.
Some are against and some pro technical analysis but it's needed to point out that is just another tool that might be helpful but just because of it you will not become more successful trader. In fact, there is no tool that will tell you what, how and when to do something in trading and get profit.
However, all these tools including technical analysis might be useful if you know how to read the data and how to use them. But there is no plug and play solution that will made you successful trader.

Your explanations are not having enough weightage to change my perception on technical analysis because I am already viewing the market in more or less same way you have explained, lol ;D. I mean your theory might be a surprise for the people who never experienced all the pain of markets but definitely not the people who are into trading for years :D. I just regret that I'm not getting this kind of explanation some 10 years back itself so that I would have approached trading definitely in more effective way than I started doing that after lots of struggle.

Technical analysis is one way to predict what is going to possibly happen and definitely not a mathematical calculation that will foretell what is going to happen exactly in upcoming hours/days.

Dynamic traders are everywhere but group of passive traders may overcome the decision of dynamic traders on some occasions; I mean dynamic traders will be losing power when more number of passive traders will be taking same decision. Manipulations are everywhere but when more volume is happening those manipulators will lose their power. Simply following a technical analysis will help because more other traders also will be following it to take their trading decisions.

Is understandable if you say no one makes accurate analysis (technical), analysis is what it is; all based on probability. Analysis is a guide and not what must happen by every means. It made of charts yes, and it helps a trader in narrowing probability to happen. It is like imagination put in charts.

This basically clarifies how TA's aren't gods, they aren't time travellers that came back in time to show the future of the market prices. They aren't all knowing and therefore, should not be the basis of your judgement when trading ;D . Even if we do say that a TA's judgement is based on analysis of the trends and facts, it still remains as fact that a TA's judgement is just purely prediction.

In the end, the chances of you hitting it off with a trade is 50/50 for all chances. Win or lose, no TA could lessen that. Even if you say that someone was going to make a big move, it remains that the big move does not guarantee a more than 50% chance of it successfuly moving the market as you predicted.

right. TA is just based on indicators and the indicators can be completely wrong. all are probabilities and no one can know where the market will go in the future. For fundamental analysts, I still see signals as just probabilities. so trading like a gamble, we need to be alert when trading because we still need luck. when unlucky, we must have a backup plan to not lose too much.

These points are very valid for crypto markets where technical analysis alone are just not enough and we end up caught in the wrong trade, for crypto markets it is very important to keep updated with the fundamentals of the project you are trading and if you are a technical trader even then you need to find atleast 2 to 3 confirmations before entry like you need to confirm support, resistance, trend lines, double top or bottom or youcan also take confirmation from candles and harmonic patterns.

The trouble is hidden at the end of the line, check out the "all you need to do is to trade with an edge/strategy that works and follow a trading plan", well if there was any edge or strategy that would work forever everyone would have followed it.

That is what bothers me the most, some people think that there is a method or a strategy that you can use to make a profit and they are missing the fact that there is 8 billion people in the world give or take (said 7 but I believe it is closer to 8 nowadays) and over half of them are poor, don't you think if there was an edge or a strategy that would allow you to make a profit, those people wouldn't realize this and EVERYONE would use it? So by all conclusion, no strategy can work too long, it works for a while but then too many people use it and break it so you gotta find a new one.

The currency rates are unstable and witness large fluctuations permanently and continuously and for this reason it will be difficult for us to predict currency rates and the success rate of prediction will be very few and rare and there are many people who believe in this way of forecasting and there are people who never like this method and I am among the people who do not They trust this kind of analysis and I don't think I will

I understand that technical analysis can be life-saying so to speak but I think this is not absolute. Technical analysis can only help up to a point and it would depend on who's doing the analysis as different people might read trends/charts differently.

Since this is a technical strategy which is probabilistic I personally rather use my knowledge in conjunction with the amount I'm prepared to lose, I never rely on analysis alone - I think this is a danger many traders fall into, while numbers can't like, numbers can be misinterpreted and its even worse when market volatility plays such a huge role.

Great explanation OP, but how does it relate to cryptocurrencies. We're talking about a market that is overwhelmed by the number of bots and wash trading. My opinion is that TA in cryptocurrencies is very limited and works out well in identifying bull amd bear markets but not in short-term moves.

Using your language we're in need of those dynamic traders. Bitcoin trading in a 9000 channel looks like it has no real depth just bots buying and selling the same coins over and over.

Do you think we really move the market? We are like a remora fish on a shark just going along with whatever they do.
The fact that their actions leave patterns behind in the market is what gives us an edge to trade with.
Technical analysis gives you an idea of what the market is doing; and if you trade price action, all you study is what price is doing (indirectly, the actions of the dynamic traders).

The dynamic traders know the way you see the market.
They know you are drawing a support or resistance zone wherever you are drawing it.
They know the way retail traders think and the way we go about Technical Analysis.
All they simply do is manipulate the market in their favour to get the price where they want (cheaper for them) at the expense of our stop losses.


This is why what matters in trading is sticking to a winning strategy and following a trading plan (You follow a trading plan because a winning strategy is never 100% accurate)


I agree with this. I'm also a purely technical trader.


Exactly!
Truth be told, there is no Holy grail in trading.
The only thing I refer to as MY holy grail is Risk Management.


This is a very nice contribution.
More the reason why it is advised to trade with the trend.


If you say it's 50/50, then i will refer to trading as gambling.  ;D
I don't see it as 50/50; i see one side having a higher probability than the other. more the reason why we have confluence.


Actually, on the contrary, i am of the idea that individual should stick to a strategy.
Obviously we trade in a changing market condition; this is more the reason why traders should have a strategy for different market environment.

I trade based off Discretion.


This is related to cryptocurrencies.
Price is always manipulated to lure traders into pushing price to a level where whales can get them cheaper.

When it comes to precision and accuracy then it wont really be fitting out here on crypto even TA's on forex and stocks doesnt really give out precise results but somewhat these kind analysis
can really help out on basing up on what would you gonna do on next trading position because if you do just making entries or exits without basis then we are just simply doing gambling.
Of course it wont really be reliable from time to time thats why it isnt really bad to look for another resource or analysis that might fit out into yours and this is how a versatile type of trader in the works.
Dont stick out on one, just continue to look up everything.

With all your explanations, how was your trading so far, OP? I admit that I someyimes misread my technical analysis, if you identify that hidden behind the technical analysis readings, I pressumed you traded well, don't you?
 
 
 It is easier said than done. And as a trader, I know for sure that there is a risk and that I may not get some consistent income here. Market is hard to read, whales are there to attack so even the strongest technical analysis will be failed.

Disagree with some points. When you trade you have to take those factors into account. You probably know that the market is hard to read and whales are too! However, the technical analysis skills help a lot in analyzing the market and reduce the risk of losing your capital. When you trade, you probably know there will be a risk of being failed. Technical analysis helps you in increasing the chance of succeeding.

In as much as every technical Analyst will try telling you that TA and proper studying of the chart is the key factor to profitable trading, i will say with my experience in digital assets markets, it is far more than that and the force behind the price movement is more than what can be analyse by mere looking at the charts. The force of demand and supply which is the major force behind price movement is greatly influence by other factors such as fud and announcements

Why most traders do Technical Analysis is that because they know that it helps them in the future but I don't the reality of it and we know it will change all of a sudden. We can't expect TA's will give us an assurance but ain't make to think that it is no use at all, because we can still make this as a tool to have a good prediction rather than to have nothing rely on.
Trading isn't all about having TA's but it also matters how you respond to the market change without TA. Acquiring tools needed for a trade is really helping individuals but has to say that we can't just rely on them all the time.

No matter how good you are at using technical analysis you will still don't have any kind of guarantee that you are making the right call everytime, technical analysis is not always about analyzing the price charts but also having entry and exit points where you are ready to bail out a trade as soon as it fails. Analyzing the chart is really only one part of the whole problem here because if you don't have any entry and exit plans you will also have a chance of missing a lot of opportunities as well as incurring losses.

Most of the time we do technical analysis without understanding and when we analyze something we make a decision without knowing the facts behind it or without understanding it very well. Many times we know that despite the fact that Technical Analysis plays a very important role in trading, we trade with passion, maybe there is a lack of skills.

There is always trend hidden in another trend and many a times we mistake it for something else or we are unable to find that hidden trend which makes trading unpredictable and that is what I mostly miss in technical analysis, but mostly that microtrend doesn't have much impact on the outcome and when it does have its impact then I loose money and I am working on it day by day to improve my abilities and also my profits that I make from trading cryptocurrencies.