Bitcoin Forum

"Technical" analysis is so prevalent in all the bitcoin related communities that newbies may get the impression that the majority here is actually trading according to it. That is not the case!

Voodoo indicators (e.g. 3d Ronald McDonald Indicator, Random Squiggly Line Indicator, etc.) will not predict price movements! They do not guarantee successful trades! Don't fall for the deceptive words of the snake oil analysis high priests!

It's mostly just a bunch of esoteric shenanigans trying to make itself appear slightly less ridiculous by masquerading behind the term "technical". That one guy on r/bitcoinmarkets is at least honest and flat out admits that he trades according to astrological constellations. May I suggest some tea leaf reading instead? Or how about analysing the flight of the swallows? 100% trading success guaranteed, follow me on twitter and subscribe to my blog for only $29.99/month. I'll throw in a fancy feather crown for free!

None of those silly indicators predicted the series of massive drops we have seen in the past months. Instead, the false prophets on reddit would announce each and every time how all their indicators are pointing towards a great buying opportunity right before each single massive dump. People probably lost a boatload of money if they actually listened to that nonsense...

First things first... NO ONE GUARANTEES THEIR ANALYSIS TO BE 100%.
Secondly, My charts have only had about 4 real longer hold signals since January. These aren't transfer to cold storage holds either, but longer than a few days. I trade a lot, but the longer term signals haven't been on the bulls side at all in 2014. The people saying all their indicators are pointing up over the last months, are just spewing baseless crap.

agreed, this "analysis" is 100% bullshit.

there is only 1 analysis that is necessary: there is too much analysis

there are still too many people interested in bitcoin, too much hope and too much false optimism around. that's all you need to know. forget the astrology, "indicators", moving average hype bullshit.

bitcoin has had its day, and its day was in november 2013. that day has now passed and it's a long way down.

dont waste your time with any of this "TA". the only relevant fact is that bitcoin is over-traded and under-utilized. that means its a prime short.

call me falling ok, but that's my position

 :D :D

you're in for some surprises if you expect bitcoin to fade away like that

Ok, here are just 2 quick quotes as examples:



Proclaiming that you can safely make billions (lol!) and that Ronald McDonald is never wrong is IMHO pretty close to promising a 100% success rate for making profit. And that's just 2 random quotes from this board, I'm more familiar with r/bitcoinmarkets where they use magical indicators and arbitrarily drawn lines to make false predictions about imminent price outbreaks basically every day. Doesn't seem to bother them though, they just continue the very next day as if nothing happened...


To me this reads like a variation of the No True Scotsman Fallacy:
"Scotsman Indicators give you false trade signals? Well, then of course he's not a TRUE Scotsman you must be using it wrong!"

In any case, even if you are right, most of the economic wizards I see on these boards are quite obviously unable to use their TA tools correctly as the vast majority of their never-ending predictions turn out to be constantly wrong.

http://i.huffpost.com/gen/1731408/thumbs/o-UNEXPECTED-CLARITY-900.jpg

There are people (on the Internet, writing about it, in fact) claiming to do physics and having invented perpetuum mobile devices.

An actual physicist pointing out that's just bunk science, and that their claims can safely be ignored is also just committing a 'No True Scotsman Fallacy', by your interpretation.

The low signal/noise ratio on a forum like this, and the large number of thoughtless practitioners of the more cargo cult-ian aspects of TA in here, are not sufficient reason to conclude that TA in principle doesn't work.

This is the Weekly McDonald's :P
Nowhere in 2014 has there been a buy signal
The closest we got was the cross up, back in June. But the low angle of the cross was a weak signal with low probabilities. Some "absolute" traders may have called that a strong buy because it "Absolutely" crossed up. Some that can discern the difference between a good signal and a bad signal made money (or at least protected their wealth) and didn't buy there.

https://i.imgur.com/eJuUV64.png
The quality of the analysis comes down to how well they can read the market. Experience plays a gigantic role in this. Some have it and some don't.

Look, I'm not trying to convince you to convert to our side (I already did enough of that with others around here :P ) but I just want to show you that there were no real "TODAMOON" signals at all this year and most signals that were present said down.

My quote pertains to the historic performance of the indicator.

FIrst, this is taken out of context and 2nd saying that it has not been wrong so far is not the same as suggesting it will never be.

You know, I'd just like to actually see one of those guys who safely made billions with TA. Otherwise I will simply dismiss them into the same category as perpetuum mobiles (that's actually a nice comparison you came up with there, oda :D).

But I guess they are probably all too busy living the elusive, seclusive rich people life after they safely conjured up all those billions.

Don't think anyone made a billion in this market yet. Not enough liquidity, no sufficiently established exchange yet.

A million or two on the other hand... I'm pretty sure some managed to do that by trading. How would you want them to prove it was due to a strategy though? Just posting a list of trades, even if profitable, could be still just a result of chance.

Have you any positive evidence for your positive claims? No? Then you are no better than the so-called charlatans.

https://en.wikipedia.org/wiki/Invisible_Pink_Unicorn

Those safely made billions are out there somewhere, trust me! You can't see them yet, but that's just because you lack faith. Trust in your technical redeemer and you too can be rich.

http://i.istockimg.com/file_thumbview_approve/6716537/2/stock-illustration-6716537-money-wizard.jpg

Its a fallacy for two reasons to say that 'TA' is bogus because not everybody wins using it. Reason one, most people HAVE to lose, it's a zero sum game! Reason two, a lot of technical analysts are trolls and cant explain a single thing about what they are doing.

There are some very robust laws playing out in the market that have to be respected. Ask any economist who 'understands the fundamentals' ( :D). He might tell you that forces of the market act to restore equilibrium. they do! a physics scientist will also tell you that this is exactly the model of a simple sine wave. In other words what goes up must come down. If the technical analyst uses leading indicators that effectively can measure momentum, acceleration and deceleration in price action, he has officially a legitimate mathematic and scientific edge in probability of choosing low and high prices to buy and sell.

Why should my analysis wouldn't be as legitimate as anybody else  ???

http://s29.postimg.org/yu7h7q1p3/ZVODOOANALYSISUntitled.png

Well, if it didn't go backwards in time might be a good start :)

You can't beat chicken entrails, IMHO

This guy gets it ^^

Oh look, another TA bashing thread.

If you're all going to act like closed-minded children about it I'll simply keep my TA-derived trading strategies (and profits) to myself.

gosh, really? what the hell does "equilibrium" have to do with it?

you think there are really hard and fast rules to any market?

seriously dude, forget this sine wave thing. it's rubbish seriously.

the closest thing to a market is a game of chess or poker. that's it. everything else, any rules or moving averages, indicators, or statistics, are incorrect.

how could you figure out the best move in chess by using statistics? clearly it would not work. the same goes for this sine wave thing. there are no logical rules to chess, just as there are no logicl rules to how a market works.

the way you win chess is to get inside the mind of the other player. that's why computers who are good at chess search through all the different possible moves and pick the best one. they dont perform any statistical analysis of previous gameplay, on the assumption that future gameplay will be like the past. the same is true of markets. to figure out how the market is going to move, you have to get inside the mind of the average trader.

any other strategy or technique is pure bullshit. we all know that indicators may occasionally work, but because they have no scientific merit they are not hard and fast and will fail.

there are multiple philisophical points that are brough up by this discussion, interestingly. but ultimately how your model works is more important than the output. if you base your model on incorrect assumptions, you are never going to get a satisfactory output. and that is where 99% of market predictions or indicators go wrong.

the only way to make money from indicators - or more broadly any form of technical analysis - is to sell them to other traders on false claims. john bollinger has done a pretty good job of that.

Im looking hard, really hard, but I cant find any facts here. lot of fallacies though.

all analysis in BTC is voodoo actually

Oh no, I guess I blew it. No more safe profits for us unbelievers.  :'(

Thank you dude, each quack quacky "analysis" less makes a real difference! I was already worried this thread would be for naught.

Edit: Changed the direct ad-hominem 'cause of chessnut. :-*

I admit that I've taken it a bit too far with that.

the TA bashers all use ad hominem, lol.

But you see, there is evidence against any such thing.

You, however, have still not supplied anything at all except a bald assertion that some X is Y. You haven't even properly defined any of the terms you are using. And you expect rational discourse to follow?

Try demonstrating that there are no correlations with the variable time against the price graph. Most such analyses show that markets differ greatly from random walks, and are therefore predictable at least in theory. Then, you can try to show that even though markets may not be random walks, they exhibit other properties which prevent technical analysis from ever detecting these patterns and trends.

You will be fighting a losing battle, though, I am afraid.

Well, name calling doesn't really do it for me anyway :)

To get serious for a moment there are a few good TA books out there. And the tenets of DOW theory take like, what, five minutes to read? They are helpful if only to understand how the market discounts everything and how TA is used to measure the mass psychology of individual participants in market which includes fundamentals. Seems like you wouldn't be interested in that though.

What I expect is to steer innocent newcomers to this forum away from false promises of easy, safe profits. So they won't waste their precious time and money on this TA mumbo jumbo.


Can complex, sophisticated algorithms enable safe and reliably profitable trading over reasonably long time periods? Sure, sufficient evidence for that is available. But these are in a completely different league than arbitrarily chosen lines drawn by humans with bullish/bearish glasses on or absurdly simplistic indicators that provide hardly any more information than a good look at the bare chart itself. Just like I'm not believing in oda's perpetuum mobile I'm not believing in safe and reliably profitable trading based on such lines and indicators, unless I see it for myself of course. But then again on the other hand, r/bitcoinmarkets serves as a seemingly never-ending source to supply evidence to the contrary. Probably right now their indicators are turning green again, it's obviously time to buy! Just like it was on that day before we crashed to $275. TA never fails to deliver - horrible trading decisions that is of course.

https://i.imgur.com/PCX8ZPP.jpg

This is not what is in dispute LOL. There is TA which can be explained in detailed in scientific terms alike to algorithms if not better.

OP, you seem angry, lost much? Maybe you used the wrong TA? PM me for solid TA! Don´t believe those false TA charlatans out there!

It seems legit. Bitcoin is deflationary. So deflation spiral is possible. But not of the coin itself but economies that will use Bitcoin.  ;)

Now you are moving goalposts. If you admit that some TA is useful then it is a fallacy to only give stock to "complex, sophisticated algorithms". Indeed, simpler algorithms tend to be more useful because they often have a better noise/signal ratio and you end up making fewer trades.

This is clearly not the message of your OP, which opens with the tone of your run-of-the-mill "TA is astrology!! and tea-leaves!! and snake-oil!!" thread. These are actually quite common on this board and you are simply adding to the noise, yourself.

While I do understand your concern for the sheep who follow the amateurs' not-so-knowing direction on forums like /r/bitcoinmarkets, we can take some consolation in that the issue is somewhat self-regulating. It is always heart-breaking to see dangerously uninformed people lose their life savings playing with bitcoin. But whether they are trading on bad advice or just trusting their funds with shady third-parties as part of a HYIP, there is literally nothing that can stop a fool and their money from parting.

tl;dr The problem is ignorance, all around, not bad science. It is the environment in which it thrives.

Spot on (and pretty concise as well).

I've tagged you as a poster with one of the highest no. of quality posts out of total no. of posts ratio, imo... not sure if that means I should ask you to post more often or not :D

Employing hundreds of PhDs to analyse extensive databases with the help of extremely powerful high-end computers to find and exploit market inefficiencies couldn’t be further from reading the tea leaves of charts using technical analysis.^{1 (http://seekingalpha.com/article/59187-why-technical-analysis-is-nonsense)}

That's like comparing ancient alchemy to modern chemistry. Alchemy is not better because it's simpler. Hoping that fantastic lines you paint on a chart will lead you to riches is magical thinking. It'll probably lead you to bankruptcy instead, I recommend you better renounce the demon of TA now and open your heart to the spirit of reason before it's too late!

                                                                                                               https://i.imgur.com/0zqQK2s.jpg

Awww fonzie, I love you too.   :-*

But no, I didn't lose any money. Because I sold all my coins before the crashes after being told by a permabull that "only a fool would sell at these levels". I'll just go ahead and assume that he came to that conclusion using TA. That's what TA does to people.

About my own experiences with TA: I dabbled in forex years ago and luckily realized quickly what a bunch of hogwash that stuff is before I lost any money. Now I'm trying to help the lost souls here get to the same conclusion before they become completely corrupted. I have hope, but it looks pretty grim for now.

Im not sure if OP is being sarcastic or actually serious about selling 100% guaranted TA predictions for 30 dollar a month.

OP strangely ressemble a LambChop clone

Another thing that really irks me about TA is that it's not just a grandiose waste of money, but also of time and energy. Let me explain what I mean:

Picture yourself on a boat on a river, during a job interview. You urgently need that job because you just threw all your money out the window, based on a hunch you got from TA. "But the 3d MACD indicated this was the direction the market would be moving!" you try to justify yourself. Now you start sweating profusely. Also, you are wearing a goofy hat and a comically oversized bow-tie. The interviewers ask if maybe you have acquired any kind of useful, special skill that you could add to their business. Your face lights up euphorically and you go: "Well, I spend a lot of time drawing lines on charts and watching indicators turn green. Do I have the job?". Yeah, that's not going to fly, sorry dude.


                                                                                                                      https://i.imgur.com/Is3C4zY.gif

 :D :D

As if there's not a bunch of people on Wall Street making 6 figures salaries drawing lines and watching indicators at every banks' trading desk

This hole you are digging, it is deeper and deeper.

http://pixel.nymag.com/imgs/daily/vulture/2013/06/18/leo-gifs/gatsby.o.jpg/a_560x375.jpg

You nailed it, OP.

Knowing what the price did 3 days ago, 4 hours ago, 1 hour ago and 15 minutes ago is a hell of a lot more useful than just knowing what it did 2 seconds ago.

If you call that "voodoo analysis" then I think you should play the lottery instead. You may not win anything but you'll loose a lot less.

Love the chart!  I'm reminded of this one (which I'm sure was from a thread here ages ago - although right now google only finds me the chart and not the post here)

https://i.imgur.com/4NKXJMY.jpg

All i read is



BLAH BLAH BLAH I don't know how to profit from BTC markets BLAH BLAH BLAH TA is bullshit daytrading is gambling BLAH BLAH BLAH I am clueless BLAH BLAH BLAH I lost money therefore trading is just luck

No but seriously, to the OP.



You show lackunderstanding of what TA is and how it is supposed to help a trader to profit.


We could spend all day reviewing the arguments for or against TA, but the point is that it is simply not necessary.

There are traders here or on other social media or at Tradingview (you can check their past calls etc) that have consistently nailed the major BTC moves as they were happening, I have done it myself and it turns out the BTC markets are particularly easy to trade compared to stocks or futures or whatever.

What you are saying is that when people trade they gamble. So they equally lose as they win (unless they are insiders or something).
This is obviously false.


There you go, your arguments against any rational use of TA are bullshit.

Say no to robot porn? :-\

The thing I don't get is plane p0rn.

https://i.imgur.com/fAvrJ.jpg

...getting old, I guess...