Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[BitPirate]

I'm going to compare TA to weather forecasting. May not be the perfect example, but I'm not going to spend too much time trying to think of a better one at this time. Weather forecasting is not 100% accurate, and the longer the timeframe the less accurate it is. This is especially true when we consider winter snowstorms for example (for those of us who live in areas where it can snow). I can't count how many times snow was forecasted but when I woke up the next morning, the only snow I found was the dandruff on my pillow.

Thing is, every one still watches the weather forecasts because it is pretty accurate. But forecasts can change. So too with TA. It needs to be constantly monitored. I'm not going to speculate on the accuracy percentage of TA at this time. And, as others have said, I would say it is not as effective when applied to BTC as when applied to APPL for example. But yes, it is still effective when used on BTC. How do I know? Because I made a couple of trades that have made me money and have kept me from being in a losing position. That is why TAs use it, because it provides some kind of basis to forecast prices. I definitely would be clueless regarding BTC potential movements if it weren't for TA. Whenever I see large dumps that cause price to plummet, I'm not confused or surprised. In fact, I'm like "About time." I'm confident that the people who bash TA do so because they don't understand how to use it. It's not all about just lines on a chart either.

It's not the same at all. Not even remotely comparable.

Weather forecasting is running mathematical models through a simulator, looking for convergent outcomes, and assigning probabilities to them. It is mathematics based on science. It is not always accurate -- because that is the nature of probability; and the models can always be improved. The beef you have with weather forecasts may also be more to do with how they are presented rather than the forecast anyway. "48% chance of rain" is much more useful than a picture of rainclouds over your city.

On the other hand, technical analysis is based on the assumption that markets are predictable in behaviour due to regular patterns in aggregate human emotion. TAs will tell you that they are modelling market emotion. However they are not -- you will never see any such model presented. Rather they are using patterns in historical price and volume to predict future price and volume. Usually based on premises (such as Eliott Wave) that are 100 years old.

You will see lots of fancy indicators -- however they are all based on the same raw data: historical trades (There is no other data available). They are not even remotely modelling the underlying users and markets at play. You almost never see any TA that attempts to model the reasons for rises and falls. They treat price falls due to bad news, technical glitches, and manipulation equally, assuming that the average market participant knows nothing of the underlying causes too. This may have been (somewhat) useful for Wall St. a century ago, but to an Internet currency in 2013? Really?

Finally, another way that TA and weather forecasting is different... consider this. If TA could even remotely accurately model behaviour, the behaviour itself wouldn't happen and the price wouldn't move. This is the key as to why TA is effectively worthless. Is the TA influencing the market, or the other way around? Read around and you will soon realise it is the former. TAs are only market oracles to their herd of market sheep. Can't you see yourself how your last paragraph is testament to this fact?

[ChartBuddy]

[drdanishkhan]

I'm going to compare TA to weather forecasting. May not be the perfect example, but I'm not going to spend too much time trying to think of a better one at this time. Weather forecasting is not 100% accurate, and the longer the timeframe the less accurate it is. This is especially true when we consider winter snowstorms for example (for those of us who live in areas where it can snow). I can't count how many times snow was forecasted but when I woke up the next morning, the only snow I found was the dandruff on my pillow.

Thing is, every one still watches the weather forecasts because it is pretty accurate. But forecasts can change. So too with TA. It needs to be constantly monitored. I'm not going to speculate on the accuracy percentage of TA at this time. And, as others have said, I would say it is not as effective when applied to BTC as when applied to APPL for example. But yes, it is still effective when used on BTC. How do I know? Because I made a couple of trades that have made me money and have kept me from being in a losing position. That is why TAs use it, because it provides some kind of basis to forecast prices. I definitely would be clueless regarding BTC potential movements if it weren't for TA. Whenever I see large dumps that cause price to plummet, I'm not confused or surprised. In fact, I'm like "About time." I'm confident that the people who bash TA do so because they don't understand how to use it. It's not all about just lines on a chart either.

Maybe you feel its usefull because you made profit based on that TA.. you know a psychological factor.. But mostly i have to agree that its just a broken clock that tells the correct time atleast once a day.. 

[ChartBuddy]

[seleme]

most people thought I was insane when I went all in on BTC at $3 and quit my job and mined with 50 computers, slept 2 hours a night and trolled this forum 20 hours a day.

Muahahhaah I showed them who is crazy! muahhahahaha~

You remember, not a week before my current developments, I asked an asylum from you. I saw it coming.

Well, I am sure everything is in the hand of God. My entry point was also $3, before the drop to $2.

I very much remember a post in which you said you acquired your stash in October 2012. Now you say 2011?

He's been caught in saying bullshit and lies so many times it's pointless to remind him at all.

I was always saying he needs a help and I'm happy he is getting it now (if that's true too, you never know with him)

[betaknight]

got another joker flashing a bid for 1000btc @ 100.00 ... either it's bull bait or we're about to see some fireworks during the Euro session..

[ChartBuddy]

[Dumbastronaut]

Puuuuuuuuuuuuuuuush

[Frozenlock]

Someone's trading his own BTCs again and again, probably to boost volume.

Just so you know...

Edit: That or a bot war gone bad. 

[ChartBuddy]

[naima53]

http://www.kommersant.ru/doc/2213241
Favorite magazine Russian entrepreneurs (business). Number 1 in Russia in the subject of business.

[Miz4r]

It's not the same at all.

Weather forecasting is running mathematical models through a simulator, looking for convergent outcomes, and assigning probabilities to them. It is mathematics based on science. It is not always accurate -- that is the nature of probability; and the models can always be improved.

Technical analysis is based on the assumption that markets are predictable in behaviour. TAs will tell you that they are modelling market emotion. However they are not -- you will never see any such model presented. Rather they are using patterns in historical price and volume to predict future price and volume. Usually based on premises (such as Eliott Wave) that are 100 years old.

You will see lots of fancy indicators -- however they are all based on the same raw data: historical trades (There is no other data available). They are not even remotely modelling the underlying users and markets at play.

Finally, another way that TA and weather forecasting is different... consider this. If TA could even remotely accurately model behaviour, the behaviour itself wouldn't happen and the price wouldn't move. This is the key as to why TA is effectively worthless. Is the TA influencing the market, or the other way around? Read around and you will soon realise it is the former. TAs are only market oracles to their herd of market sheep.

Yes, comparing TA to weather forecasting was a bad example, as you have described.

TA is not effectively worthless, as you have stated, because I have used TA to make profitable trades. If I did not use TA, I would be stuck in a losing trade right now.

You don't know that. It could be simply luck, maybe there are just as many people making losing trades using their TA but only the profitable ones will post here about the wonders of it.

Successful traders use it every day to make money trading stocks, commodities, and currencies. I don't understand how you can say it's worthless. You have people on Wall Street, working for immensely profitable institutions such as Goldman Sachs and Morgan Stanley, and their only job is to trade. These companies recruit from universities such as Harvard, Yale, you name it. And what do they teach them? TA. What do they use to trade? TA. These hotshot traders make those trades with TA and bring in the dough and help make these banks rich. Why would GS hire traders and teach them TA if it was worthless?

Perhaps TA only works when enough people use it and interpret it the same way? If you get enough sheep to follow your method it will automatically become a succesful trading strategy. Not so sure if that's the case in bitcoin, it's kind of a different creature with lots of inexperienced traders who stubbornly follow their own method like myself.

[naima53]

I saw the topic here. You have in the country, too, has published an article in the magazine that week. Strange coincidence, as if manipulating the news reporters at the time the points of support or resistance.

[Spaceman_Spiff]

Thanks for the history lesson.  Hadn't fulfilled my 'learn something new everyday' quotum yet  .

Sorry -- i'm into that stuff myself (the gear, not the history)

I wasn't being sarcastic, I genuinely found it interesting  .

[ChartBuddy]

[Its About Sharing]

It's not the same at all.

Weather forecasting is running mathematical models through a simulator, looking for convergent outcomes, and assigning probabilities to them. It is mathematics based on science. It is not always accurate -- that is the nature of probability; and the models can always be improved.

Technical analysis is based on the assumption that markets are predictable in behaviour. TAs will tell you that they are modelling market emotion. However they are not -- you will never see any such model presented. Rather they are using patterns in historical price and volume to predict future price and volume. Usually based on premises (such as Eliott Wave) that are 100 years old.

You will see lots of fancy indicators -- however they are all based on the same raw data: historical trades (There is no other data available). They are not even remotely modelling the underlying users and markets at play.

Finally, another way that TA and weather forecasting is different... consider this. If TA could even remotely accurately model behaviour, the behaviour itself wouldn't happen and the price wouldn't move. This is the key as to why TA is effectively worthless. Is the TA influencing the market, or the other way around? Read around and you will soon realise it is the former. TAs are only market oracles to their herd of market sheep.

Yes, comparing TA to weather forecasting was a bad example, as you have described.

TA is not effectively worthless, as you have stated, because I have used TA to make profitable trades. If I did not use TA, I would be stuck in a losing trade right now.

You don't know that. It could be simply luck, maybe there are just as many people making losing trades using their TA but only the profitable ones will post here about the wonders of it.

Successful traders use it every day to make money trading stocks, commodities, and currencies. I don't understand how you can say it's worthless. You have people on Wall Street, working for immensely profitable institutions such as Goldman Sachs and Morgan Stanley, and their only job is to trade. These companies recruit from universities such as Harvard, Yale, you name it. And what do they teach them? TA. What do they use to trade? TA. These hotshot traders make those trades with TA and bring in the dough and help make these banks rich. Why would GS hire traders and teach them TA if it was worthless?

Perhaps TA only works when enough people use it and interpret it the same way? If you get enough sheep to follow your method it will automatically become a succesful trading strategy. Not so sure if that's the case in bitcoin, it's kind of a different creature with lots of inexperienced traders who stubbornly follow their own method like myself.

First, let me say relying just on TA with BTC is risky but I do use it a lot.
TA for sure works. That is not really the question, the question is how often and how accurately. Looking at my (past) record, I'd say it works more times than not and a lot better than guessing. That has been proven over many many years.
If anyone thinks TA doesn't work I'd say you have to try it for a few months after learning it pretty well (spending a couple hundred hours studying and practicing).

To define how it works, that is a tough one. The underlying things we see in a chart are composed of many variables (e.g. emotion, economics, fundamentals (yes!), etc.)

So, I use TA but with BTC I am a lot more careful with it as a lot of BTC is driven on sentiment (aka The world situation). We could be going down fairly hard and if another country pulls a Cyprus - BOOM UP. And vice versa in a sense. But I think all of us know that, the thing is, the world is a tough place today. Some currencies/economies are getting closer and closer to collapse by all accounts and to me, that will be the real determiner - after all it is in large part why BTC is where it is.

[10c]

Yeaaah i am not on the forum all the time like you sarc.. i have patients to deal with.. but seriously has any of the TA ever proven correct??

It's 100% correct 30% of the time.

heads = up
tails = down

It's 100% correct 50% of the time.
plus you leveraged time; not having to do TA
 

[thoughtfan]

The mtgox:bitstamp 24hr USD volume ratio is about the lowest I've seen at the moment at around 2.6.  I know this tends to happen when volumes are low but would be interested to know if there is a chart showing total volume and volume differences over time to see if what looks like a trend to me checking in at irregular intervals is borne out by the facts.  Anyone?

[10c]

First, let me say relying just on TA with BTC is risky but I do use it a lot.
TA for sure works. That is not really the question, the question is how often and how accurately. Looking at my (past) record, I'd say it works more times than not and a lot better than guessing. That has been proven over many many years.
If anyone thinks TA doesn't work I'd say you have to try it for a few months after learning it pretty well (spending a couple hundred hours studying and practicing).

To define how it works, that is a tough one. The underlying things we see in a chart are composed of many variables (e.g. emotion, economics, fundamentals (yes!), etc.)

So, I use TA but with BTC I am a lot more careful with it as a lot of BTC is driven on sentiment (aka The world situation). We could be going down fairly hard and if another country pulls a Cyprus - BOOM UP. And vice versa in a sense. But I think all of us know that, the thing is, the world is a tough place today. Some currencies/economies are getting closer and closer to collapse by all accounts and to me, that will be the real determiner - after all it is in large part why BTC is where it is.

Unless you get consistant results above the 50% marker, TA has no added value in BTC and a coin toss suffises.
if you only get 30% and don't consider it the process to get above the 50% marker no value is added.
you hit the nail on the head that BTC is mostly emotion driven. It is not backed by anything then (fragile) trust.
If you have ALL the parameters you can use TA effectively. Marketcap is small and whales are big, reducing your chances of success.
Just keep that in mind.

[4mherewego]

The dollar is too volatile to be useful for comparing BTC:s value, this chart says it all: