Arepo's Detailed Price Analysis and Projections

[arepo]

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Quote from: arepo on 20:01:44, 27 April 2013

you guys are fools if you think we're going to break $120 any time soon.
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thanks for the accountability. i qualified this failed prediction a few posts ago:

Broke out the wrong way  

Again stop using triangles dammit.

why not? the breakout was anticipated perfectly, the direction not so much. working on an accountability report right now, trying to determine the factors that contributed to the failure of the last projection.

--arepo

I could save you some time - someone dumped 10k coins, and some others dumped 2 x 5000 earlier. People were not buying in masses in meantime.

That's it, I should patent a name for it, DUMPA20000 or something  

yes, i was watching, and it was clear that the dump was a single or a few entities, not an emergent movement. there's a lot of bearish news in the air, and the market is short-term overbought. i'm trying to determine if we should expect $120 to hold, or if we're gearing up for a correction-to-the-correction of the bullish move to $165. i highly suspect these individuals were attempting to 'paint the tape', as a very bullish consolidation turned very suddenly into a very bearish picture. this event will be good to consider in another problem i'm working on, can/does price manipulation break standard methods of TA?.

--arepo

notme also added his (very valuable) 2-cents:

Artificially increasing the volatility will only transfer money from them to me.  There are lots of other market makers that feel the same.  In the long run, it will make no difference.

However, this is an excellent example of why no TA is perfect (I know you don't believe this yourself arepo, just picking a teaching moment for new traders).  People will do what they want despite what any sane trader would say about the chart. This is because many trade bitcoin who do not understand how to use short time frame TA properly: to make a planned trade more efficiently.  Using it speculatively is very risky when you look at short time frames.

--arepo

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[arepo]

midterm projections still on track:

based on some fractal analysis, the lowest feasible bottom is around $90. i suspect that's where the support will be if we break $120.

it's amazing, but we're still 'consolidating' in huge, week-long swings from the 10 April crash:

-===-



-===-

modeling this with the classic triangle consolidation pattern, we get a similar picture, but unfortunately, it's difficult to tell what the slope of the bottom support is. if it is a flat-bottomed triangle, then $90 will be the support (yellow line); if it is a symmetrical triangle, we may see prices even lower (white line) before we reach the short-term bottom.

what are you guys anticipating?

--arepo

[johnblaze]

that triangle is just LOL
wow

[arepo]

that triangle is just LOL
wow

upper line has two points of contact, lower line is pure speculation. 'LOL' isn't exactly constructive

--arepo

[evolve]

I expect a continuation of the downward trend.

[johnblaze]

that triangle is just LOL
wow

upper line has two points of contact, lower line is pure speculation. 'LOL' isn't exactly constructive

--arepo

because there is nothing constructive about TA, even if you did it correctly. but you are just drawing random lines

but dont worry, you can chalk up losses to "overtrading" or "lack of discipline" like Mark Douglas and all the other failure TA traders

[arepo]

I expect a continuation of the downward trend.

very good, i notice that bear pennant, too. we will break out down.

but everyone is still screaming BUBBLE and none of my data seriously suggests that we'll break below $90 in the mid-term. any other arguments for this besides that?

[arepo]

because there is nothing constructive about TA, even if you did it correctly. but you are just drawing random lines

but dont worry, you can chalk up losses to "overtrading" or "lack of discipline" like Mark Douglas and all the other failure TA traders

there are many others threads on this board dedicated to the question of whether or not methods of TA can be considered 'effective'. if you'd like to have that conversation, you can continue it there, or at least supply some kind of new argumentation besides the bald assertion that it doesn't work because it doesn't.

as i said before (i'd hate to be the tyrant who self-moderates) so discussion and presentation of TA ITT please. (assertions don't count as discussion )

--arepo

edit: it's hilarious how quiet this thread was as my many projections last week unfolded, but as soon as i get one thing wrong, the TA-naysayers are back

[lewicki]

that triangle is just LOL
wow

upper line has two points of contact, lower line is pure speculation. 'LOL' isn't exactly constructive

--arepo

because there is nothing constructive about TA, even if you did it correctly. but you are just drawing random lines

but dont worry, you can chalk up losses to "overtrading" or "lack of discipline" like Mark Douglas and all the other failure TA traders

There is a method to the madness however. Because everyone - whether they would like to believe it or not - when they look at a chart, see patterns and associate something with them based on some prior experience, etc. As a consequence, the pattern comes to fruition, and the people that saw the pattern and decided to hold/sell/buy wrote their own future. TA, at least in my opinion, to a certain extent comes down to math and the psychological aspect of trying to figure out what everyone else is thinking about before they know it themselves.

[arepo]

because there is nothing constructive about TA, even if you did it correctly. but you are just drawing random lines

but dont worry, you can chalk up losses to "overtrading" or "lack of discipline" like Mark Douglas and all the other failure TA traders

There is a method to the madness however. Because everyone - whether they would like to believe it or not - when they look at a chart, see patterns and associate something with them based on some prior experience, etc. As a consequence, the pattern comes to fruition, and the people that saw the pattern and decided to hold/sell/buy wrote their own future. TA, at least in my opinion, to a certain extent comes down to math and the psychological aspect of trying to figure out what everyone else is thinking about before they know it themselves.

good point -- as i like to say, if there are methods that work, they can be considered functional analysis. if there aren't, why is everyone here wasting their time with a cointoss? there's satoshidice for that

i think the bear market is rustling all the newbies' jimmies

[arepo]

*10-day hourly scale*



-===-

looking awfully oversold on the short-term scale. the downward momentum has been exhausted. i expect a downwards breakout from the pennant evolve outlined, but we won't break under the $100 support.

-===-

-===-

instead, the oversold signal confirms some fractal analysis that suggests we'll retest but bounce significantly into a larger bearish pennant, peaking and then breaking downwards again to test the $100 support in the next 48 hours.

-===-



-===-

will $100 hold then is not yet clear.

--arepo

[johnblaze]

There is a method to the madness however. Because everyone - whether they would like to believe it or not - when they look at a chart, see patterns and associate something with them based on some prior experience, etc. As a consequence, the pattern comes to fruition, and the people that saw the pattern and decided to hold/sell/buy wrote their own future. TA, at least in my opinion, to a certain extent comes down to math and the psychological aspect of trying to figure out what everyone else is thinking about before they know it themselves.

this would make sense, if two things were true:

1. the majority of the trading volume was made up from people using TA
2. the TA that they used were all the same

i reckon that neither of those two are true. 1. is pretty straightforward. most of the volume in the markets is pure speculation and/or silkroad, not from people looking at charts and making disciplined trades. 2. is blatantly not true, as you can easily open up any two TA threads in this forum and find hacked up charts with wildly differing lines drawn at the most random places

it is a good thought though, and definitely the correct line of thinking. but even if it were true as you said, and even if those 2 points above were present, then the prediction and trade would be working because everyone is taking action in the same direction, and hence moving the market. it would be the same as calling everyone up and saying, "ok we all buy at $100." the trade would not be working because of some magical TA strategy that works when X indicator crosses Y indicator or because Z line of support or because of ABC head and shoulders and cock and balls pattern.

[notme]

*10-day hourly scale*

http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxUSD&SubmitButton=Draw&r=10&i=Hourly&c=0&s=&e=&Prev=&Next=&t=S&b=&a1=&m1=10&a2=&m2=25&x=1&i1=CCI&i2=&i3=&i4=&v=1&cv=0&ps=0&l=1&p=0&

-===-

looking awfully oversold on the short-term scale. the downward momentum has been exhausted. i expect a downwards breakout from the pennant notme outlined, but we won't break under the $100 support.

-===-

http://i43.tinypic.com/10xvzpd.png

-===-

instead, the oversold signal confirms some fractal analysis that suggests we'll retest but bounce significantly into a larger bearish pennant, peaking and then breaking downwards again to test the $100 support in the next 48 hours.

-===-

http://s3.postimg.org/ouzptactv/bounce.png

-===-

will $100 hold then is not yet clear.

--arepo

I didn't outline any pennants, but it looks good so far with the bounce to $118.

[arepo]

I didn't outline any pennants, but it looks good so far with the bounce to $118.

sorry about that, i must have just read a post of yours when i was writing that. at least i didn't name electric -- he hates triangles hah

edited in the original

--

i always find it fascinating how many layers of self-similarity there are in the price function. this is the third 'public test' of fractal analysis, which i'm a little suspicious of because it is lacking in rigor in that it is just as prone to apophenia as elliot waves. i've been outlining a number of shapes that i can define in rigorous terms, and once that list is complete i intend to do statistical analysis on price history data to hone the method's precision.

until then i've been focussing on the 'bubble shape', a type of bearish reversal that occurs across varying scales in many bullruns in bitcoin price history. i've identified three versions of this pattern in price data since just April 1, and used their shape with great success in anticipating price movements in similar market conditions. it's just an amazing idea that the larger shape of price can mimic smaller structures that have already formed within its history, exactly like a mandelbrot set!

since the 'fractal hypothesis' is still in its infancy, i encourage feedback from the sharper minds of the community i've learned so much from other posters here, that i've come to see it as a community of very intelligent people, and an excellent collaborative atmosphere for new ideas,

--arepo

[arepo]

this would make sense, if two things were true:

1. the majority of the trading volume was made up from people using TA
2. the TA that they used were all the same

i reckon that neither of those two are true. 1. is pretty straightforward. most of the volume in the markets is pure speculation and/or silkroad, not from people looking at charts and making disciplined trades. 2. is blatantly not true, as you can easily open up any two TA threads in this forum and find hacked up charts with wildly differing lines drawn at the most random places

keeping it short, but hopefully clear:

the effects of 'insider trading' suggest that price-relevant information is not factored into the price in an ideal way, but the Efficient Market Hypothesis suggests that most relevant information is 'encoded into' or somehow represented in price -- this information including market sentiment, greed/fear, risk-aversiveness of other players, and the like.

this leads to the idea that profitable information asymmetries between players can form for short periods of time.

from a mathematical point of view, it has been shown (see the Hurst exponent) that autocorrelations exist in price data -- that is, regularities which can be profitably anticipated.

as such, in a simple way, technical analysis is an analysis done on price data to find patterns -- essentially, identifying how the price is deviating from its natural stochastic (random) nature.

and this demonstrably occurs! trend-following is very successful in certain market conditions (see goomboo's journal). this leads to the idea of 'momentum', that it is statistically unlikely for the price to suddenly violate a trend. another simple strategy is measuring the 'rate of change' of price, because 'momentum changes before price changes' follows from basic rules of derivatives in calculus.

i hope i have showed you how it is possible to get at information that may be 'coded' into the price, that others do not have access to, that creates a profitable information asymmetry between players.

--arepo

[johnblaze]

i have no idea what that block of rambling is suppose to prove, other than to convince yourself that your methods have validity. it was not clear at all what point you were trying to make, and it was irrelevant to the disucssion:

my post was in response to the post claiming that TA works because it is a self fulfilling prophecy. while the premise is sound, in practice, most don't do TA, and those who do, don't do TA exactly the same, so it cannot self-fulfill.

anyway

i hope i have showed you how it is possible to get at information that may be 'coded' into the price, that others do not have access to, that creates a profitable information asymmetry between players.

you have not shown that. i have reread your post a few times trying to figure out what your point is in case i'm missing something, but it seems like you are just throwing together random stuff together to try to support your claim.

reminds me of this quote which is wayyyyyy ironic

"The trend is evident to a man who has an open mind and reasonably clear sight, for it is never wise for a speculator to fit his facts to his theories."
-Jesse Livermore - Reminiscences of a Stock Operator

[notme]

i have no idea what that block of rambling is suppose to prove, other than to convince yourself that your methods have validity. it was not clear at all what point you were trying to make, and it was irrelevant to the disucssion:

my post was in response to the post claiming that TA works because it is a self fulfilling prophecy. while the premise is sound, in practice, most don't do TA, and those who do, don't do TA exactly the same, so it cannot self-fulfill.

anyway

i hope i have showed you how it is possible to get at information that may be 'coded' into the price, that others do not have access to, that creates a profitable information asymmetry between players.

you have not shown that. i have reread your post a few times trying to figure out what your point is in case i'm missing something, but it seems like you are just throwing together random stuff together to try to support your claim.

reminds me of this quote which is wayyyyyy ironic

"The trend is evident to a man who has an open mind and reasonably clear sight, for it is never wise for a speculator to fit his facts to his theories."
-Jesse Livermore - Reminiscences of a Stock Operator

Maybe try looking up some of the terminology you don't understand.  It's pretty clear to me.

[johnblaze]

i understand all of the terminology. i dont understand what point he is trying to make.

at one point he claims that prices are random and that is their nature, which is a joke of a claim. then he claims that he can find "coded" information in previous prices. confusingly, he also used similar terms when trying to spout the EMH, which is contradictory

get off the bandwagon, and on your bike

but if its clear to you, please feel free to clarify his point for us all so we can have a real discussion

[notme]

i understand all of the terminology. i dont understand what point he is trying to make.

at one point he claims that prices are random and that is their nature, which is a joke of a claim. then he claims that he can find "coded" information in previous prices. confusingly, he also used similar terms when trying to spout the EMH, which is contradictory

get off the bandwagon, and on your bike

I'm not on a bandwagon, just tired of people coming to an analysis thread to complain about analysis  Never take any advice in these forums without a few pounds of salt.

[johnblaze]

I'm not on a bandwagon, just tired of people coming to an analysis thread to complain about analysis

not here to complain, just saw some posts in the other thread so decided to check out what was going on in here. i made one comment "LOL" and he asked me to stop, so i did. then i responded to another guy who came to a legitimate conclusion, but was just not practical

btw i made an edit to the previous post, inviting you to start a real discussion if you understand his point. perhaps you can clarify for us

Never take any advice in these forums without a few pounds of salt.

indeed