The Technical Indicator that Matters!

[MatTheCat]

I am a Johnny come lately Bitcoin speculator, getting in on around the 20th November, as Bitcoin was taking out new ATHs on a daily basis.

I have made a decent bit of money, both on the way up, and also on the way down.

On the latest brutal correction however, I mistimed by buy-in tranches horribly ($550) and ended up selling at $490. Had i held another hour or so, I could have broke even, and who knows, maybe in another few hours I could have made a profit. But I didn't. I lost, just like hundreds of thousands of others have lost. I am pretty annoyed with this and now have little appetite for trying to play the crashes and bounces in Bitcoin, of which their are undoubtedly many more to come. I am pissed off, despite the fact that i am still overall around 5K GBP up from under 1 months worth of trading. This makes me think how all those must be feeling who have indeed lost big.

In summation. Sentiment right now must be dropping through the basement and into a bottomless pit. Whilst I am sure that Bitcoin will have a lot of bouncing about to be done and thus further trading opportunities will present themselves, the law of averages in a bear market will dictate that an increasing number of traders/investors will get burned, thus being increasingly more likely to exit from the market, thus driving down the purchasing power, etc etc.

This brings me to the following weekly chart. At the very bottom of the screen, there is the RSI (slow stochastic). If you look back at the boom n crash of April 2013, it can be clearly seen that the RSI hit the roof, scraping along the top of it for a period of time, before hitting the basement and dragging along the bottom for a period of time. At any given point whilst the Slow Stochastic Indicator was scraping along the bottom, would have presented an excellent investment opportunity. Moving along to the Nov/Dec 2013 boom n crash, we can see a very similar pattern forming. For those who lack imagination, I have paintbrushed in the likely path the RSI will take in the near future. Make up your own minds what investment signals this provides.

[GameKyuubi]

It's so hard to say in this market, man.  I've been burned wayyyy too many times in this market, where I would have been fine if I just held.  I'm done day trading.

[dg2010]

Not being funny mate but you are playing the stereotype perfectly. Typical newbie trying to justify their bad decisions with a post telling us how it's all going down to hell because they are butt-hurt that just took a big hit on their holdings. I've been on this forum for a couple years now and I've seen thousands of these posts.

I appreciate you may actually have a clue what you are talking about outside of Bitcoin, but everything I have read from you tells me that you really should not be trying to apply that knowledge to bitcoin, especially not using words like stochastic and analyzing chart patterns. It's no better than reading tea-leaves in a cup.

[T.Stuart]

Never, ever invest in Dundee United.

[humanitee]

It's so hard to say in this market, man.  I've been burned wayyyy too many times in this market, where I would have been fine if I just held.  I'm done day trading.

Not being funny mate but you are playing the stereotype perfectly. Typical newbie trying to justify their bad decisions with a post telling us how it's all going down to hell because they are butt-hurt that just took a big hit on their holdings. I've been on this forum for a couple years now and I've seen thousands of these posts.

I appreciate you may actually have a clue what you are talking about outside of Bitcoin, but everything I have read from you tells me that you really should not be trying to apply that knowledge to bitcoin, especially not using words like stochastic and analyzing chart patterns. It's no better than reading tea-leaves in a cup.

Good job gents, I need not say more.

[T.Stuart]

Sorry. Just joking about Dundee United 

But seriously, just wait a few more days and then invest a bit for the "long" term (one year). Fuck day trading. Then no stress and I think a very good chance to make superb returns on Bitcoin.

[T.Stuart]

Sorry to keep posting but I have to ask, did you really need the money back straight away? Because I think $500 is the real fair price for Bitcoin outside speculation (despite believing it would trade sideways at $700 for a couple of weeks due to speculation). I feel certain that in a few months $500 will seem cheap again.

[MatTheCat]

I appreciate you may actually have a clue what you are talking about outside of Bitcoin, but everything I have read from you tells me that you really should not be trying to apply that knowledge to bitcoin, especially not using words like stochastic and analyzing chart patterns. It's no better than reading tea-leaves in a cup.

You really can't afford to speak.

If I am not mistaken, you are on of those who have been calling bottom all the way down from $900. Are you not embarrassed to even post here?

My calls on the otherhand have been impeccable in terms of forecasting future direction, both on the way up from $400 when I first decided to pile funds into bitcoin and also on the way down from $1150 as I grew increasingly convinced a correction was coming. Sure some of my market timing has been a bit off, such as my very last trade, but overall I am a happy camper. I am ~ 5K GBP richer than I would be had I just stood and watched from the sidelines (as I did April 2013). A pittance to the profits I could have had, had I bit the bullet earlier, but hey, that is life as a Johnny Come Lately for you.

You on the otherhand, if you have been following your own advice, must be down a fkn powder keg by now. Afterall, the 5K GBP that I have must have come out of someone's pocket, perhaps it was yours?

Sorry to keep posting but I have to ask, did you really need the money back straight away? Because I think $500 is the real fair price for Bitcoin outside speculation (despite believing it would trade sideways at $700 for a couple of weeks due to speculation). I feel certain that in a few months $500 will seem cheap again.

As I have stated many times. I hate losing far more than I like winning.

I held my nerve to ride bounce from low $400s, but nasty pennant was forming at sub $500, and looking at every previous example of such a pennant since dive down from $800s gave me all the indications i needed, so I sold and swallowed the loss, in order to perform my #1 trading duty, to preserve my wealth. So happened that this pennant bucked the trend and the price broke instead of down.

Price is now $550 (Bitstamp), although I am still well in profit, I am indeed butt-hurt and have little appetite for day-trading Bitcoin in this environment and I imagine that my sentiment is reflecting that of the majority right now.Lets face it, no matter who you are, if you were 'in' bitcoin, you just lost big. I will now take a backseat and watch how Bitcoin handles China. I will most likely buy back in at some point with a view to holding for the long term, but with the China thing yet to play out, and the charts in the condition that they are in, that time certainly will not be right now, tomorrow, or the day after that.

Wake me up when we go below $200, then I might start scrutinising the charts more closely once again.

P.S. With the talent at Dundee United's disposal at the moment, I would suggest that Dundee United would be a good investment, or as good an investment as any football club can be.

[BitchicksHusband]

I am a Johnny come lately Bitcoin speculator, getting in on around the 20th November, as Bitcoin was taking out new ATHs on a daily basis.

I have made a decent bit of money, both on the way up, and also on the way down.

On the latest brutal correction however, I mistimed by buy-in tranches horribly ($550) and ended up selling at $490. Had i held another hour or so, I could have broke even, and who knows, maybe in another few hours I could have made a profit. But I didn't. I lost, just like hundreds of thousands of others have lost. I am pretty annoyed with this and now have little appetite for trying to play the crashes and bounces in Bitcoin, of which their are undoubtedly many more to come. I am pissed off, despite the fact that i am still overall around 5K GBP up from under 1 months worth of trading. This makes me think how all those must be feeling who have indeed lost big.

In summation. Sentiment right now must be dropping through the basement and into a bottomless pit. Whilst I am sure that Bitcoin will have a lot of bouncing about to be done and thus further trading opportunities will present themselves, the law of averages in a bear market will dictate that an increasing number of traders/investors will get burned, thus being increasingly more likely to exit from the market, thus driving down the purchasing power, etc etc.

This brings me to the following weekly chart. At the very bottom of the screen, there is the RSI (slow stochastic). If you look back at the boom n crash of April 2013, it can be clearly seen that the RSI hit the roof, scraping along the top of it for a period of time, before hitting the basement and dragging along the bottom for a period of time. At any given point whilst the Slow Stochastic Indicator was scraping along the bottom, would have presented an excellent investment opportunity. Moving along to the Nov/Dec 2013 boom n crash, we can see a very similar pattern forming. For those who lack imagination, I have paintbrushed in the likely path the RSI will take in the near future. Make up your own minds what investment signals this provides.

And you had it so together in the last thread about China.  What happened?  I thought you were waiting until all that China money wave 2 killed the price again.  That could still happen you know.

[BitchicksHusband]

Wake me up when we go below $200, then I might start scrutinising the charts more closely once again.

Sure thing, Rip Van Winkle.

[dg2010]

In a thread asking for predictions I made my first 'call' in a long time.... I'm not in the business of making wild claims.

$400 would be my prediction. It might dip lower momentarily but I don't see it going below $400 average for any amount of time.

Today I'm right. Only time will tell if I'm wrong.

I've been buying and spending BTC for years, I see the value, I'm not just here as a pure speculator as you are. I'm in the process of launching a bitcoin related business and will have invested a fair chunk of £ doing so. It's a gamble, so not much different to your trading, the difference is I'm betting on the technology and fundamental value rather than simple fact that it may go UP.

So forgive me if I get a bit aggravated at the newbs that come along having only just heard about Bitcoin getting butthurt because they see it fall from $1200-600 and then start making wild claims just stirring up the FUD. You've made a great point to tell everyone that you are out in every thread, what is the point? At this stage you just look like a fool who took a hit and is crying about it. If you are £5k up I see that as a great positive, you would be better served remembering that fact instead of pandering to your fears and trying to spread it around.

$200? Can't see that happening unless there is a cataclysmic bitcoin event like MTGOX getting hacked or some technical issue with the blockchain etc..  Bitcoin still has a long way to go, personally I think the U.S may just blow the next bubble. Coinbase took $25m in VC funding, the mood in the U.S seems to be quietly positive, these big bubbles hurt the perception but in 6 months we may have forgotten all about yesterday.

[sgbett]

I held my nerve to ride bounce from low $400s, but nasty pennant was forming at sub $500, and looking at every previous example of such a pennant since dive down from $800s gave me all the indications i needed, so I sold and swallowed the loss, in order to perform my #1 trading duty, to preserve my wealth. So happened that this pennant bucked the trend and the price broke instead of down.

My top tip for wealth preservation... don't sell at a loss...

[piramida]

Mat, you suck at trading, admit it and move on. Too emotionally involved, can't think with a calm head, will lose all eventually. /thread

[Wilderness]

Mat, you suck at trading, admit it and move on. Too emotionally involved, can't think with a calm head, will lose all eventually. /thread

yeah I know exactly how you feel but everyone is right, you are obviously emotionally charged about the situation and perhaps placing too much emphasis on feeling like a 'winner' etc

[piramida]

yeah I know exactly how you feel but everyone is right, you are obviously emotionally charged about the situation and perhaps placing too much emphasis on feeling like a 'winner' etc

No, everyone can't be right. You are wrong, for example.

[Wilderness]

yeah I know exactly how you feel but everyone is right, you are obviously emotionally charged about the situation and perhaps placing too much emphasis on feeling like a 'winner' etc

No, everyone can't be right. You are wrong, for example.

I was talking about Mat being emotionally charged, not you keke

[rebuilder]

Comparing RSI to the price development in April on that chart you posted, you'll notice that by the time there was a significant dip on RSI, the crash had already happened and the market didn't slide down much any more. I'm not sure that's very useful data.

[medUSA]

I agree that RSI(?) is a very useful indicator.

IMO, RSI(?) gauges the mood of the market more than anything,
and it is generally a good indicator for buy-ins,
but will not use it as indicator for sell-outs (especially for bitcoins)

[Hunterbunter]

Comparing RSI to the price development in April on that chart you posted, you'll notice that by the time there was a significant dip on RSI, the crash had already happened and the market didn't slide down much any more. I'm not sure that's very useful data.

Yeah it's a lagging indicator, it's only really useful in divergences, and even that is a probability thing.

[HeliKopterBen]

At least you sold when the market went against you, albeit just a whipsaw.  Many traders don't have the guts to do that.