Do you really believe this stuff? I think you'd be much better off focusing on psychology and world events w.r.t. Bitcoin prices. I guess I'm just a TA atheist. If it does work to a limited degree, I think it's probably because there are like minded traders who see the classic patterns and trade accordingly. A self-fulfilling prophecy is born .. and then trashed when the real world (whales, news, etc) comes barging in.
the main problem with trading on 'real-world events' and fundamentals is that it is nearly impossible to determine in a quantifiable way exactly how, and when, these things will affect price.
the beauty of technical analysis is that these indicators are well-tested and calibrated in an attempt to find the underlying trends in the noise of price data. oscillators are surprisingly good at this. take a look at the following, and maybe i can help instill some doubts in your atheistic stance:
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http://s7.postimg.org/4usdnqdgr/beautiful.png===
i haven't drawn in the line, but do you see how well the "ascending triangle" formation in the oscillator tracks the lifespan of the rally?
and perhaps my pictures alone won't sway you. i do have a few things to say in defense of technical analysis, as it is fairly often dismissed around these parts for most of the years i've frequented the forums.
psychology: market psychology and recurrent patterns in price data are one and the same. the main goal technical analysis is to find consistent patterns in data, often which correspond to irrational behavior of market participants like fear and greed, and exploit these patterns. the "ascending triangle" formation in oscillators is an extremely robust pattern for almost every major trend in bitcoin price, and in fact helped me and my subscribers anticipate and track a
nearly identical situation back in April, thereby profiting quite nicely, indeed.
like-minded traders: i hear this one an awful lot. many people seem to believe that the only way TA would work, at all, is via a self-fulfilling prophecy where a bloc of traders responding to the same signals cause the price to follow the patterns they believe that they see. however, in reality, exploiting patterns tends to have a confounding effect on the patterns themselves, in a similar manner to how arbitraging helps correct the market inefficiencies which the practice itself exploits. furthermore, the "like-minded trader hypothesis" assumes that TA-practicing speculators make up most of the volume of market activity, which i highly doubt.
whales and black swan events: this one is the most serious point you bring up. TA fails completely in factoring in the effect of sudden events which have the potential to significantly affect the price. this is mitigated, however, by the fact that very often these factors either amplify or mitigate existing trends and market psychology, as opposed to completely invalidating them. also, the process of pricing-in of new information is generally much more gradual than many traders anticipate (e.g. no price doubling when block reward halves). as for whales, it is safe to assume that large holders mostly consist of "smart money" which tends not to disrupt trends, but rather follow them. in other words, the market, by design, provides a profit incentive for participants
not to violate the underlying mechanisms which allow TA to work.
as for a note on the empirical status of this kind of work, my best efforts have been creating a set of frames of interpretation which maximizes the "agreement" between the data of the various indicators. this comes from the idea that scientific deductions must be able to be determined independently from the data, as in how both the chemistry of the soil of the earth and the properties of gravitational fields simultaneously predict the same theory of planetary formation. i have attempted to demonstrate this property of my work in the excerpt above, demonstrating how the interpretations of the various data encourage the same conclusions. and i can assure you that these interpretations are not ad hoc in order to achieve this illusion, but rather are methods i have used and profited from for more than two years, now. there is no better test than trading with a system
i hope i have better explained why i believe that the methods in the OP are sound.
--arepo
*post edited for clarity
