rpietila Wall Observer - the Quality TA Thread ;)

[wachtwoord]

Usually TA is all abut phsycology and nothing else...

lol usually? Isn't that the entire thesis? Analyzing an manipulating herd behavior with self-fulfilling prophecies?

TA and psychology are quite seperate, unless you are talking about EW analysis which looks beyond the chart. Technical analysis only looks to the chart, and it's not practical to tell psychology from a chart alone.

.. although herd psychology is certainly key. forget the fundamentals, if you can separate yourself from the crowd, you will make money.

Yes, the "charts" are caused by massive herds of people who are "recognizing" patterns they read in a book. These patterns are there in the first place because of people looking for these patterns they read in a book, "recognizing them", trading accordingly and by doing so cause the patterns to begin with.

[chessnut]

Usually TA is all abut phsycology and nothing else...

lol usually? Isn't that the entire thesis? Analyzing an manipulating herd behavior with self-fulfilling prophecies?

TA and psychology are quite seperate, unless you are talking about EW analysis which looks beyond the chart. Technical analysis only looks to the chart, and it's not practical to tell psychology from a chart alone.

.. although herd psychology is certainly key. forget the fundamentals, if you can separate yourself from the crowd, you will make money.

Yes, the "charts" are caused by massive herds of people who are "recognizing" patterns they read in a book. These patterns are there in the first place because of people looking for these patterns they read in a book, "recognizing them", trading accordingly and by doing so cause the patterns to begin with.

markets are not made to be speculative tools, most of the money moving on the market comes from commercial demand, representing fundamentals. In my experience, speculators generally dont agree on the patterns. There is always an ample supply of speculators to somehow sell into support, and buy into resistance. the patterns we see on the market are mostly caused by unaware speculators, foolishly trying to follow the "news" and such.

[wachtwoord]

Usually TA is all abut phsycology and nothing else...

lol usually? Isn't that the entire thesis? Analyzing an manipulating herd behavior with self-fulfilling prophecies?

TA and psychology are quite seperate, unless you are talking about EW analysis which looks beyond the chart. Technical analysis only looks to the chart, and it's not practical to tell psychology from a chart alone.

.. although herd psychology is certainly key. forget the fundamentals, if you can separate yourself from the crowd, you will make money.

Yes, the "charts" are caused by massive herds of people who are "recognizing" patterns they read in a book. These patterns are there in the first place because of people looking for these patterns they read in a book, "recognizing them", trading accordingly and by doing so cause the patterns to begin with.

markets are not made to be speculative tools, most of the money moving on the market comes from commercial demand, representing fundamentals. In my experience, speculators generally dont agree on the patterns. There is always an ample supply of speculators to somehow sell into support, and buy into resistance. the patterns we see on the market are mostly caused by unaware speculators, foolishly trying to follow the "news" and such.

In aggregate they do agree on the patterns

[sidhujag]

Usually TA is all abut phsycology and nothing else...

lol usually? Isn't that the entire thesis? Analyzing an manipulating herd behavior with self-fulfilling prophecies?

TA and psychology are quite seperate, unless you are talking about EW analysis which looks beyond the chart. Technical analysis only looks to the chart, and it's not practical to tell psychology from a chart alone.

.. although herd psychology is certainly key. forget the fundamentals, if you can separate yourself from the crowd, you will make money.

Yes, the "charts" are caused by massive herds of people who are "recognizing" patterns they read in a book. These patterns are there in the first place because of people looking for these patterns they read in a book, "recognizing them", trading accordingly and by doing so cause the patterns to begin with.

markets are not made to be speculative tools, most of the money moving on the market comes from commercial demand, representing fundamentals. In my experience, speculators generally dont agree on the patterns. There is always an ample supply of speculators to somehow sell into support, and buy into resistance. the patterns we see on the market are mostly caused by unaware speculators, foolishly trying to follow the "news" and such.

With such inflated money supply aggregated within top few speculation trading firms it makes sense for me to say that ta and phsycology has become the same thing. Commercial demand is not the leading driver as it once was. This was evidence with the fear driven speculative plays during 2008. Depends on your tf.. zoom out and ta becomes less relevant to speculation and more relevant to fundamentals for key drivers in a market. For our purpose ta usually makes sense in a speculative perception as we are talking about trading here and thus sub weekly tf...

To further drive home my point if you are a commercial producer and wish to hedge your supply on the futures market speculators make most the market. Funny thing is if you wish to buy these contracts it is assumedthey are not for delivery.. but for selling at close. Thus you have to specifically notify the house that you wish to take delivery and use the market as it was itended for but only 1% of the volume is actually doing such things.

Everything is in price.. A market with sufficient liquidity will be equally efficient to factor in news.. unless its a surprise which even the manipulators dont know about. So a good trader will tell you price is everything.. it tells you a story associated with events. Its ez to get it right most of time with little practice but the art of taking hits and knowing when to quit on a trade is tied to your emotional "stableness" that only a few can achieve over long term.. most dont even know it exists and quit without understanding why other than dwindling balance.

[btc6000]

Everything is in price.. A market with sufficient liquidity will be equally efficient to factor in news.. unless its a surprise which even the manipulators dont know about. So a good trader will tell you price is everything.. it tells you a story associated with events. Its ez to get it right most of time with little practice but the art of taking hits and knowing when to quit on a trade is tied to your emotional "stableness" that only a few can achieve over long term.. most dont even know it exists and quit without understanding why other than dwindling balance.

Ah, the good old 'Efficient Market Hypothesis' - written by an academic,  never subjected to scientific scrutiny, criticised from the beginning by economists and now widely discredited.

Cheers,

[wachtwoord]

Everything is in price.. A market with sufficient liquidity will be equally efficient to factor in news.. unless its a surprise which even the manipulators dont know about. So a good trader will tell you price is everything.. it tells you a story associated with events. Its ez to get it right most of time with little practice but the art of taking hits and knowing when to quit on a trade is tied to your emotional "stableness" that only a few can achieve over long term.. most dont even know it exists and quit without understanding why other than dwindling balance.

Ah, the good old 'Efficient Market Hypothesis' - written by an academic,  never subjected to scientific scrutiny, criticised from the beginning by economists and now widely discredited.

Cheers,

Ever heard of Kinder Morgan Energy Partners L.P. (NYSE: KMP) and Kinder Morgan Kinder Morgan Management LLC (NYSE: KMR)? Both represent minority shares in the exact same partnership (with equal weiging) but KMP distributes the dividends in cash and KMR in shares. So, logic dictates that for US taxes holding KMR shares is more tax efficient. Yet KMR has traded at a substantial discount to KMP for a long time (4.5% right now).

The market is inefficient. Deal with it

[rpietila]

Quick TA update (at $0.481):
- 6H candle color/volume: not much volume during this week, conclusion: none/(historically: bearish)
- Bid/ask strengh at market (Bitstamp): slippage to sell 5k: $0.040, slippage to buy: $0.043, conclusion: both sides have built up since last time
- Trendline comparison: we are now at -0.355 log units. The trendline is at $1.090 and rising $0.008 per day, conclusion: rock bottom (note: it is not necessary that 'rock bottom' will change until the parabolic uptrend starts, because the trendline is itself rising)
- Sentiment: n/a
- Prognosis: shortest term unsecure, mid-term not sure if reversal seems confirmed, long-term buy zone

Quick TA update (at $0.460):
- 6H candle color/volume: red candles are taller, conclusion: bearish
- Bid/ask strengh at market (Bitstamp): slippage to sell 5k: $0.040, slippage to buy: $0.056, conclusion: easier to move to the upside
- Trendline comparison: we are now at -0.365 log units. The trendline is at $1.060 and rising $0.007 per day, conclusion: rock bottom (the 12-month range of the trendline is -0.404...+0.518)
- Sentiment: fearish, bearish, conclusion: less downside than generally feared
- Prognosis: shortest term don't know, mid-term not sure if reversal seems confirmed, long-term buy zone

ADD: If sentiment is bearish, it indicated that the price will surprise to the upside, and vice versa.

Quick TA update (at $0.450):
- 6H candle color/volume: GREEN rules for last 5 days, although short, conclusion: slightly bullish
- Bid/ask strengh at market (Bitstamp): slippage to sell 5k: $0.037, slippage to buy: $0.049, conclusion: pressure to the downside, surprise to the upside (when one side has lower figure than the other, it means that price has moved to that direction, eroding the bids/asks - if there is a reversal, it can move quickly to the other side with less resistance)
- Trendline comparison: we are now at -0.384 log units. The trendline is at $1.090 and rising $0.008 per day, conclusion: rock bottom (the 12-month range of the trendline is -0.404...+0.518)
- Sentiment: weak
- Prognosis: shortest term don't know, mid-term not sure if reversal seems confirmed, long-term (3+ months) buy zone

Quick TA update (at $0.429):
- 6H candle color/volume: very little volume for last few days, conclusion: historically bearish
- Bid/ask strengh at market (Bitstamp): slippage to sell 5k: $0.029, slippage to buy: $0.045, conclusion: pressure to the downside, surprise to the upside (when one side has lower figure than the other, it means that price has moved to that direction, eroding the bids/asks - if there is a reversal, it can move quickly to the other side with less resistance)
- Trendline comparison: we are now at -0.420 log units. The trendline is at $1.128 and rising $0.008 per day, conclusion: rock bottom (the 12-month range of the trendline is -0.420...+0.518)
- Sentiment: n/a
- Prognosis: short term risk for downside, mid-term we are still in a downtrend, long-term (3+ months) strong buy zone

[David Rabahy]

The exchange rate is fundamentally driven by emotion at this time.  It's going to take some seriously positive news to break out of this decline.  In my humble opinion the exchange rate could dip to $100-200/BTC at which level either the true believers support it or Bitcoin slides into a long term niche position.  If the core erodes then there's no one left to champion it.  Crossing the chasm into the early majority is not easy/given.  A cohesive and well-executed marketing campaign is the best way to get us there.

[jmw74]

The exchange rate is fundamentally driven by emotion at this time.  It's going to take some seriously positive news to break out of this decline.  In my humble opinion the exchange rate could dip to $100-200/BTC at which level either the true believers support it or Bitcoin slides into a long term niche position.  If the core erodes then there's no one left to champion it.  Crossing the chasm into the early majority is not easy/given.  A cohesive and well-executed marketing campaign is the best way to get us there.

Marketing is the absolutely last thing bitcoin needs. 

Who is going to look at a market that is almost entirely speculation, and say "you know what this needs?  MORE HYPE!"

Bitcoin is so far behind where people expect it to get to, there's no need for it to get further behind by raising more people's expectations.

I believe bitcoin will eventually deliver, but with things like Trezor being delayed indefinitely, it's not going to happen tomorrow.

[David Rabahy]

Oh, that's interesting.  Rather than rushing ahead of ourselves, we need to let the capabilities mature before pressing the message out.  Then we shouldn't be watching the exchange rate minute-by-minute.  That's different than I was thinking.  Thank you.  Hmm, what is our message until then?  When will we know it is time to unveil Bitcoin again for the masses?  Or are the capabilities going to come along one at a time in an uncoordinated fashion?

[pinky]

Marketing is the absolutely last thing bitcoin needs. 

Who is going to look at a market that is almost entirely speculation, and say "you know what this needs?  MORE HYPE!"

Bitcoin is so far behind where people expect it to get to, there's no need for it to get further behind by raising more people's expectations.

I believe bitcoin will eventually deliver, but with things like Trezor being delayed indefinitely, it's not going to happen tomorrow.

+1

Bitcoin needs time to adjust. We had huge gains in the past year and now new services will emerge, because of this, but this takes time. VC poured a lot of money to new companies last year and they were only ideas in the head of enthusiasts, now it's time for engineers to work and deliver new services and make BTC user friendly. Unfortunately you cannot force this to happen.

[shmadz]

Oh, that's interesting.  Rather than rushing ahead of ourselves, we need to let the capabilities mature before pressing the message out.  Then we shouldn't be watching the exchange rate minute-by-minute.  That's different than I was thinking.  Thank you.  Hmm, what is our message until then?  When will we know it is time to unveil Bitcoin again for the masses?  Or are the capabilities going to come along one at a time in an uncoordinated fashion?

I'm in agreement with both jmw74 and pinky on this point. I now cringe when I hear people promoting bitcoin, and when asked myself, all I talk about is the blockchain and how a decentralized ledger can allow for distributed, open accounting and honesty when it comes to financial transactions. (I definitely don't talk about price, payments, vendors, or any of that stuff anymore)


I had heard previously about the adoption "gap" or "chasm" and I didn't understand or believe it, (most likely because this is the first time I have actually been an "early adopter" instead of waiting for the infrastructure to catch up to the technology.)

I think this paragraph explained it well:

Moore's technology adoption lifecycle graph [13] describes how technology enthusiasts and visionaries are the first to embrace a new technology, followed by a frustrating period of time before the pragmatists (early majority) start to utilise the technology, followed by conservatives (late majority) and finally sceptics (laggards).

source: http://www.ariadne.ac.uk/issue65/wolski-richardson

It certainly feels like we are in the middle of the chasm right now, and it is just a matter of time before all the moving parts come together to make bitcoin palatable to the masses... Of course, if we were to fail to cross the chasm and never gain mass adoption, there is a chance that the whole experiment could fail. I think, however, that the ongoing failure of the current system will make the advantages of bitcoin obvious to everyone and the chance of a complete failure becomes decreasingly likely.

[sidhujag]

Everything is in price.. A market with sufficient liquidity will be equally efficient to factor in news.. unless its a surprise which even the manipulators dont know about. So a good trader will tell you price is everything.. it tells you a story associated with events. Its ez to get it right most of time with little practice but the art of taking hits and knowing when to quit on a trade is tied to your emotional "stableness" that only a few can achieve over long term.. most dont even know it exists and quit without understanding why other than dwindling balance.

Ah, the good old 'Efficient Market Hypothesis' - written by an academic,  never subjected to scientific scrutiny, criticised from the beginning by economists and now widely discredited.

Cheers,

I meant from a price disovery pov and not from a general economic health indication. Inefficiencies in price leads to arbs and arbs are always closed leading to efficiency. Ppl with knowledge win..Cant see it discredited when Ive seen it infront of my eyes.

[rpietila]

Quick TA update (at $0.429):
- 6H candle color/volume: very little volume for last few days, conclusion: historically bearish

In this set of indicators, the candle length/color is analyzed so that in the last few days in 6H chart (linked to auto-updating version), you assess whether the majority of the long candles are red or green. The rules are such that:

The longest candle in the last few days dominates the interpretation. We are essentially looking for evidence that it rules the trend.

The candle is locally-longest if it is longer than 3 candles in both sides. The locally-longest candle dominates the said candles in either side of it and they don't count no matter the color.

If the locally-longest candles are all of the same color, it points that the trend is in that direction (buying/selling with volume).

If there are both colors, there is no trend evident, unless one is clearly stronger.

If there are no tall candles, the next move is likely in accordance with the dominant medium-term (weeks) trend, which is currently down.

I decided to open this up, because the current situation is taller red candles combined with low volume since 2014-5-2, and points to a move down next, despite that we are already down.

[Torque]

Oh, that's interesting.  Rather than rushing ahead of ourselves, we need to let the capabilities mature before pressing the message out.  Then we shouldn't be watching the exchange rate minute-by-minute.  That's different than I was thinking.  Thank you.  Hmm, what is our message until then?  When will we know it is time to unveil Bitcoin again for the masses?  Or are the capabilities going to come along one at a time in an uncoordinated fashion?

I'm afraid that usefulness is still lagging far behind current adoption.  We can talk all we want about the current merchant interest level, institutional interest level, etc.  But the fact remains that the "masses" still perceive bitcoin to have limited current usefulness to them.  Other than a few online shops, the places to spend bitcoin are still limited, especially to where the masses go to shop (whether online or brick-and-mortar).  The masses want to be able to make purchases at Amazon, Target, Walmart, IKEA, Starbucks, and their local grocery or store du jour.  They want to buy gas with it, pay their electricity and phone bill with it.  They want to back their 401ks with it, pay their rent with it, buy a car with it.  

Hell, after all these years I still can't even find a coffee shop or bar in my town that accepts bitcoin.  Not one.

Until merchants adopt bitcoin en masse, I'm afraid the "masses" are likely going to sit on the sidelines and wait.

We've still got a long way to go...

[kireinaha]

I'm afraid that usefulness is still lagging far behind current adoption.  We can talk all we want about the current merchant interest level, institutional interest level, etc.  But the fact remains that the "masses" still perceive bitcoin to have limited current usefulness to them.  Other than a few online shops, the places to spend bitcoin are still limited, especially to where the masses go to shop (whether online or brick-and-mortar).  The masses want to be able to make purchases at Amazon, Target, Walmart, IKEA, Starbucks, and their local grocery or store du jour.  They want to buy gas with it, pay their electricity and phone bill with it.  They want to back their 401ks with it, pay their rent with it, buy a car with it.  

Hell, after all these years I still can't even find a coffee shop or bar in my town that accepts bitcoin.  Not one.

Until merchants adopt bitcoin en masse, I'm afraid the "masses" are still going to sit on the sidelines and wait.

We've still got a long way to go...

Seriously, that's how I used to feel, and it's the reason I didn't invest earlier. But you don't get the big picture. People are using bitcoin for a store of wealth -- much like digital gold -- hence the Winklevoss twins assertion of "gold 2.0". The utility of bitcoin in terms of retail growth is nice, but in the whole scheme of things, doesn't really mean shit. Bitcoin's "killer app" is its ease of entry into the investment world. Anyone with a bank account can sign up for an exchange account and be trading within a couple hours. I would wager that 9 out of 10 people here have very little investment experience outside of bitcoin.

[Torque]

I'm afraid that usefulness is still lagging far behind current adoption.  We can talk all we want about the current merchant interest level, institutional interest level, etc.  But the fact remains that the "masses" still perceive bitcoin to have limited current usefulness to them.  Other than a few online shops, the places to spend bitcoin are still limited, especially to where the masses go to shop (whether online or brick-and-mortar).  The masses want to be able to make purchases at Amazon, Target, Walmart, IKEA, Starbucks, and their local grocery or store du jour.  They want to buy gas with it, pay their electricity and phone bill with it.  They want to back their 401ks with it, pay their rent with it, buy a car with it.  

Hell, after all these years I still can't even find a coffee shop or bar in my town that accepts bitcoin.  Not one.

Until merchants adopt bitcoin en masse, I'm afraid the "masses" are still going to sit on the sidelines and wait.

We've still got a long way to go...

Seriously, that's how I used to feel, and it's the reason I didn't invest earlier. But you don't get the big picture. People are using bitcoin for a store of wealth -- much like digital gold -- hence the Winklevoss twins assertion of "gold 2.0". The utility of bitcoin in terms of retail growth is nice, but in the whole scheme of things, doesn't really mean shit. Bitcoin's "killer app" is its ease of entry into the investment world. Anyone with a bank account can sign up for an exchange account and be trading within a couple hours. I would wager that 9 out of 10 people here have very little investment experience outside of bitcoin.

Actually you misunderstand me, I get that picture very well.  I'm HEAVILY invested in bitcoin currently as a store of value, so much so that a 10x increase and I could retire comfortably...FOREVER.  And I'm a permabull.  But that does not negate any of those realities I pointed out in my post about the masses using bitcoin as a daily currency.  I would wager that if bitcoin's ONLY use in life is a store of value, it will have failed in the eyes of many.

[kireinaha]

Actually you misunderstand me, I get that picture very well.  I'm HEAVILY invested in bitcoin currently as a store of value, so much so that a 10x increase and I could retire comfortably...FOREVER.  And I'm a permabull.  But that does not negate any of those realities I pointed out in my post about the masses using bitcoin as a daily currency.  I would wager that if bitcoin's ONLY use in life is a store of value, it will have failed in the eyes of many.

Fair enough, I considered myself heavily invested, but nowhere near able to retire comfortably with a 10x gain. I salute you, sir and good luck.

[Dotto]

How much coins did you buy, Torque, if it is not an indiscretion?

If BTC surpass the 4000USD before 12 months, I could not retire but to get a long lasting wanted caprice, or two, or three =D

[upupup]

Actually you misunderstand me, I get that picture very well.  I'm HEAVILY invested in bitcoin currently as a store of value, so much so that a 10x increase and I could retire comfortably...FOREVER.  And I'm a permabull.  But that does not negate any of those realities I pointed out in my post about the masses using bitcoin as a daily currency.  I would wager that if bitcoin's ONLY use in life is a store of value, it will have failed in the eyes of many.

Fair enough, I considered myself heavily invested, but nowhere near able to retire comfortably with a 10x gain. I salute you, sir and good luck.

Depends how much you need to retire, no?