Monkeys: Don't do trend analysis! (with poll)

[Darker45]

Okay, the above examples are for stocks, but it should be somewhat applicable to the cryptocurrency market. What do you think?

While I am not really a fan of technical analyses as I am not really convinced of their accuracy, I don't think that a random dart throw is more or less the same.

If you want to try out this random dart throwing in the wide crypto market, say, which coin is worth investing in the following week, or which price range is better for buy or selling, or whether it is buying or selling time right now, the tendency is that you are going to end up losing.

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[Hydrogen]

Why does this thing happen? Well, there is a theory called "Random Walk Theory."

Post 2008 financial crisis, there was an attempt made at forensics to distinguish primary causes of the meltdown. One of the observations made during this time was industry standard financial software emulating brownian motion in physics to randomize the future behavior of consumers and markets.

The projected future behavior of consumers and markets being randomized created a type of observational blind spot where some consumers would be projected to buy while others sold. But never in a timeframe where they all bought or sold simultaneously, which would precipitate large market rises or crashes. This led to software utilized in the financial industry being unable to predict the subprime mortgage crash. So it was claimed anyway.

Everything said about random walk theory and related content would appear to be new age ideology of MMT - modern monetary theory.

[mu_enrico]

^Thanks for mention the Brownian motion (not about the software thingy lul). Trend analysis lovers might want to learn about the stochastic process, doesn't have to be deep since it's mainly mathematics.

Nevertheless, even with Geometric Brownian Motion (GBM) plus Monte Carlo Simulation (MCS), the results still fall within probabilities.

The horror is that perhaps the analysts who were beaten by the random darts already use the stochastic process, not just a mere trend analysis.

[Eugenar]

If you've watched a chart for long enough you'll know where it's going next. TA for Hull and bear flags and repeat patterns also make it possible to have a pretty clear idea.

Also depending on how they traded is going to change things. If it was equities, while in a bull market, most are going to follow the trend.. If you just keep longing at 3x leverage for example, even in crashes you won't lose anything...

But given this market is lacking consistency, making a prediction will not be a help. It is one's freedom to share his thoughts and speculations but I just cannot see the essence of doing so because the market is inconsistent, a pattern may be formed but that doesn't give assurance of what could happen next. We should expect the unexpected because that is how this market behave. A market price could go up continuously but could also fall down in an instant. Same thing when the market price is falling, the other way around could take place.

[el kaka22]

You can talk about any method you want but bitcoin doesn't apply to any of them at all, the other things like gold or stocks or even forex could use those things because there are regulations and overseeing branches of governments and even LOGIC we do not have.

However in crypto things are too wild, we could have bitcoin 30k in a week or 5k and both could be equally possible, do not get me wrong if we are 5k in a week people would be super bummed about it and would be sad and upset but nobody could say that it is impossible, same goes with 30k, that wouldn't be impossible neither that will happen too and people would believe it as well and would be super happy about it. I doubt that people could say the same thing about all other investment stuff.

[wxa7115]

I would not trust the random walk theory with my money, nor with a risky investment like Bitcoin (you need to know when it's good time to invest). I'd give a good example, the pattern Bitcoin price usual takes after a halving is a prediction with a premise somewhat, a shrewd investor will rather follow that path, accumulating before the halving and waiting for the next 6-12 months to see if the pattern repeats itself, it very well could/could not, but what I know is it's an Investment that's based on a pattern that has been experienced before, chances are higher of it pulling through.

This is called seasonal trading and it is a very effective way to trade, just to give another example everyone knows that during the winter companies need more oil and a standard movement by those that trade that asset is to begin to buy it during autumn and then sell it when most companies are close to fulfilling their needs for oil, and we can see many examples of this during our everyday lives, for example we can see Halloween pumpkins in October in the supermarket and not in any other month because as we know the demand for those kind of pumpkins skyrockets during that time of the year.

And obviously bitcoin also follows seasonal trading because we know in advance when the halving will happen and smart investors will buy bitcoin months before the event hoping that it goes up in value after the halving takes place.

[Hemady17]

Yes we can predict price.

 Can we do it with any degree of accuracy? 

Yes but only about 1 second in advance.

Only few person can predict it with accuracy. However, there is no consistent prediction to a person because anytime bitcoin fluctuates. This is the reason why most of the signal or technical analyst said a price with boundaries. Buying from a boundary and selling to a target price seems to be the accurate prediction we can take right now.

Many people have already know that bitcoin may fluctuate higher at the end of this year or next year. But we can't imagine yet where it will place. Does bitcoin reach ATH? WHO KNOWS.

[mu_enrico]

The result:

Yes   - 9 (56.3%)
No   - 6 (37.5%)
I don't know   - 1 (6.3%)
Total Voters: 16

The question is, from those nine analysts, how many of you correctly predict that the price will be dump to the $10k level?

[milewilda]

The result:

Yes   - 9 (56.3%)
No   - 6 (37.5%)
I don't know   - 1 (6.3%)
Total Voters: 16

The question is, from those nine analysts, how many of you correctly predict that the price will be dump to the $10k level?

I would like to know as well on how they do consider it out on having such precision on using up analysis.I cant deny nor disagree that they dont work but we know that each decision we do made
just really have that 50% chance of succeeding neither it would go up or down as we do able to enter the market.Im sure that 99% didnt really anticipate that we would be heading down on 10k
again yet most of peoples perception or feeling is already on talking in levels of 13k as we break that 12k barrier but it seems this isnt still the right time for such price.I do make use of technicals
but im not really that relying when it comes to precision yet market is always been unpredictable and even to those so-called expert or pros then they are just typical speculators also.