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Why You Should Never 'HODL' Your Positions Up To A Certain PointHello Traders. Here I give a friendly reminder to all beginners and advanced traders that holding (hodl'ing) your position is not ideal up to a certain point. The math of percentages shows that as losses get larger (compound interest), the return necessary to recover to break-even increases at a much faster rate. A loss of 10 percent necessitates an 11 percent gain to recover - and that is where it goes all downhill. Increase that loss to 20 percent and it takes a 25 percent gain to get back to break-even. A 50 percent loss requires a 100 percent gain to recover and an 80 percent loss necessitates 400 percent in gains to get back to where the investment value started. Investors who get hit by a bear market need to be aware that it will take a while to recover, but the math of compounding returns will help the cause. Consider a bear market with a 30 percent drop in value, down to 70 percent of what the stock portfolio was worth. A 10 percent gain returns the portfolio to 77 percent. The next 10 percent recovers to 84.7 percent. Two more 10 percent gain years put the portfolio back to 102.5 percent of the value before the drop. So a 30 percent drop necessitates a 42 percent recovery, but 10 percent a year compounded for four years puts the account back into profitable territory. I will be doing a second part to this post on the idea of "DOLLAR COST AVERAGING" (DCA). What the math of stock market losses shows best is that investors need to protect themselves against big losses as shown in the diagram above. Mental or limit based stop-loss orders to sell stocks or cryptocurrencies are there for a reason. When a certain loss level is reached, it will pay off big if the market is moving into bear market territory. Investors sometimes have trouble selling stock they like at a loss, but they will like the stock or cryptocurrency if it can be bought back at a lower price. If you are interested in how to create the perfect trading plan, please see my previous post here: Trade Safe. X Force
Editors' picks
BITSTAMP:BTCUSDEducation
by XForceGlobal
262
BTC: When and How Will Bitcoin Dump? NVT Suggests Warning SignalHello Traders. After yesterday's mildly successful pump, we were again met with a strong rejection off of the prior double top - now creating a triple top. What does this mean? Well, it can mean a lot of things, but let's leave all of the technical analysis behind and find one other way to find the tops in terms of price action. I would like to introduce to you the 'NVT' Indicator (Network Value Transaction Value). This indicator is particularly interesting to me due to the fact that it has either called for consolidation, or, retracement within the timeline. One thing for sure is, if it does consolidate, we can see that it eventually leads to a retracement. What is the NVT Signal? Predicting bubbles in any sort of market is not easy whatsoever, but, with more data indicators rising on the horizon, we can start pulling data in all sorts of ways to find the 'relative tops'. Now, I chose this NVT indicator due it's relative simplicity in visualization, but complex calculations of the market. But for the sake of the post, I will only show it from a visual perspective to show how it works instead of going into all of the calculations. The NVT indicator (also known as the NVT ratio) became popular after Bitcoin printed the All-Time High last December 2017. There was no prior data nor any way to predict the bottom of the Bitcoin market due to it's price discovery to the general public; however, one indicator that was able to predict the 'relative top' was the NVT - which existed back then. Standard NVT Ratio is simply the Network Valuation divided by the Transaction Value flowing through the blockchain and then smoothed using a moving average (MA). As we can see, the past few years has also shown that the NVT indicator was proven extremely useful. What we can pull from this data is that although this indicator proves usefulness in calling tops, we can also now use this as some form warning signal when the NVT goes into the yellow territory on the oscillator. To break it down, we are seeing two types of indications: 1. We can be in some form of 'consolidation' phase, 2. We can be in some form of 'retracement' (dump) phase. This alone, proves that this indicator is more than enough to use as a trading indicator, considering all factors of the market. These are not the only ways to trade the NVT indicator. I’m sure a seasoned trader could come up with some additional ways to trade it and decipher the indicator in a better way. Trade Safe. X Force IF you like my posts, please hit the like button and follow! Thank you.
BITSTAMP:BTCUSD
by XForceGlobal
12
Long term view - Bitcoin forming massive triangle. Liftoff 2023.Bitcoin is currently printing a massive triangle formation... you need to see the forest, not just the trees. Bitcoin will keep consolidating until breakout. I know it's not what you want to hear, as it's still some time away, but long term weekly chart shows that this should occur mid-2023 and in the meantime you should be able to consistently scalp for the next 2 years. Buy on lows, sell on peaks, and make sure you're holding your coins by 2023 for liftoff of the new bullcycle. I welcome all rebuttal and comments of any kind.
BITSTAMP:BTCUSDLong
by diego-d
Bitcoin's Two Year Forecast - "When Should I Buy Bitcoin?"As Biden suggested, "It is a time for healing." - I believe it is absolutely true for a time of healing in all aspects of the world, including Bitcoin. What is the Stock to flow? (about this indicator) As suggested by the creator of this indicator, 'PlanB' : " SF = stock / flow . Stock is the size of the existing stockpiles or reserve. Flow is the yearly production." In simple terms: Stock = How many Bitcoins are currently in circulation Flow = How many Bitcoins are created each year ---------- Here I would like to explain the observations based on my own - these are the FIVE main phases of price action: 1. Price Halving Event 2. Price Discovery Phase 3. Price Continuity 4. Price Explosion / Blowoff Top 5. Price Maturity Without getting too much into the mathematical details and formulas on how this indicator was created, this is a perfect indicator, in my opinion, to show the overall observation of where Bitcoin stands from a visualized perspective, where it shows that Bitcoin can withstand anything in any certain period of time. The first and foremost, Bitcoin has not only have we survived the harshest conditions of the market for 2020 (and 2018 alike), Bitcoin's fundamentals are getting incredibly stronger by the day; furthermore, Bitcoin is now collectively seen as a form of investment tool and regarded by many as one of the best returning assets of the decade. I believe the next decade is yet to offer more when the fundamentals of Bitcoin is much clearer and clears up the issue of scalability and overall issues with price maturity. The most important aspect of this chart is to find where you can start investing Bitcoin . This answers the million dollar question of, "When can I buy Bitcoin?" The answer is NOW, according to this indicator. Why and based on what evidence? First, history is not indicative of the present price action, however, it does certainly rhyme with it. We can note that with each consecutive rise, it was usually after the halving events of Bitcoin . As we are now approaching into 2021, we are now putting our first step into the uncharted territory of new price discovery . Despite the heightened level of volatility in the market, I believe it's important to emphasize that long term investors are unlikely to be fazed by the recent drop - especially after the 2020 events. The current short-term holder activity is reminiscent of previous bull trends, and if we are able to survive 2020, how can we not survive 2021-2022. As such, if BTC recovers strongly from the recent drop, the chances of a rally continuation could increase. What will you do? We hope that you are able to be disciplined this time and learn from the past mistakes of every year, and it is increasingly showing that we are well on our way to new uncharted territories of ATH .
BITSTAMP:BTCUSDEducation
by XForceGlobal
15
BTC: Alternative Bearish Case DOES Exist! - DOJI TutorialHere, we would like to discuss the bearish scenario. My job is to make sure that everyone has an understanding of both sides of the spectrum when looking at the market. In this analysis, we will be looking at the higher 1D timeframe, as it is now showing strong resistance - we have now reached a key milestone resistance at $16,000. This is now the make or break moment for bulls to break this key area. This won't come with ease - that is why I mentioned it is important to be level minded when the market is euphoric. As a disclaimer, this is merely a pattern and not indicating price targets. This is purely an educational post. We are also seeing an "EXTREME GREED" on the crypto fear and greed index, which may indicate a strong sell signal for many bears. Remember, this index never existed prior to the 2018 crash. The more the market has access to these types of information, the smarter the market becomes. This is why an instant ride to 20K may not come as quickly as we may think. It's important to be a contrarian here! Technicals: The long legged doji pattern is an extremely classic pattern that can be traded wisely if done correctly. We can see the pattern form when the wick on both ends of the body is large - this is indicative of two equally strong forces but in opposition to each other. It thus reflects indecision - that is it. When a long legged doji forms during strong downtrends or uptrends, it means that there is a move towards equilibrium between supply and demand . In such a scenario, there are strong indications of the trend reversing. For instance, when the long legged doji candle appears during a bullish trend , there might be a reversal. The buying pressure grows stronger initially but soon, there is fear of a reversal of trend, and traders start selling positions, which leads to a drop in price. There sia tug of war between two pressures, ie, buying and selling, and eventually the closing price gets pushed back to the level of the opening price. For my bullish post, please check out the short term BULLISH analysis!
BITSTAMP:BTCUSDShort
by XForceGlobal
14
BTC: How to Trade Bull Flag Pattern Right Now | Flag TutorialBull Flag : A bull flag forms in bullish trending markets - and we may be entering one of the biggest bull markets after 2018. After a strong bullish movement when this pattern forms. it signals the market that the price is likely to move higher via continuation patterns. A continuation pattern is a measured move (please see the chart above on the left). How to identify and Trade Bull Flags : It is quite easy to identify a bull flag - actually probably one of the most simplest of all patterns to trade as long as you know which market you are in. A bear flag is vice versa and works in bear markets, but since we are in a bull market by general public sentiment - we will revisit this pattern soon. you just need to look for a Bullish Vertical Rally or Trend which is Pole of the Flag then identify the consolidation which will look like either horizontal channel or downward channel which will be the Flag. After identifying the pattern you can enter at the bottom of the flag or you can enter when price breaks out of the upper trendline of the flag which is more safe (safer). The breakout may also be a possible FAKEOUT which is why we will take help of Volume and RSI Indicator to confirm the breakout - but again, we are focusing only on the pattern. An invalidation is also shown above in the chart. ( *Key things to know : If the retracement of the measured Flag Pole retraces more than 50% of the pattern, it becomes weak and it may not be a Flag Pattern but sometimes it stays valid if it breakouts above the uppertrend of the flag.) Stay Tuned for More! 👍 Like this tutorial & share your comment below!
Editors' picks
BITSTAMP:BTCUSDLong
by XForceGlobal
7
The two most two likely scenarios for BTCSince we closed above the 2019 highs, it is very unlikely that we fall back below that levels again, at least not in the immediate short term. It seems obvious that we move higher. But it would be equally unlikely that we wouldn't re-test those levels in the near future. The question is now, from where we might retrace. The RSI is still looking good and leaves more space to the upside, so from my point of view, scenario B seems more plausible. Looking forward to your comments.
Long
by senolito
BTC: A New Possible Bitcoin Narrative (But There's a Catch)Hello traders, here I would like to take a moment to explain why the markets do not move in straight lines. This is an observation and a theory, not a prediction. As we have seen a series of phenomenal fundamental bullish news this year alone, this does not mean that the market will go straight to $20,000. It can, but remember, the market is smarter than it was back in 2018. Dumb money is not circulating within the market as we speak, rather, we are seeing a series of healthy higher lows and a possible cup and handle pattern that may lead us to higher lows rather than dumb money completely dominating the market. Here is my post on healthy vs unhealthy bull runs (we are currently in a healthy bull market!): The balance of fundamental and technical analysis is playing a crucial role in the price of Bitcoin and the market is heavily matured than it was previously, especially with the introduction of leveraged markets and somewhat regulated exchanges prohibiting the exponential growth of Bitcoin. We can speculate all we want, but it's important to start approaching the market from a realistic perspective. As much as I would love to see Bitcoin go into the year 2021 with a price mark above $20,000, I find it highly unrealistic and the probabilities of it lies in the hands of the general public; however, one evidence suggested from Google Keyword Trends is showing that we have nowhere near the amount of public interest compared to the year 2018. I believe more and more that the market lengthening cycle is at play here and unless your neighbors are talking about buying Bitcoin, this market is currently playing with 'recycled' money. No technical analysis was proven for the year 2018, and no technical analysis proved the COVID-19 drop - as both of them were fundamentally driven. Here is a clear example of what I am talking about in my previous analysis, where I talk about the market lengthening cycle theory: We are also seeing a strong correlation between the stock market and DXY (the US dollar). The US dollar is now playing an extremely big role within the market, and each step of the way we find new ways to understand Bitcoin's real price action, and the US dollar negative correlation is one example. Here is my previous post on the USD and BTC value correlation: With that being said, putting all of our fundamental analysis aside, here I would like to present to you one of the most common technical patterns that may be starting to show: the 'Cup and Handle' pattern theory. The cup and handle pattern is formed after the price moves sharply in an upwards direction, after which the market begins to sell off and the price retraces slightly, helping to form the ‘cup’ section of the pattern. This gives a 'rounded bottom' appearance, similar to that of a bowl. As the price continues on up, it retraces once again, this time more gradually, forming the 'handle' section of the pattern. Finally, it then makes a continuation move upwards beyond the initial high of the first move. Trade Safe. X Force
BITSTAMP:BTCUSDLong
by XForceGlobal
69
BTC: Understanding Healthy vs Unhealthy Bull RunsHello traders and investors, here I would like to compare and contrast the stark differences between a healthy and unhealthy bull run. I would like to dissect the 2019 bull run vs the 2020 bull run, as there is one major difference that I would like to focus on in terms of the differences of the two bull runs. The first thing that we can witness from 2019 is that we saw an incredible 300%+ bull run. This is no doubt an incredible feat for Bitcoin during that time, but it was merely impossible to know when to enter the market with no confirmation in sight. We have seen a series of higher highs being printed, with no real pullback until the end of the blowoff top where most have entered. After the real pullback, most were probably entering the market thinking it was going to go higher, which wasn't the case as we were seeing a series of bearish confirmations and sell signals from our lagging indicators and a bearish descending triangle. The second thing that we can witness from the current 2020 bull run is that it is much more extended and simply a matured bull run, especially taking into account of direct stock market correlations and the on-and-off decoupling of different assets. This year has brought interesting and new concepts of how the bull market is running, especially with the series of uneventful news such as the unfortunate COVID19 pandemic (my prayers are out for everyone to be safe!) and now the election cycle in place. In my opinion, this is actually one of the most healthiest bull runs we have had with all things considered. The fact that Bitcoin has responded to all negative news and events from 2020, the fundamental news of Bitcoin and the store of value idea is being shown within the price action. We are also technically seeing a higher low with each consecutive pullback, which is absolutely fantastic from a bullish perspective. Now the underlying question remains, "when should I enter the market?" Based on confirmations, we can enter safely when Bitcoin consolidates when we create a new 'higher low', possibly in the upper $9,000 to $12,000 range for the longer perspective. Remember, Bitcoin can still have impulse waves in between, but the overall point is making sure you are riding the 'waves' of the market, not the impulse waves. Trade Safe. X Force
BITSTAMP:BTCUSDEducation
by XForceGlobal
20
Trading Hierarchy: What Really Matters in TradingHello traders, these past few weeks have been incredibly profitable for many traders (and many losses as well)! Here I would like to show you an investor philosophy that I always trade by when approaching the market. Many people approach technical analysis thinking it's the first and foremost thing they must learn, which in reality, should be the last. It's crucial to first understand that trading psychology and risk management is the MOST important factor when trading within the market. Even if you have strong technical analysis (which can never be perfect), you can lose if you have BAD risk management. You can lose even more if you are no patient enough and trade EMOTIONALLY. The sad reality is, many professionals who have traded for years, still have yet to realize this. I hope this small educational post shines light onto advanced and beginner traders. Everyday, I am witnessing traders who are making money not knowing why, or losing money not knowing why. One thing that I always like to advocate is that it's better to know why you lost a trade, rather than not knowing why you made money in a good trade. These are realistic expectations of the market, there is no simple magic pill in technical analysis . Trade Safe. X Force
BITSTAMP:BTCUSDEducation
by XForceGlobal
34
ridethepig | BTC Market Commentary 2020.10.21📌 What have we got in play here? On the news flow Paypal does matter but it was expected and is done at the right time if you ask me. I mean the retrace here will be healthy, to trap the late buyers who are unaware thinking its non-stop-moon while also opening an attack on the previous breakout traders at $11,500. A positional play. Sellers can now work on the profit taking and arrive on the support for nothing less than a retest. The long term view remains intact but it is also extremely obvious that we are set for another flush before the elections.
BITMEX:BTCUSD.PShort
by ridethepig
3
ridethepig | BTC Market Commentary 2020.10.20📌 Bitcoin - October 2020 Well done those still holding longs in what has been a rather slow but simple grind higher. Buyers could have developed quicker according to the flow models but we maintained flexibility. Next comes the wave 3 target at $12,364. And buyers are not particularly favourable to break through without a retrace. The correct course is to take some profits and reload from cheaper levels. Rinse and repeat. And now, I present the whole macro flow chart, because of the log-chart breakout it is a good example of how even strong hands and advanced players are frequently unable to understand the core strategy. Thanks as usual for keeping the feedback coming 👍 or 👎
BITMEX:BTCUSD.PLong
by ridethepig
4
BTC: Diamond Pattern: Possible Drop Soon - How To Trade!Here we dissect a very debatable and uncommon technical pattern: the Diamond Pattern. The Diamond Pattern is essentially what it means, a diamond shaped pattern that is seen visually within the price action. A diamond pattern is usually created within the charts when we see an extreme high and a quick sell off due to the uncertainty between both the bulls and bears, both trying to claim territory. After the high point has been created, we usually see a brief moment of trading within the means of the support line created before the high extremity. As this pattern is not a clear technical pattern, it's still considered by many a breakout pattern in the technical analysis world, where many traders will start racking up shorts or longs to bet on the direction of the breakout. We can see that although it is a coin flip, we can still slightly get better odds of where the price will go via the current technical standpoint in the price action. This means that we currently have more bearish evidence, and due to that bearish evidence, we can bet that the pattern will break down. Why? 1. We are trading right above the CME gap, and the gap ends at $11,000. If broken, we can easily see $10,800 as a measured move. 2. According to our previous analysis on Bitcoin ("Support Turned Resistance"), we are seeing that Bitcoin is still trading below key support, which is now considered resistance. The breakdown of the diamond appears when the price goes through the lower right side upward sloping trend line, and this is what constitutes the 'breakout'. To calculate the current breakout for this diamond formation, you will want to take the distance between the highest and lowest point in the actual diamond pattern and add it to the breakdown point - this can be considered the actual minimum and full target. Trade Safe. X Force
BITSTAMP:BTCUSDShort
by XForceGlobal
4
Bitcoin: A Long Term Market Analysis - Full Market Cycle OutlookHere we dissect the past, current, and potential future growth of Bitcoin. I am uploading this chart because there seems to be an influx of charts predicting that Bitcoin is going straight to $100,000 by EOY, which is viable, but absolutely low in probability. This chart is showing a possible realistic case for Bitcoin , every phase of the way divided by each Bitcoin halving for an easier understanding of the cycles of Bitcoin . This also takes into consideration for support and resistance lines that is linear within the logarithmic chart. The best way to interpret Bitcoin's price action is via the logarithmic chart which shows the overall square root function of each cycle. Simply put, realistically, the log chart is slowing down on the longer timescale, meaning that Bitcoin is now possibly entering its fourth phase as shown in the chart - price maturity. Price maturity is shown in most stock models, meaning that markets do not move in straight lines. This chart also helps support the 'lengthening market cycle' theory, which is based on how fast growth of a stock is shown. Bitcoin cannot just continue to grow exponentially. This would lead to incredibly inflated prices that brings Bitcoin into uncharted territories. As stated above, the cause of these growth cycles are the Bitcoin halvings, which leads to a supply shock and a subsequent rally. As history has shown that with a lower supply, the demand for the coins go higher, meaning that the fundamental value of Bitcoin may go down, and now becomes more of a 'Store of Value' asset, just like gold . Although this chart is just an observation and educated guess, we can still assume that this chart is realistic and a probable scenario as it is calculated with a balance of market psychology, technicals, and overall market cycle theories. Even the monthly chart can be seen as a minuscule timeframe and we have to take this day by day, timeframe by timeframe. We can most definitely see lower prices and from a longer perspective, anything below 100,000 USD is still considered a great buy for Bitcoin , as many will start to understand that Bitcoin is becoming an investment. Trade Safe. X Force
Editors' picks
BNC:BLX
by XForceGlobal
55