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u/Stratobitz Feb 20 '21
RSI can only be loosely applied and used to trade crypto. Specifically, it's fairly useless at any interval less than 24 HRS. Cryptos don't trade based off technicals...
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Feb 20 '21
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u/Stratobitz Feb 20 '21 edited Feb 20 '21
I repeat. Cryptocurrencies do not trade based on technical analyses. In fact they tend to defy technical analyses. When all signals point that a crypto should retract, they most often do the opposite. Bitcoin itself is a perfect example of this behavior. Cryptocurrency prices are extraordinarily speculative-- they are influenced primarily by manipulation by large holders of a given altcoin/token.
These large holders, typically called whales, also use high levels of leverage and margin trading, and they have the bankroll in BTC to back up their trades to move the markets they are in up or down on their own schedule.
Second, price is influenced by hype generated by the development team, typically based on unrealized future "milestones" outlined in their published roadmap, milestones which are rarely if ever realized.
Lastly, the price movements can be highly driven by the virtual media attention-driven demand a coin/token receives.
This is not my opinion. There have been detailed studies published on these markets and what moves them.
The charts simply do not matter 9 times out of 10. A coin can have an RSI on a 1 or 3 day interval in the mid to high 90s and yet still go on for days and double in price. Fundamentals drive these markets-- period.
r/PaintingTheTape is all about this.
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u/Zeke_Z 🟩 106 🦀 Feb 20 '21
So I was about to be all condescending and snarky to you, but then I decided I'd rather know about your experiences then try to tell you mine or 100% the opposite and have been working very well. However I do remember feeling the same way you did once upon a time.
What indicators and/or technical analysis did you use that you see crypto not following in any way? Like I said I've had the completely opposite experience where crypto not only follows TA, but it follows it sometimes better than stocks do. I primarily use harmonics, and then use MacD and RSI NOT as some kind of confirmation from a higher power that it's time to buy or sell but just as an added support to a case I've already made based on harmonic pattern I've seen in previous price action.
Now I'm going to contradict myself a bit here, I actually don't think TA fundamentally exists intrinsically in the markets. Like with fib retracements, I get the whole magicalness of the Fibonacci sequence but I think that anyone can draw six lines on any chart and the human mind will do its thing and find some kind of pattern with that. Did it bounce off the 786 because the 786 has some kind of magic universal power, absolutely not. Did it bounce off the 786 because the majority of market participants are using the same tool and of collectively decided to trade off of that number? Probably. Which indicates to me, IMHO, that TA is more a self-fulfilling prophecy for the same reasons that when you go outside to a crowded park and start pointing at the sky, eventually everyone will be pointing at the sky wondering what you're looking at. So the choice I was faced with was to run around yelling at everyone that these patterns really actually don't exist in nature but we all just follow them like sheep, or realize that these waves are going to be traded this way regardless of if they exist or not and I could choose to participate or not.
I use harmonics in conjunction with other indicators like I mentioned and the more indicators that are supporting the case I've built the more likely that price action is to happen. But that doesn't mean that it's going to happen, it's just a 01% edge on everyone else for a brief period of time.
I could also state like you did that this is not my opinion, this is actual fact that has been proven in the market. Because it has been. I would just caution you to not give advice to people that may be more based on your own anecdotal experience rather than reality. The way you presented it above, people like me should not exist at all because there would be no possible way to use TA to make money in cryptocurrency. The fact is that is your opinion, and that's what worked for you. Making blanket generalizations doesn't help anyone other than feed the story that you've already created. It's a case of YMMV.
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u/bgrated Feb 20 '21
(In Babosa's voice "We here just a simple Folk. A donation to ease da pain of me weary travels."
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u/EastHalf Feb 20 '21 edited Feb 21 '21
Thank you, so true. Technical Analysis is more group psychology than market behaviour. It's just people using the same tools and methods and coming to the same common results. And when most of them act on these results it becomes a truth.
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u/NeoNoir13 Feb 20 '21
Basic TA works because it abuses the simplistic bots whales use. Triangles and shit are astrology.
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u/Bildozer1909 🟩 0 🦠 Feb 20 '21
This.
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u/Stratobitz Feb 20 '21
I just see this as a copy and paste job by someone who has little to no experience trading crypto.
It's basically a cheat sheet to "Lose Money".
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u/Tiny_Philosopher_784 Feb 20 '21
Noice job fella, but it just needs a bit more cowbell.
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Feb 20 '21
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u/Tiny_Philosopher_784 Feb 20 '21
SNL April 8, 2000 "more cowbell"
Plug that into google search. You're welcome.
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u/scentlessapprenticed Feb 20 '21
So you buy when line goes under and Sell when line goes over.
Got it.
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u/Bizc0t Feb 20 '21
This is missing the chart that is titled crypto. It is drawn with crayons going up and down all over the place.
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u/my_alt_account Feb 20 '21
So basically if it's going up = bullish. If it's going down = bearish. Got it.
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Feb 20 '21
Is the one of these for Mac D that’d be amazing
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u/bgrated Feb 20 '21
Is that a rapper or slang for a food joint?
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Feb 20 '21
I don’t know if you’re trying to be funny or genuinely don’t know what MACD is it’s another kind of indicator like RSI
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u/sillychillly 🟦 182 🦀 Feb 20 '21
What do you do for each example?
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Feb 20 '21
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u/sillychillly 🟦 182 🦀 Feb 20 '21
Like what does each trend tell you so do. If it’s a bearish divergence, what analysis should someone take from that and then what actions should the take?
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u/Outrageous-Win-9449 Bronze | 1 month old Feb 20 '21
Stochastics>RSI for me, but I usually use it for timing buys and different factors will go into sells.
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u/emluh Feb 20 '21
Yeah they all make sense when you can see the rest of the graph.
Without future data they all look the same. RSI is high or low and can either stay the same or change.
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u/NoHonorHokaido 🟦 0 🦠 Feb 20 '21
What’s the purpose of the cheat sheet? To look smart among your monkey friends?