How not to make Rush Trading Decisions

Good morning fellow Cryptionians.

Sorry this is a longer post.

The AUD Market has just open at the time of me starting writing this line 10:07 am Sydney time, and you can see the spike in volume, and a massive red candle. People that say institutional traders don’t exist, as the crypto market is 24/7 can now see how when the different markets open there is extra volatility and price action. In most cases the big move (at the start of the market) is the false move. To capture all of the stop losses that have been moved up, and release that specific liquidity pool. So I expect those massive red candles to turn green in the next 15 minutes or so.

As mentioned on Friday and Saturday, the weekend (especially Sunday) is a time of consolidation. I mentioned that the market was likely to move between $35K and $36K and that is what it did [see from chart 1 – red box]. As shown in CHART 1, where the support of $35K has been respected many times, as mentioned in previous posts.

Now you have to ask yourself why do price range in a channel?

A part of the obvious psychological and emotional barriers that support and resistance offers, one of the main reason is that big players, whatever you want to call them, are trying to add to their position at lower levels. So the short sell the market when it reaches a certain resistance level E.g. $36K (taking advantage of what the rest of the market is thinking, assuming and feeling) and buy back at the point where they want to protect their entry, which is often above the support or just below it e.g. $35K.

To keep the public and small investors and traders in this channel you need to highlight as many bad news or bearish news as possible, and that’s why the market sentiment is also low. You want the populace to be in a state of heighten emotions.

There are 3 analysis: Technical analysis (Chats, indicators, Moving Averages Trends etc), fundamental analysis (Business model, shares, team, life applications, etc) and sentimental analysis (fear & greed). Most individuals that have just entered the market are now doing SENTIMENTAL Analysis, letting their emotions dictate their trading, investing decisions. We all been there, and even most experienced traders and investors succumb often to these impulses. So don’t be dishearten.

The big players, market makers etc… want to keep the market in a state of doubt, fear, hesitation and uncertainty as this is the best way to keep people and the market bound by a certain price range, in a channel. The main reasons for channels are for accumulation purposes.

If people are in doubt, fear and uncertainty it’s easier to make them make impulsive, un-logical trading decisions.To move money from the little guys to the big boys. They know what is happening and truly what direction the market will take, but more importantly they know how to take advantage of people allowing their emotions to dictate their trading decisions.

I follow what the big boys do in the sense that I look at what they are doing by analyzing trends and their buying/selling. Are they buying or are they selling. Well they are buying billions of dollars between $30K and $35K and lately $35K. While the smaller investors are selling and running for the hills.

Why would people with thousands of analysts, experts, in their books, buy at these levels if they were to push the price below $20K or $10K? Why would want to crash the crypto market earlier when at this point we are only $15K above the last 4 year cycle high?

Now some have messaged me saying that I am delusional and that my theories are wrong, and that we are in a full on bear market. Could I be completely wrong? Absolutely. No one is perfect. So we need to be cautious and observe not what we want to believe, but what the market wants to tell us.

If anyone has a better idea, insight or analysis please, please add it to this forum, don’t just complain that I am wrong, help me, and tell me why you believe I am wrong. We are here to help others. We are not here to be right, we are here to be of service to others. 

For those of you that have followed my last few weeks post you can see that my predictions were quite accurate. But this does not means at all that my future prediction will be always right. So please do not sit on a false sense of security.

Please do your own diligence, listen to different points of view, and do not put all of your trust in one expert or analyst. We can all be wrong. I can be wrong.

If in doubt hedge your position, take profits when the market moves up, don’t over exert yourself financially, and understand that the main opponent here is not the market but ourselves, our fears and greed.

Also I am receiving 20, 30 private messages per day, a part from questions on the post, and although I try to answer all, please send messages in the group, as my time is getting smaller and smaller, and I will not be able to answer you personally or review your portfolio, as it’s becoming a full time job. I do care, it’s just that I am time poor at the moment.

As I am typing this line the market is showing massive green candles. I expect this to retest the high $36K and continue to retest the higher resistance levels before trending down to retest the $36k and maybe the $35.5K during the week. If we can gain more momentum we might not have to revisit the $35K. I mentioned that the week will shows us what the market wants to do, and that I was hopeful that we will see a retest of the $38K and maybe even the $40K this week. Is it going to happen? Maybe. Only time will tell.

Could I be completely wrong? Absolutely. No one is perfect. So we need to be cautious and observe not what we want to believe, but what the market wants to tell us.

So let’s see what the market it’s telling up by each single candle and trend at the time.

In trading we have a say…. “If in doubt zoom it out” so if we look a CHART 2 on the weekly time frame, we can see that in 2019 at the start of a new consolidation period and bull cycle that we had a similar pattern in the chart. People were defeated by the massive 83% retracement in 2018 and were beaten up, fearful and uncertain. You can see the TDI starting to go up in chart 2 as well as the stochastic (point B and C) and the similarities between the two.

For me a part of the MACD that is still down, I can see that the TDI is on oversold territory and it’s starting to edge on an angle trending up, meaning I personally expect a reversal on the upside. But as we are still in no man’s land (not in a fully confirmed bull trend or bearish trend) I would been super cautious and if the market moves below the $33K I will have to take safety proportions and move more of my crypto to stable coins like USDT, to see what the market wants to do.

So all the cards are on the table, for now, please try to be patient and observe what the charts are telling us this week, that’s the only fact we can base ourselves on. News can be manipulated, FUD can be created, and future chart analysis can be interpreted in millions of ways. Future chart analysis as well are just predictions and speculation. So look at the price action as it happens.

I hope this post helps. Sorry it was so long.

Much light

Paolo