Do any of you remember the game Top Trumps from the 80s? Giving it a quick google this morning I can see it is still alive and well, though in a rather more modern form.
The basic idea of the game is that each card has a total value which when compared to the opponent's card either 'trumps' it or not. I am thinking of this game in this moment because the more I learn about trading the more I see that each level the price is approaching has a kind of total value which when opposed by the price either holds it back or doesn't. One of the most important things in trading is recognising support & resistance levels at which there is basically a little battle taking place between longs & shorts. And this battle does not end until one side is victorious and the price can continue.
Trading is a rigged game
The thing about markets is that they rely on people who don't know what they are doing. Only in this way can the big players take from the small players at key moments. So we are still playing Top Trumps but one group has access to cards with special powers, while the other group does not. At least not until they figure out what they are doing! This is possible because these special cards (data) cannot be found on the charts themselves which are provided for free by companies like Trading View. The sad reality is that newcomers spend all their time trying to figure out future price action based on these charts alone. While the professional traders pay a monthly fee to receive extra data from other sites in order that they can keep on winning against those with a worse hand than them (less data), time and time again.
Exocharts
I don't want to get too complex in this post but here is some of that missing data, in this case provided by a company called Exocharts, to whom I now pay $30 a month.
You can see net longs vs net shorts (along with delta clusters and open interest):
You can see a sessions template which permits one to look at the London, New York & Asia time sessions (because these have a huge effect on the price of bitcoin).
A TPO chart amongst other things is useful for finding points of control & areas of swift movement into zones known as single prints.
Footprint charts permit us to see if we are finding acceptance above or below resistance & support levels, while also helping us identify bullish or bearish divergences.
And finally we have this volume profile chart which permits us to see the point of control for each day/week/month etc.
This chart is particularly useful because the first time these points of control are touched there is almost always a reaction. Looking at the chart above we can see the red line extended out to the right. This is telling us there is a "naked" daily point of control here and if the price comes up to this line you can expect a reaction at the very least, often a full blown reversal. Particularly when you have confluence at these levels. This means other factors which line up to indicate a reaction here.
And this my friends is like having a Top Trump in your hands!
Take yesterday's price action for example.
We were ranging between the two daily naked points of control (marked here as Daily nPOC).
They are only visible on my Trading View chart because I have marked them there from my Exochart data yesterday morning.
So with this extra data I had the confidence to enter a short position from the top followed by a long from the bottom.
In this case I had extra confidence because the Daily nPOC lines have confluence with the 0.618 retracement areas from each pivot.
This combined with an excessive amount of longs at the top and excessive amount of shorts at the bottom provided the rocket fuel to propel price in the direction most people are betting against.
Five hours into my long position I had taken 80% of my profits (leaving 20% just in case we keep going up).
And last night I was able to go to sleep without any fear of waking up to a loss, which trust me, having been an amateur trader for over five years, is a very enjoyable feeling.
My Trading Journey
Since discovering crypto markets back in 2016 I have been trying to increase my holdings by buying & selling at the correct moments and for the most part I have lost money, time and time again. Because as I mentioned above, this game is rigged!
I am a Stonehill however and when I set my mind on a goal (in this case to be a confident trader) I find it extremely hard to accept failure as an option. Most traders stop trading in the end because they lose so much money and unlike any other job in the world you can sit there for hours, days or even months without ever making anything at all. On the contrary, your efforts are rewarded only with losses and psychologically speaking this can be extremely draining. Trust me, I know.
But as I mentioned, I not one for giving up on my dreams and so for the last few months have been a member of a trading group known as Chart Champions which offers courses and regular updates on price action. It is primarily dedicated to education and does not give signals, so please don't sign up expecting an easy ride. It is in fact extremely hard work and you will keep losing money until you have put in the time.
One year ago I made some posts about how easy it was to leverage trade (this was nothing more than beginners luck in fact!) and I am conscious that some of you took my lead and jumped into the markets, only to figure out as I did, we are not holding the Top Trump cards!
I appologise for that and to rectify my wrongdoing I will try instead to offer trading education here from time to time in dedicated posts. If you are new to this game and keen to learn more I strongly suggest watching the free modules on the Chart Champions website. And if these films excite you, I recommend signing up to the group as a Contender (£97.00 per Month) and working your way through the remainder of the modules. This will take you many months and I recommend resisting the urge to do anything other than paper trading until you have watched these modules at least twice.
The head honcho of our group is a man called Daniel who seems to me like one of the most confident traders in the world, a billionaire for sure. But he is also very humble and rather than putting his feet up on a desert island in the tropics he has instead dedicated his life to helping others and teaching his techniques so that like him, we can enjoy consistent success in the wonderful world of trading.
Follow Daniel (and sometimes other members of the team) on YouTube here:
I leave you now with this shot of my desk and the final thought that it doesn't matter to confident traders whether the market is trending up or trending down. Money can be made from both.
This is very important because NO ONE knows with 100% certainty what the market will do in the future, so even if Bitcoin continues pulling back for the next three years, I will not (as was the case during the last bear market) feel in any way bothered by this.
Indeed, I will finally be free from that niggling sensation that I am in the shit if Bitcoin doesn't keep going up!
For what it's worth, I personally don't think the bull market is over, having not yet seen the blow-off top for which Bitcoin is known. We may yet drop down to re-test our old ATH at 20k before bouncing back to life and should we come down to these levels, you can be sure that like Daniel I will be looking for a long.
Never forget, great traders are buying exactly when you are selling!
Love & Light everyone 🌱