Smart money dumb trades

The major issue with 99% of retail, is that they seek tops and bottoms. They watch a video or read a post and DIVE not knowing, or understanding some simple logic.

To be a successful trader you need a level head. As soon as you realise profits are made in a range and not by trying to time market tops and bottoms, there more you succeed. There are thousands of techniques out there, some that have a high hit rate, others that don't, some are complex and some are simple. In instruments such as Bitcoin - you also now have tools such as on chain data. The issue is and will always be, liquidity. Money is made by someone else losing!

Retail will see things like Elliott wave and dismiss it - "ah it's old, ah it's broken, ah I don't get it..." We as humans can find the good, the bad and the ugly with all techniques.

All we are really trying to do is, re-affirm our personal opinions, defending loyalties and find angles to attack anything that is not aligned with our desired outcome. Hindsight equals the ability to explain the past but in doing so, creates an illusion that we "now understand" it all makes sense. People don't understand because they cannot explain it. Regardless of wanting to or not. Our own unique perspective is built on our own unique experiences - trying to make sense of the complicated situation.

The reason I talk about this - is that when you only take snippets of data from one source, or worse, several sources. It's so easy to get confused and mix up your own beliefs. In this current BTC scenario - people are desperate for a bottom to be in. It's all they seek, so when an influencer or educator mumbles the words - bottom, they assume it's to the moon we go. Thus, supporting the personal belief and desire.

Every professional trading strategy, requires confirmation. If the expectation is we rise from here - we need logic as to why? if it is we are likely to drop - then, what's the reason for that drop?

Over the last 2 years, I have made some of my Bitcoin calls public. There is a lot more behind the scenes that does not get posted, so what you should not do is - read a small percentage of a post or watch the first few minutes of a live stream and dive in. Your missing the bigger picture!

This doesn't just apply to my posts - this is in general. This will help you in the long run. You need your own level of understanding for the logic behind the move.

I can show post like this back in March this year;

And the outcome was as predicated -
We grabbed liquidity and dropped seeking a better accumulation range.

I've talked about value areas - this post goes back another year...

The outcome -
For me, it's knowing the "why".

The lesson here - is no obtain a bias of your own. Work on that to see inside the move.

My view is pretty much as I have talked about this last 14-18 months...

We have seen some stopping action.

Now you look out for a range - Obvious liquidity in this zone.

So this is 100% a lesson and not a call. Now look at the range in detail, you will see a fair value level hidden in there.

Same goes for knowing the "why" - as Bitcoin becomes more institutional, it becomes more and more respectful. But as it does, tops and bottoms are still not what your targeting. Look at this from Feb last year from the first rally all time high.

Look at the post date.

These things are playing a game - it's all about understanding the rules.

On the way back up from the low shown in March last year, why would there be evidence for a truncation?
This image was the 24th of August. We go on to climax just above the 65k region...

Liquidity is the name of the game..

This post is the first in the Liquidity series of posts here on @TradingView

Have a great weekend!


Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.