Ever seen the TV show LOST? Welcome to Bitcoin

31 mars 2018

If it were possible to describe BTC movement like a tv show, I would use the whole series of "Lost" as the reference. What is happening? This makes no sense?? Are the characters in purgatory? That polar bear came out of nowhere. WTF?

I like to think of trading bitcoin as everybody in the world vs one major player (whale/exchange?). There may be some other whales joining in, but ultimately one person/entity is controlling the price on the shorter time frames. That's why you will do T/A and expect certain price movement, and then BAM! Out of nowhere an influx of volume for no apparent reason. Identifying the give away patterns/behaviour that this whale's bots are using is a good way to start making trades off their trades. On free accounts, BFXdata can provide MACD and a few other indicators, plus the order books/trades. It helps to use BFXdata in conjunction with Tradingview for short term trades.

If people are interested in knowing what patterns I have learned after watching BFXdata for pretty much the equivalent hours of the entire series of Lost, I can share. For example, what is commonly the immediate price action following a hidden order buying or selling copious amounts of btc?
More likes = more indication that knowledge is desired.

Lines galore, but colour coding works.

Bright green - current trend channel
Dark green - strong support
Pink - strongest resistance/support
Orange - strong resistance/support
Purple - previous support (now broken)

31 mars 2018

Note

Well, two likes is better than no likes. So here is one component of my BFX data knowledge:

The whale probably has multiple accounts, each operating their own bot or bots. One team of bots sells and the other buys. They are likely working from a single server which is calculating every transaction between all the bots in real time, with a small lag time when either waiting for market reaction, human instruction processing, or calculating totals after a determined time period.

What do the bots know:
* They know that the idea is to accumulate everyone else's bitcoin/money.
* They know how the main indicators work. They don't use them because they don't need to visualise them, but they know that everybody else uses them and so are calculated by the bot server to be taken into account with every trade strategy.
* They know that candles are significant to humans and so the movement of price in each minute ultimately determines the direction of the trend.
* They know that humans make decisions based on the closure of candles on certain time frames. For example 1 day, 4 hour, 2 hour, 1 hour, 30 min, 15 min, 5 min, 1 min. More weight is given to candles closing on bigger time frames.
* They know that market psychology ultimately drives the humans.

Volume
When the whale wants the price to go down, it will accumulate over x amount of time and then sell at market price in large volumes. Same goes for upwards movements. When the bot wants to control the descent or climb of the price, the opposing bots will enter orders at the desired levels, which results in a more staggered movement, and can be likened to a turbo boost at each level. If there is very little overall volume, ie around 400 - 800 btc traded per hour, the bots will initiate a large volume dump or buy depending on the immediate trend. This is probably because they are no longer accumulating other people's bitcoin and are just buying and selling their own (to each other). By making a big move, they can clear out stops while at the same time jump starting a FOMO buy or panic sell, which brings other traders into the market and subsequently allows the whale bots to begin accumulating again. If the jump start is unsuccessful in bringing in other traders, the bot will begin opposite movement to the jump start attempts. This happens after an undetermined amount of time, though likely takes into consideration overall volume and how many btc/dollars it started with at the beginning of the time period and how many it has at the end. If the bot hasn't been able to rope others into moving the price much beyond it's own doing after say an hour or two, it will probably reverse the trend in order to prevent potential losses from its failed attempt.