This post is a personal investment journal based on my own market study and observations. It is not financial advice or a recommendation to buy or sell any asset. All investment decisions and responsibilities belong to each individual investor, so please make careful decisions based on your own judgment and risk tolerance.
It has been a while since I last posted. Nothing particular happened personally. I simply could not find anything meaningful through chart analysis, so I took some time to study on my own. After seeing many of my recent predictions turn out wrong, I spent time thinking and studying what the problem was and whether there might be a new methodology I could use. I looked at the charts from different angles and asked myself what I had missed, and whether my current approach was really the right one.
The conclusion I reached was surprisingly simple. It should come down to objective analysis and disciplined execution. In the end, the problem was impatience. I failed to wait when I should have waited, and hesitated when I should have been decisive. That was the real issue. Once again, I realized that the mind is even more important than the ability to read charts.
[Bitcoin, BTCUSDT.P]
This is the comprehensive Bitcoin chart. From the upper left in a Z-shaped order, the timeframes are the 15-minute, 30-minute, 1-hour, 4-hour, daily, and weekly charts.
- On the weekly chart, Bitcoin moved sideways around the SMA 200, then rose sharply, and is now temporarily slowing down after hitting the SMA 50. Since the SMA 50 has turned down sharply and formed a dead cross, we can see that Bitcoin will need a lot of strength to rise over the longer term. I need to keep this clearly in mind: “the long-term trend is bearish.”
- The daily chart shows the opposite situation. Bitcoin rose sharply and broke through all of the moving averages at once. The SMA 50 is also rising rapidly and forming a golden cross. Of course, yesterday and today, price has been pulling back and correcting. It is quite rare for the daily RSI to move above 70, yet it has stayed there for several days. This is an overbought condition. After an overbought phase, buying pressure usually tends to weaken gradually. I need to remember this: “the strength behind the recent sharp rise is likely to weaken.”
- Now look at the 15-minute to 1-hour charts. Price has moved below the moving averages. The longer timeframes have started correcting after the sharp rise, and the shorter timeframes have already shifted into a downtrend. The combined conclusion is this: right now, I should be looking downward. Of course, another sharp rally could still appear. But I think this very mindset is what lowers my win rate. In my head, I need to clearly keep the idea that “the direction is downward,” and use that as the basis for positioning when betting on either upside or downside. I really need to remember this.
[Daily Chart]
- I am going to try investing with a new method called Turtle Trading. Of course, I will still refer to my existing moving-average trading approach, but after learning about this method and studying it, I think it may be useful for longer-term trading, so I want to try it.
- The principle is simple.
- You will see the green and red dotted lines. These lines mark the highest and lowest prices among the previous 20 candles.
- If the candle moves above this line, I will maintain a long view. If it moves below this line, I will maintain a short view. I plan to keep losses very short, around -2%.
- The important part is the SMA 200, the blue line. If the candle is above the SMA 200, meaning the trend has turned upward, and the candle also moves above the green line, I will interpret that as upward momentum gaining strength and take a long view.
- Conversely, if the candle is below the SMA 200 and then moves below the red line, that means the trend is falling and the candle has also broken the recent low. In that case, I would think downside momentum may accelerate.
- The yellow circle is an example of an area where I should look for a long setup, even though it is below the SMA 200, while the orange circle is an area where I should look for a short setup.
- This is a very well-known trading method on Wall Street, and it is famous enough that there is even a book called Turtle Trading. The idea is to keep losses short, then hold longer when the trend is correctly captured, recovering losses and generating profits beyond that.
- I plan to apply this method to the daily, 4-hour, 1-hour, and 30-minute charts. If I apply it on a longer timeframe, I will hold the position longer. If I apply it on a shorter timeframe, I will trade briefly and exit.
- For about the next 15 days, I want to try this method and see the results. Let’s watch it together.
I will skip Ethereum for now. My view is not very different from Bitcoin, and with moving-average trading, it feels a bit tiring to keep repeating the same comments every time.