I think it's more like a self-fulfilling prophecy, right?
That is what is not clear to me indeed. Could indeed be self-fulfilling prophecy, that is why I want to research this in practice, while not using it to change my trading method until I have figure this out. But even when it is self-fulfilling prophecy, it can be used to decide trading tactics. Keep in mind, the Fibonacci levels are different for each length of graph, ie for a 6 hours graph they look different than for a 24 hour graph, or 2 weeks graph. Every trader has there own way of deciding, based on what timeline in the graph. Also Fibonacci is just one of the instruments they us, other parameters and instrument they through in the mix as well. Therefore it'll be not be that easy to defend that Fibonacci is just a hoax. I'm a beta guy, so for me science is leading, but nature and biology shows the Golden Ratio being everywhere...That is curious, right?
That's actually very fascinating indeed. Please tell us about the results you get and whether this method really works. It would confuse me a lot if an artificial and chaotic system (such as the stock market) would actually follow any natural pattern at all.
It would confuse me even more if the stock market would behave according to the Fibonacci series on any given scale.
I have to do further research on this, but I've seen more historical patterns kind of following the fibonacci lines. My logical explanation is that many traders use this instrument therefore creating the support and resistance levels according to these instruments, more or less self fulfilling phrophesy.
Last day or two (with great support of some others who are good in trading), I'm adopting the break out strategy. So far 5 trades successfully with per trade 20%+ gain. Discovery of these breakout point did not include Fibonacci at all.
Do you have experience with breakout methods and how to discover them? I wrote an article on that, well I found a piece on Investopedia that I included in that article with the request of that is correct and I shall use to study that method further. I guess the 'thing' in breakout method is to discover the right coins at the right times and levels for go-in. That'll probably the most difficult part, although now with many coins going up, even when they go down at some point the breakout anyway. That makes trading easier, but may not be sustainable in the long run due to lower amount of breakouts, more stable coins and all.
But how can it possibly be a self-fulfilling prophecy if it works at any given time scale?
I'm sorry to tell you that I don't have any experience with any trading method. To be honest, day trading is simply speculation for me. The only real strategy making complete sense to me is the Warren Buffett method: Buy and hold forever. ;-)
I did, however, sometimes try to be smarter than the market by doing some day trading but so far I was always worse off afterwards...
I don't know. But there are not so many percentage lines, and when most traders look at 1 or 2 times scales to decide on, then you have a critical mass acting on more or less the same data. But that said; I don't even know if it is self-fulfilling prophesy.
I think you are wrong here. Daytrading can be done with whole set of indicators and realtime data. Realtime data such as open contracts buy/sell + market depth (distribution of open contracts), realtime contracts buy/sell and the speed / volume and number of buy vs sell at each given moment + candle stick charts can tell quite a lot about the coin and what is happening right at the moment you are looking at them. Will you believe me that in the first days of trading where I adopted the method of riding the constant little waves in upwards direction brought me more than 30+% gain (read here and here and here about it). Would you also believe me when last night and this early morning I got our of 3 break out trades with 20-30% each trade and overall (over enter trading budget) gain of nearly 8%? Since this morning I bought into 5-8 other coins on break out strategy; All are not broking out, I still have half of those in profit of at least 10% and still holding for real break out, and the other half is in some minus. But overall again I'm a little more than break even, ie overall a small profit. I did a couple of things that is not right, namely buying the coin before break-out; while one should buy they coin when is it broken out, ie stop limit order instead of buying order. That is the reason why I have some coins on minus. Only next days I'll know if I picked the right coins, I actually hope some of those coins will start moving when Asia wakes up again.
So, in my view daytrading is for sure not speculation. Well not more speculation than buying and holding forever. But nobody can see the future, not even Warren Buffet. So in everything you invest with some future in mind, is somehow speculation.
On break out strategies as so many other trading strategies I'm a complete newbie, so I hope I've done some analyses right for the coins I selected this morning, but only time will tell. Until this morning I was getting advise from someone who makes about 20% a week on break out trading with a fixed 20% gain set per buyin.
Interesting point of view. However, I still think that you have to look at the underlying value of the things you are trading (like stocks, cryptocoins, etc...). Just saying "get in at point X and out again at point Y" seems a bit too vague to me.
Wouldn't all those strategies simply stop working as soon as everyone is playing by their rules?
One point I don't want to argue about however is the fact that some people actually do earn money by doing day trading. I sincerely hope that your analysis enables you to make a lot of profit but I highly doubt that it's worth the time and efforts for the average Joe.
Sure, those who do not go into the details, will likely not make it.
I agree! It seems that cryptospace is kind a like all these promising startups in Silicon Valley with an interesting an idea and a story. In the long run I would like to think only those coins will survive that have some real services, revenues and assets connected. However, from a short term trading perspective, the 'content' of the coin becomes lesser relevant, I think :) Keep in mind, I'm a newbie in trading, and just apply my logical thinking here.
I sincerely hope that you made quite some profits in the last few days. However, considering the most recent "bloodbath" (as some call the decline in value of many cryptocurrencies here), most day traders most probably had to deal with some heavy losses.
In order to trade in a highly volatile market one really must have lots of time to make sure not to get out with a loss.
Thus, I will stick with "buy and hold" for now as I simply don't have time to follow and react to every tiny move of the market.