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Not to be rude but I stopped reading at "MACD". TA is not the go-to strategy in stock trading for a reason. Indicators like MACD, RSI, Bollinger Bands etc re-paint a lot. So the perfect signals everyone sees on the charts are, for the most part, are just "profitable system" mirage.
What is an example of a "go-to strategy in stock trading"?
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I've told people to buy at $3,800, $5,900, and $14,000 and got shouted down each time. All of these were after major crashes, so of course the price was about to bounce back. Even if you know when the music hasn't stopped yet, it's very hard to get anyone to listen.
Oh boy... I told my dad to buy at $8, $27, $200, $2000, $3000, $6000, and $12000. None of these times has he actually taken any action. :( If only I turned 18 a couple years earlier...
Earlier quoted context omitted.
Not to be rude but I stopped reading at "MACD". TA is not the go-to strategy in stock trading for a reason. Indicators like MACD, RSI, Bollinger Bands etc re-paint a lot. So the perfect signals everyone sees on the charts are, for the most part, are just "profitable system" mirage.
Thanks. The conclusions may be obvious to experts in algo trading (and I heard similar things about the problems of TA for stock trading prior to doing this), but it was educational for me to go through the exercise because (1) it confirmed to me that the crypto markets behave similar to other markets, and (2) it helped me understand exactly where and how a technical indicator like MACD falls short for making trade d…
Earlier quoted context omitted.
Oh boy... I told my dad to buy at $8, $27, $200, $2000, $3000, $6000, and $12000. None of these times has he actually taken any action. :( If only I turned 18 a couple years earlier...
Your dad is a wise man!
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It's not irrational. It's an asset whose price is rising. If you want to make money, it's a good asset to trade. Just avoid hodling the bag when the music stops...
> Just avoid hodling the bag when the music stops... and how do you know exactly when the music has stopped?
Full disclosure: I don't own any Bitcoin, but I own other cryptocurrencies.
Unless you can include the complete irrationality of the users fueling the crypto bubble to get rich into the statistical model, any statistical analysis of those prices will be misleading. Traditional historical trend analyses of stock prices assume the market is somewhat rational. (but not 100% efficient, which is where money can be made)
Earlier quoted context omitted.
It's not irrational. It's an asset whose price is rising. If you want to make money, it's a good asset to trade. Just avoid hodling the bag when the music stops...
> Just avoid hodling the bag when the music stops... and how do you know exactly when the music has stopped?
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Depending on the automated strategy, they can dramatically reduce risk though. That has value well beyond the simple return of buy and hold, where if you don't time the sell perfectly, it's all useless. I think that's the big advantage automated trading strategies can have if designed well.
Reduce risk but also involve more time and energy.
I ran some tests of my own with simulated automated trading strategies over the past few years of historical Bitcoin price data. I used a genetic algorithm to encode a range of time parameters for MACD, along with different trading triggers and amounts. After a day or two of running it against a huge number of permutations and generations optimized for highest overall return, I came to a similar conclusion: the fitte…
Not to be rude but I stopped reading at "MACD". TA is not the go-to strategy in stock trading for a reason. Indicators like MACD, RSI, Bollinger Bands etc re-paint a lot. So the perfect signals everyone sees on the charts are, for the most part, are just "profitable system" mirage.