Paradox

已更新

Have you missed me? I haven't been uploading lately.
I've been busy serving my time. I am not at liberty to say whom I was serving.

In that time I have realized many important aspects of how life and societies work.
If you take a close look you will too realize...

- The way we live is insanity. A constant rush to work with no end in sight. The money you manage to save from your wage is soon deemed worthless from growing inflation.

- The way we defend is insanity. A constant rush to arm our countries with stronger weapons. The more you defend, the weaker you become. The enemy will rush to surpass your forces.

- The way we invest is insanity. A constant rush to improve our investment algorithms with MMT and AI is a zero-sum game. The opposition will attempt to get richer than you, and faster.

- The way we trade is insanity. A constant rush to get the fastest signals while ignoring the bigger picture. We trap ourselves in a zero-sum game with whales simply sitting and looking.

While market manipulation may exist in some extent, the ultimate manipulator is "The Composite Man". The "common mind" of all traders out there. That mind is very easy to fool. And it gets confused on its own, and trapped into its own rabbit hole.

And so, here you will see how easy it is to get trapped.

Long MA crossings are considered "the signal of the whales".
If a short MA crosses above a long MA we go long, and the opposite we short. If you pick a long timeframe like 50D and 200D you will be trading like "smart money". Or so you think.
This assumption made above is trivially easy to debunk.

The following chart is NOT trading advice. It is how the "common mind" works.

Most sold when Bitcoin plunged below 20k. Some bought in Q4-2023 and most bought right about now, near all-time-highs. This is the way 90%+ think and behave. People actually trade this way for years. And it doesn't sound bad.

Until you realize the premium this trader is paying right now.

In 2022 many sold all their Bitcoin in a significant discount compared to a massive period of 4 years. Selling below the orange line means that one is selling at a 4-year low.
In 2023 some bought with a 50% premium, while now they are paying more than 2x the average to get a place in Bitcoin.

MA crossings are lagging indicators. Even if you shorten their length, you are simply moving between timeframes and at the same time losing quality in your lines.
By the time your MAs cross, the event has already passed.

Trading vs Hodling is a painful conversation to have.

A trader must do the extreme. Make faster money than gen-pop. They must be more profitable than Bitcoin itself. And that is possible sometimes.

The orange arrows signify the "investment track".

There have been times in recent history of Bitcoin when traders have managed to outperform the fastest growing asset.

As a trader you must do the unthinkable. Break all rules and negate all paradoxes. To survive you must be the fastest. You have to buy against all odds when everyone is scared, and sell silently, when nobody makes a second thought.

You must first become paranoid to understand how the insane ones think and manipulate their craziness. Stock markets and trading is not about theft. It is about truth.

Tread lightly for this is hallowed ground.
-Father Grigori

註釋

Japanese traders mainly use concepts like "Disparity". The distance between current price and the mean. They basically look for extremes in price difference. A deeply corrected price to buy and a highly extended one to sell.

註釋

Talking about Japan...