Hello Crypto trader or HODLer! (holder or long term investor)

I just want to use this write up to open a newbie's (some oldies) eyes or mind to few aspects they might not be aware of or overlook as they sojourn in the foreign land of crypto trading.

I have always believed that, there are "trading Gurus" out there, who could tell precisely, when a reversal is going to happen in the market, be it at the top or down at the bottom. By just looking at the very same chart you and I stare at but makes little or no meaning of at those "miraculous" point in time when the market rallies.

I was made to understand that, so many variables affects the market, which is true though. From institutional investors buying or selling into an instrument, good and bad news, environmental disaster, war, wallet's bug, upgrade or update (crypto), ddos targeting "Master nodes" (DASH came to mind) and some crazy excuses that make a "no coin" become the very big thing or lose its value in a jiffy.

THE CHART

I became astound at some crazy effects, that has nothing to do with your RSI being oversold or overbought or your bollinger band's elasticity or a break below or above your trend lines, support or resistance or your Fibonacci level. I know, we always find a way to explain and give reasons to the situation with our charts but the truth is that, some big transactions don't follow the chart.

ORDER-BOOK

Now, I believe a lot of noobs, newbies or "sheep" as they are called by the trading Gurus, are not aware of the trading or order book. (A book that shows the current buy and sell orders, volume and prices (Google it). With a knowledge of the volume of buyers and sellers in the market at a period or point in time, you might change your trading strategy. Depending on who is more, (Buyers or sellers) the market goes up or down.

A WHALE

A whale is what it is, that big fish (individual, institution or group of persons) in the ocean (market) that can consume all the tiny fishes (newbies, "oldbies" and lots of Gurus sometimes) around its big and wide mouth in a jiffy. Their pocket, purse or credit balance makes them a whale and they most a times, determine the market flow, though not all the time but most times. When they pull out or buy into the market, you will feel and know it.

TYPES OF WHALES & LEVELS

The tadpole, mackerel, sharks, dolphins... big or bigger whale? Currently as I write, 1BTC (One Bitcoin) is about $2350. Now, imagine one person placing a buy or sell order of 950BTC at a price on the chart or group of persons placing a 1800BTC order. This gets interesting when you are watching the order book. There are times this order create the support or resistance we see on our charts. These whales do spread their buying or selling orders over a period of time, from a day to several weeks pushing their directional agenda across board.

LEVELS (Support/Resistance)

Two things most times occur at these levels. Firstly, the buyers couldn't buy all of the whale's coin or the whale couldn't sell all of his coin at that price. I also noticed that, a lot of people start to place orders close to the whale's price and create additional volume around that position.

Secondly, the fear factor. The newbies or sheep, panic and starts placing sell order because they believe price won't go beyond the whale's selling price or everyone become bold and starts placing buy orders because they believe price can not go lower than the whale's price.

ANGRY MARKET IN A DIRECTION

When the market decides to reverse or go to a particular direction, never you trade against it. I have sometimes seen big orders of 640BTC or more and all the 1, 2, 3, 5 10 BTC orders including peanuts surrounding the whale, cleared in a second like a very hot sword cutting through butter, so be careful and smart with your peanut.

PUMP, DUMP & The MIRACULOUS

This first part I will call the "miraculous". I don't understand and I am trying to wrap my head around it. The part where you just see a sharp spike just like lightning. The price reaches a point very far above or below in a second and back as you are looking at your chart.

The second part is a gradual movement that could last from one to thirty minutes or more, before the price returns to normal or remain close to where it's pushed.

I will be adding more to this post but I will love you to comment and let us enlighten ourselves as we discuss more

Thank you for your precious time and love, good luck.

Topics