Recurring patterns occur in every single altcoin in the market and, if you are to pull more money from the market than you put in – you need to come into alignment with the natural flow of the market.
There is a severe distinction between a skilled altcoin trader and the average market participant.
You see, if I were to open a retail store and I were to consult with a business advisor – his first piece of advice to me would be to “know your customer.”
There is no use filling your warehouse with hammocks and other summer time garden furniture, if your store is in some small town in Alaska, one of the coldest climates in the world. You won’t go far attempting to pitch car insurance to a room full of disqualified drivers. You do not show up to a classical art gallery with contemporary popart pieces – you wont make any sells whatsoever.
How does all of this tie in with crypto currencies and the altcoin market?
Well, in crypto, it is especially essential that every trader “knows his customer.”
You have to get into the minds of the largest group of participants in this market – novice traders. Ask yourself what all the commonly held beliefs are in crypto, and what people tend to refer to as good practice.
For example. Many novice traders have the belief that a coin with strong buy support provides an optimal, high-probability, trading opportunity. This is dreadfully incorrect.
You see, a coin tends to attract multiple buy orders – at, or close to the current market price – during the distribution phase of the price cycle.
These buy orders are placed by those who would like to view themselves as being simply “too smart” to enter the market via the sell side. So instead of easily buying a 2300 satoshi sell order, they put on a 2290 satoshi buy order (masterfull) and wait to be bought in.
As the price rises, you begin to see bidding wars take place in the buy side of the orderbook – with each new buy order tightening the spread.
Eventually, you have a situation where 20+ btc of legitimate buy orders consume the buy side.
This action only occurs during distribution, as laggards, novices and latecomers rush to get in on a coin that is already trading at a severe mark-up.
(know your customer)
In the mind of a novice, such a large amount of buy orders can only mean one thing. The price can’t fall, because there is “good support” or because this coin “looks strong”.
This isn’t the case.
A skilled trader would assess this by first recognising, ‘oh, prices are already running high… this is distribution. So, logically, there would have been a period of accumulation when the price was several percent lower than it is now.. Therefore, I’m not touching this coin. The opportunity has passed’
A skilled trader understands full and well that an abundance of buy orders only gives those who bought into a coin days/weeks/month before, the ‘option’ to exit, with a substantial profit, whenever it becomes necessary to do so. These early-bird traders have the option to either wait for their sell orders to be hit, or to exit via the buy side. As soon as one or two traders begin to take that buy side option, others begin to pull their sell orders and follow suit – then an avalanche erupts as the price tumbles downwards at speed, bringing the rally to a swift end.
(know your customer)
In the mind of a novice, it makes sense to shun low volume coins. They choose instead to buy coins with the highest volume, so that they can “get out” if things don’t go as planned.
This sounds logical. Logical that is, until you realise the mechanics behind how markets actually work.
You see, a skilled trader will only buy into intelligent accumulation. Which he can uncover and expose by using the charts. People will speak of inside information, but won’t recognise that nothing can be bought or sold without leaving a trace on the charts and in the orderbooks.
The implication being, where there is intelligent accumulation (shaking of the trees), there is the anticipation of a major price move.
As more and more perceptive traders pile in to take advantage of this accumulation, the price breaks out of accumulation range naturally. And being that the novices and weak hands have been completely shaken out of the coin, there is absolutely no sell resistance at this point – allowing prices to climb freely
Now. Whilst the novice avoids low volume coins. The skilled player realises the difference between a dead/dying coin, and one that is being accumulated in preparation of distribution.
The skilled player understands that every coin has its maximum capacity in terms of volume, thus coins with an above average 24hr trading volume are not looked upon as profitable opportunities – unless there is above average demand (which is rarely the case).
Skilled traders will never place a trade without having noticed a recurring, thus exploitable, price pattern.
These exploitable price movements occur over and over again, making it simple to gauge the most optimal buying-in price.
Some will call it manipulation, because they are often on the other side of the natural flow of the market – thus persistently averaging up loss after loss. Others will call it manipulation, because they’d hate for novices to metamorph into skilled players.
Whether you’re willing to accept this or not, it will never change the fact that every single coin in the market follows a strict, and therefore obvious, pattern of Accumulation and Distribution. This is the price cycle. This is how the market moves.
Whether you realise it, or not, you are either trading with the cycle or against it, this is a cold hard truth.
The charts reveal when intelligent traders are filling their warehouses to the brim with a certain coin. The implication being, people don’t just decide to accumulate for no reason – where there is intelligent accumulation, a large price move will always follow.
It is the majority, who loses the most money in this market – to the minority, which is made up of a small group of skilled traders.
Just look at the daily volume on Bittrex: 1000 BTC +. That entire 1000 BTC has moved out of the hands of the many, and into the hands of the few, and the same thing will happen tomorrow.
No one can stop the flow of the market.
Sure, you can redirect the flow, stall it for a day or two… but, the current of the market is just too powerful. It will break through every barrier that can be placed in front of it. If you are trading against this flow, you will lose. You will be swept away so quickly that it wouldn’t even be funny (unless you’re on the other side of the trade that is).
If you are in sync with this pattern of movement, you will make more money than you ever thought possible. You will be leveraging the markets own movement and momentum to plough large amounts of bitcoins into your wallet
These patterns are being exploited on a daily basis.
Call it manipulation, or whatever you will… It’s still going to occur. And, like it or not, you’re either going to be on the right side of this manipulation, or on the wrong side.