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JamesIG

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Its going to difficult to call the direction now. There was a lot of buying from 7 to $800 so will have to see what those people do. Will they hold or will they sell. Shorting this market was a good idea and probably still is but you don't want to get caught out in a period of being unlongable. If we didn't have that problem I would be short myself.

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James could you clarify.

 

I had to call ig at that time. You can close it if that is the only position you have but if you are already long then you cant close it as you would be overall more long (buy to close the sell). Maybe you could use a stop loss.... but they are far from the market price so you'll give a lot of profit back anyway.

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Hi - let me also clarify a few things which relate to trading and exposure, and using the force open functionality on a deal ticket. Put simply, there is no financial benefit from having a long and a short in the same market at the same time, and if held overnight it will actually be more costly as you would be paying 2x the cost of overnight funding. 

 

If you have a long and a short your exposure is zero. You are basically trading exactly the same (and will have the same financial benefit) of someone who doesn't have a trade on at all. When you have a long and a short, and you are looking to close the short side, your net effect is to increase your long exposure, which will be rejected basis the 'unlongable' status. I hope this clarifies my earlier statement, but any questions just ask. 

 

 

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Corrective sell-off in Bitcoin

 

Introduction 
I have no agenda, apart from being pestered by a nagging desire, to write at least one piece of analysis on Bitcoin (BTC). As an FCA regulated firm, we are currently contemplating adding this to our extensive list of products but the jury is still out! This analysis is based on technical analysis and is my view only. I have never owned Bitcoin and have been naturally green-eyed in the mind-blowing rally that has taken place in this asset over the recent months!

 

So, I have nothing to gain this morning in producing this piece apart from, hopefully, utilizing my expertise in analysis, trading and writing trade ideas, in the hope that someone (or many) may benefit from my knowledge & wisdom and ultimately…come back for more!!

 

I have a lot to say but I know how busy everyone’s life is and so I will keep this as brief as possible to encapsulate the world’s 8-second attention span! (I don’t know how true this is – hopefully not otherwise I am the only one reading from here on!)

 

What do I know about Bitcoin? VERY LITTLE!

What do I know about writing trade ideas? PLENTY!

 

Do I need to know anything about Bitcoin to write this trade idea? Not really, it’s all about technical analysis on the historic price chart – I’m not analysing the fundamentals. That’s another story and way more boring than this!!

 

Warning – there may be some trading/market psychology thrown into the mix but I will not dwell on it too long!

 

Looks familiar!?

I consider the best way of analysing is on a more medium-term basis – firstly the short-term technical charts have so much noise, it is highly likely that a trade idea is stopped before it is finished writing!! Secondly, there is no long-term chart! The market is a newbie…

 

Before I start – 2 charts below with time-frame and price removed – look familiar?

btcgold.PNG

    

Chart 1 is a weekly chart of BTC over the last 2 years and chart 2 is monthly chart of Gold (XAUUSD) over the last 2 decades! Interesting!?

 

Analysis

Price action topped out close to 20,000 and is currently in a corrective formation lower and trading near the psychological 10,000 level (over 50% retracement since inception. A clear break of this level should lead to a more aggressive leg lower, in a typical AB=CD correction towards 8,000 towards the 61.8% Fibonacci retracement level. This is the first time, since 15/09/2017, that prices have broken below the Ichimoku cloud.

 

btcchart.png

 

Trade Ideas

Two scenarios to contemplate – one for the bulls and one for the bears!

 
Bearish scenario:

Sell a pull-back to 12,500 & 14,000

Stop at 15,500

Targets 8,500 & 6,000

 

Bullish scenario:

Buy a dip to 8,500 & 6,000

Stop at 4,500

Targets 12,500 & 14,000

 

I hope you have enjoyed my brief analysis. If you are interested in trade ideas on FX, Equity Indices, Commodities & Single Stocks you can use the PIA First signals via IG's signal center as shown below.

 

2018-01-17 13_51_18-IG Trading Platform _ Spread Betting.png

 

RISK WARNING:

Trading carries a high level of risk to your capital. Losses can exceed deposits. FULL RISK WARNING

 

PIA-First Limited is authorised and regulated by the Financial Conduct Authority, which can be checked here. FRN 787261.

Registered in England & Wales, company no. 07428345 Business address: Kemp house, 152 City Road, London. EC1V 2NX Registered office: Palladium House, 1-4 Argyll Street, Soho, London W1F 7LD

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I dont know about the above analysis. you buy at 8500 with stop at 4500 then risk reward is 1:1 which I would not advise any trader to take. I'm not a big fan of buying dips in a massive sell off like now. They can call it a correction but people are taking profits, selling and not re investing at present. At this stage the driving force has to be good fundamental news. Waiting in the sidelines until you can see buyers come in might be more helpful.

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Thankfully i know a lot about analysis ;) and more about trade ideas!

That is the reason the both trades have 2 entries (buy at 8,500 & 6,000 = average entry 7,250)

Targets are also at 2 levels which makes the target an average of 13,250

So, overall risk/reward is over 2:1! (like most of our trade ideas)

I hope that better explains the idea.

Thank you for the critique, it is always much appreciated.

 

 

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I just needed to remind community members of IG's official stance on this. In regards to the PIA analysis, no representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result.

 

And now may the thread continue. :) 

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This is a typical story of a 'trader' who trades without a trading plan or discipline!

And this 'short story' summarises what i believe most new traders lack - education.

On reflection it's nowhere near the saddest story i've heard - some people have lost life savings chasing the dream - he's lost £3k won in a poker game!! Still a lot of money but hopefully he has learned something........

 

My advice to any newbies would be to take the time to learn about trading before opening an account.

Take advantage of the huge amount of educational material on trading that is available from 'regulated' sources.

Understand risk management, money management and risk/reward. Learn from your mistakes.

Take seriously the move from a 'demo' to 'live' as the psychology is different, although many would argue it shouldn't be! IT IS!!

Forget the get rich quick stories and be realistic about your goals and expectations.

 

If you apply some of the good practice mentioned above then you will improve your chances of success but remember.....

Your capital is at risk!

 

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  • 2 weeks later...

Corrective sell-off complete...Where now for Bitcoin??

 

 

 

In regards to the PIA analysis, no representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result.

 

 

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Where can i find charts for the different crypto? For example, IG only has a very short history for ripple charts. I need something with a longer history. Where else can i find charts to draw my own lines and indicators? I saw some other users posting their drawn charts here, where do they get the charts from?

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  • 2 weeks later...

Hi - please see the directions below. This is for iOS, however the process and charts are exactly the same. 

 

  1. tap somewhere on the charts, for example in the white area below as highlighted by the circle
  2. this will bring up option along the bottom
  3. select drawing
  4. select the tool you wish to use
  5. draw away

Image-1.jpg

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A very interesting article passed my way and maybe interesting for other Community members. Really helps explain the actual hashing process and puts a few things into context. 

 

https://gizmodo.com/mining-bitcoin-with-pencil-and-paper-1640353309

 

Also an absurd but hilarious sign off... 

 

"A Reddit reader asked about my energy consumption. There's not much physical exertion, so assuming a resting metabolic rate of 1500kcal/day, manual hashing works out to almost 10 megajoules/hash. A typical energy consumption for mining hardware is 1000 megahashes/joule. So I'm less energy efficient by a factor of 10^16, or 10 quadrillion. The next question is the energy cost. A cheap source of food energy is donuts at $0.23 for 200 kcalories. Electricity here is $0.15/kilowatt-hour, which is cheaper by a factor of 6.7 - closer than I expected. Thus my energy cost per hash is about 67 quadrillion times that of mining hardware. It's clear I'm not going to make my fortune off manual mining, and I haven't even included the cost of all the paper and pencils I'll need."

 

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  • 2 months later...

as an FYI with immediate effect the starting margin rate on Bitcoin and Ether for professional clients has been dropped to 20%.

Margins for retail clients remain at 35%, and all other cryptocurrencies remain unaffected.

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  • 1 month later...

interesting @Caseynotes. I actually wrote something similar to this which was posted on IG.com regarding ether and the network effect of metcalfe's  law. That looks at the network effect rather than the actual transactional network effect, but the principles are the same. 

Are these the new EPS / EBITDA's of the crypto world? 

https://www.ig.com/uk/forex-news/using-metcalfe_s-law-to-value-cryptocurrencies-180410 

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  • 3 months later...

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