Post
Topic
Board Speculation
Re: Why the price of Bitcoin still in such a state?
by
speedy963
on 05/05/2022, 13:53:45 UTC
Something like that can be solved incredibly easy by just having a stop loss, the level of which you decide by using indicators which have nothing to do with the news, and even if you knew what is happening outside the charts if you have a successful strategy then you need to let the price to hit your stop loss and take you out of your position, so nothing changed, which is why I do not think it is important precisely because if there is an important enough news then it would be reflected in the charts sooner or later anyway.
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Stop losses do reduce losses but in some scenarios where a signal has been given(with a limit order, take profit zones and stop losses zones) and the price does not reach the take profit zone then drops to the stop loss zone, the profit that could have been raked in is now turned into a loss. All due to not knowing a at least basic knowledge about the market. Mind you, I was talking about people who barely has knowledge about the market and relies alone on signals. This includes most basic indicators let alone trading plans nor portfolio plans.

But let me indulge you on that thought you had about "news being precisely insignificant since it would just reflect on charts sooner or later" brother. Seeing your rank I must assume that you have been in this industry for quite a long time already and may have tons of experiences in both investing and trading. Now, would you not agree if I say that the educated guesses we make with the help of some indicators do not go the way we thought it would in some cases? This is most probably the reason why some traders use tons of indicators and wait for several confirmations before entering trades. But even then some still suffer defeats on some trades because some big news has happened or some influential person made a negative or positive statement in relevance to cryptos.

My main point about this is that while technical analysis can give us an edge, without awareness about news or macro economical issues that take place, we cannot make a better trading plan. This is mainly because we are waiting for the indicators on the charts to show us a direction where the price is heading which may be too late to react upon considering how fast the crypto market moves sometimes. Resulting into half assed plans the turn into bad decisions. I hope this makes what I was saying prior to your response a bit clearer for you now brother.