RE: Monkeys Playing With The Emperor's New Charts
OK ... this is not even funny.
On your post a couple of hours ago:
As an aside: I would rank the average of "crypocurrency analysts" found here on Stemmit as abysmal. I am aghast at the number of amateurs pretending to be professionals. Here's a clue: If a particular cryptocurrency doesn't have a Central Premise, a reason to be, then it won't survive. Can you imagine Christianity surviving without Christ ... Nike without shoes ... Cryptogee without hypothetics!
Technical analysis, a favorite here on Steemit, was developed over a century for financial instruments that, directly or indirectly, had underlying economic value. Stocks create dividends. Bonds pay interest. Cryptocurrencies, in general, (STEEM is an exception) do neither. It's like measuring mass with a thermometer.
Technical analytic tools work (to whatever degree that they do) because they identify cyclical trading patterns ... but the impetus for such cyclical trading patterns are cyclical financial performance and/or macro-economic trends that occur in the real world.
The vast majority of cryptocurrencies have no underlying economic function and therefore fundamental analysis is impossible (because there are no fundamentals). And hence, the popularity of TA for cryptos ... there's nothing else to use as you pretend to be analyzing something.
A great deal of TA is the result of self-fulfilling prophecy. That is, because a whole bunch of traders are all using the same indicator, they cause the movements that the indicator purportedly predicted. TA indicators go in and out of fashion, however, so whatever works today may not work tomorrow. Moreover, the hedge funds know which TA indicators the amateurs use and can easily manipulate them for profit. I don't dismiss TA in it's entirety, but it is widely misused.
There's a lot more:
https://steemit.com/cryptogee-musings/@cryptogee/killing-bitcoin-with-a-million-sob-stories
Cryptogee, while you're at it, I answered your query ... look at the hyperlink at the bottom as well ... great documentary ... full doc on his site ... check it out):
https://steemit.com/lettersfromdarwin/@cryptogee/letters-from-darwin-an-evolutionary-coin-flip
Noooooo!!! :-)
I think you hit the nail on the head, is that real indicators of a market take into account lots of real world factors. There is going to be heavy rain in the coffee growing countries next year: sell coffee stocks
However with crypto we are trying to second guess the mood of the market, although as you also point out, if a crypto sits at the centre of an actual real world product, then we can use metrics related to that product to try and figure out which way a market will go.
Popular sports person wins big tournament while wearing Nike: buy Nike stocks (grossly oversimplified!!)
@cryptogee,
I couldn't resist. :-)