The Truth About Bitcoin Indicators

Why Crypto Indicators Suck?

Imagine buying a new car, and... instead of looking out the window, you rely and drive primarily based on watching the camera display. Sometimes it delays, and sometimes it doesn't show the full environment.

The same with crypto indicators.

Take the favorite bitcoin indicator ever - RSI or Relative Strength Index.

That indicator has lost more money to traders than anything else. Whales LOVE when you use RSI... because the rule of the thumb became rule of the Dumb... and

Newbies Think If It Is Oversold It Has To Go Up

And If It Is Overbought It Has To Go Down!

The common rule of a thumb is 70-30 - to determine oversold or overbought levels.

Some newbies think they are outsmarting the whales and the whole industry by waiting for the 85-15 levels, but let me illustrate for you why using crypto indicators is a mistake that makes you little and loses you lots.

Relative Strength Index (RSI) In Crypto SUCKS!

(And that is one of THE BEST crypto indicators out there!)

See this: I opened the first, random chart, and see what it shows... rsi at 30 - the signal to buy according to RSI, right?

So many newbs go full scale all-in long.

This is what happens:


Okay, they get liquidated on high leverage, but it's holding level, I just entered too early... - they think.

And what newbies do?

You got it! They enter again!

Because now it HAS to go up - look at the RSI it's at a historic low point.

And then this happens:


Yes, eventually it does go up... but now look at the chart... and tell me, 

If you didn't look at the indicator - would you do much worse?

The odds are you probably would do BETTER! By not re-entering based on assumption of oversold.

The Secret Of RSI Indicator Is That On Bull Pushes It Can Remain Overbought For A Long Time... And On Bear Dips It Can Remain Oversold For Long Time!

Remember this.

Remember BCH pump recently? RSI was through the roof and more... and it went on and on.

Now - is the indicator never accurate?

Of course not - otherwise it would be good for counter trading. But this is what people do:

They when they gain, they "guess" based on an indicator the reversal, they sell very early, when it comes back to above 30 levels... they make SMALL profit and BIG (liquidation) losses.

And we talk about the most popular crypto indicator in existence!

Is There Any Use To Crypto Indicators?
Let's go back to the Relative Strength Index (RSI) for Bitcoin.

The most useful, most accurate signal you can get based on an indicator is:

Bullish And Bearish Divergences - That is the most accurate setup for using RSI for example.

Yet it is accurate in only about 70% of the cases.

And do you want to know the best part?

You do not need an RSI indicator for that!

I use RSI here for an example, but the rsi is used only because most folks here are familiar with it.

Because no one wants to share with you the secret, your D Man will..

The Indicators Are Derived Based On Price Action. And The Price Action Is Shown On Charts!

Remember this.

Look out the window, you don't need to rely on the camera view to know how to drive straight. If you know how to read charts properly, you don't need crypto indicators anymore.

I don't use them. You have never seen me use them, or base on them any trade for Blockchain Whispers while I was trading. Now I see my top traders (since I retired in April 2017), they use very few to no indicators.

And absolutely NO traders in Blockchain Whispers team base their trades on what indicators say. Yet so many newbies do!  Why??

The trading is based on three things:

1) Supply

2) Demand

3) Speculation

Supply and demand alone would make RSI and other bitcoin indicators the best tools in the world to trade on. Speculation part is what makes them useless.

If it takes just 30 points below to liquidate a huge amount of indicator-based traders... and even the whales want to go up - imagine what they do - yup - they go down first, liquidate newbies, get free money (in terms of short liquidation = market long buy) and then they pump up the price profiting off of free money from the newbs.

If you are just starting out - DO NOT use Indicators for crypto trading.
If you are experienced - you do NOT need indicators.

When nobody wants to share this, you know I will.

Top traders do not use indicators. I had close contact with Bitmex Leaderboard trader - no indicators. I had close contact with super accurate traders - no indicators or some basic for easy charting like volume and momentum. 

You can read everything off the charts. Do not drive based on the lagged image your camera relies to you. Trust your own eyes, build your instinct and join the winners.

Screw crypto indicators!

D

 

Okay but D - Which Indicator Would You Purchase If You Had To?

Alright, if you are set to buying a crypto indicator - my advice is - none.

The best indicators out there are free.

The best bitcoin indicators are RSI, moving averages, Ichimoku clouds, Fibonacci (it's a tool though), volume, momentum, ... basically, whatever helps you park the car better, but you can do it all without... if you know how to drive.

And Blockchain Whispers followers are not pussies - you either know or you learn how to drive. You don't scream: "Mommy, come park my car please!" every time you get in front of the house.

Comment if you agree, if this answered some of your long held suspicions and if articles like these help you become badass and more ready for the crypto year to come!

Update:

This happened just a couple hours after this article was published. look at the rsi. Case and point.


SHARE:



Comments

b5c
  • 12
3w ago
I only look at the RSI for a long period of divergence, not short term.    I use volume,  and support/resistance.    Also, the order books for bids, looking for clusters of large bids, and watch the shorts/longs incoming.    Sometimes the charts seem to create a 'picture' beyond the pattern that tips the next move. 
Recently, I saw the perfect pennant.    It was like a bear was waving it begging a bull to come to his trap.   LOL  
bdg
  • 36
3w ago
Trend trading using MAS and Fibs helps me 
b28
  • 65
3w ago
Thank you Boss! My best crypto trading ibdicator is...D man ;) baby!
bg5
  • 24
3w ago
Bravo
byp
  • 58
3w ago
Nice post, totally agree! But what do you think is the best way to study price action on the charts for newbies?
D Man
  • 2160
3w ago
screen time. Simply watch the charts and paper trade. Best method ever.
bma
  • 66
3w ago
Good stuff. Ive read that RSI is timely but not very reliable so it needs another indicators to spot check like MACD. 
3i
  • 41
3w ago
Awesome, I was learning a lot when read this article! Thank you, D Man
b0h
  • 19
3w ago
Agree with u
yf
  • 2
3w ago
Very good post
dsl
  • 9
3w ago
Bravo!