The market is a very interesting thing.
Especially when you understand what to pay attention to.
I have been trading for a long time. During this time I have tried a large number of ways, strategies for trading in the market. I have developed a small strategy for myself. It is very simple.
The market has Pareto optimal condition. And market is liquidity. And it is for her that the “hunt” goes. I am looking for accumulation. Abnormal accumulation. Where the power of “stopping” orders was higher. Where the majority refused to believe in further growth. It is always visible. Especially if you look at the market through the prism of clusters.
I use Resonance Trading Technology. This is a trading terminal that structures tick data as I need. And at the exit, I get a well-structured picture of the market.
However, there are many exchanges in the crypto market. And, accordingly, on all the exchanges a different picture of the same pair.
Therefore, I use search engines, as it is incredibly difficult to physically reach and view more than a thousand tools every half hour.
One of them is FTT. He finds reversal formations. And then the matter is small: open a chart, look, and then compare what is on this pair on other exchanges and against other base currencies.
Naturally, this is not the whole filtration process. To enter a position, I find other confirmations.
However, in this example, I want to talk about the most obvious. An example of a bitcoin pair (BTC) versus stablecoin (USDT) or another fiat currency.
On the chart, from the Binans Exchange, we see a bunch of clusters, like nothing abnormal. However, the FTT search engine shows that a reversal is possible.
Now let’s see the same pair but on other exchanges. To find a more obvious confirmation.
A small digression.
In the RTT terminal, there is access to the most liquid and popular exchanges. However, there are a lot of exchanges in the world, so when some of the assets are interesting to me, press the “Tiker Info” button in the terminal, and go to the “Markets” tab on Coinmarketcap, in order to see where and with what volume the asset is traded.
Here I estimate the exchange’s monopoly on the traded asset, however, in the case of BTC, I drop the first 3-4.
I will carry out research on OKEx, Binance, Huobi, Bitfinex.
On the second exchange, too, nothing abnormal.
But for a couple of BTCJPY already much more interesting. Bitcoin versus Japanese yen has not a large turnover, but it is sufficient to notice the uneven distribution of the “activity” of traders.
And here (BTCGBP Bitfinex) the “anomalous” zone, where the density and size of the clusters is clearly visible, stands out against the background of the overall trade density.
And it is from this zone (marked by the red arrow) that the market has gone down.
From this zone, the price dropped by 10% (to the lowest point, the yellow arrow), which is a good move, and a good potential profit.
Below I give a comparison of daily trading volumes, so that it would be clearly seen why I dropped the first exchanges, where the trading volume was ten times more.
There are a lot of “noise”, different algorithms and traders with a small capital.
Daily turnover of pairs:
BTCUSDT – 125,300,000 USD
BTCUSD – 69,000,000 USD
BTCJPY – 1,300,000 USD
BTCGBP – 500,000 USD
I want to remind you that the market is well-charged with people and algorithms. And still people and algorithms are rather predictable. And since the majority have no understanding of what is happening in the markets, they often leave “Indirect signs” of the future potential movement.
Be careful, and the profit will be with you.