The Wolf Den #107 - Technical Analysis Is A Risk Management Tool
thewolfden.substack.com
I always start the newsletter with a shoutout to PHEMEX, but wanted to take the time to give a bit of extra thanks to their entire organization. I cannot stress enough how much I have enjoyed working with their team, helping to build the product and, most importantly, trading with confidence on their platform. I have been approached over the years by almost every single exchange in the space, with huge offers of compensation to promote their products. I passed on every one of these offers for over a year until I found Phemex. I chose to work with them because I truly believed that they had the interests of their customers first, that they had built a superior product and that they would be accountable for any issues and would resolve them quickly. All of these things have come true, so I can't thank them enough for their support. I ONLY PROMOTE PLATFORMS that I use, and this is presently the only place that I trade with leverage.If you are not trading there already (I know most of you are and love it), please consider signing up and testing it out. Use low leverage or trade spot, and practice good risk management! They are offering my subscribers a 10% discount on fees and some free Bitcoin for funding your account.https://phemex.com/a/ScottMelkerNote: Gmail has been truncating the emails. You can always click the link gmail provides to read the entire email.Far too many traders view technical analysis as a predictor of future events. They believe that they can see what is going to happen based on a few lines and candles on a chart. If this was the case, all technical analysts would agree on every chart pattern and all traders would be extremely wealthy with a strike rate of 100%. The reality is, you can show a chart to 100 traders and get 100 different interpretations of where price is headed. In that regard, it is a pseudo science at best and you should be wary of any trader who speaks in absolutes about what is going to happen. They’re trying to sell you something or are emotionally attached to their idea.A chart is merely an illustration of the emotions of the markets participants. Are they fearful? Are they greedy? At what point is the pendulum likely to swing between these two poles? That’s what we are looking to identify.So what is the purpose of looking at a chart at all? For me, a chart is a risk management tool and a way to approach a trade with a definitive plan. This includes where to enter a trade, where to exit in profit and where to set a stop loss at the invalidation point of my idea. Without a chart, managing risk becomes far more difficult, even if all of the lines, patterns and indicators are completely meaningless. At least the chart gives us actionable information. This is why I always say that your method of identifying trades is unimportant - it’s the way you use that method to manage your risk that matters, which is where the chart comes into play.CHARTS CANNOT TELL YOU WHAT IS GOING TO HAPPEN IN THE FUTURE!If you do desire to get this email more often, you can join the paid version!The paid version is only $15 a month and goes out 2 times every single week. It is just like the issue you are currently reading! Composing this newsletter is how I spend the majority of my time, and I take the fact that my members are paying me very seriously. I would love to have you become a more frequent part of this community.https://www.getrevue.co/profile/TheWolfDen/membersIf you cannot pay with a credit card, please respond to this email and we can get you setup with crypto. If you do want to pay with crypto, I can offer 7 months for the price of 6, or 14 months for the price of 12 for the inconvenience!I will be LIVESTREAMING today with my good friend CryptoISO at 2 PM EST. I will also be live at the same time tomorrow, charting paid member requests. Don't miss it! Here is today's link:https://youtu.be/SUK5dwN7oi4Here is tomorrow's link:https://youtu.be/5u76rBLBAI4In This Issue:Bitcoin Thoughts And AnalysisBitcoin Bullishness By IntoTheBlockEthereum AnalysisAltcoin ChartsLegacy MarketsPlan Your LossesValue At Risk 101Polkastarters ReviewUS Crypto Tax Payers Get A Bit More ClarityKanye West Talks CryptocurrencyChamath Palihapitiya Talks CyptocurrencyJack Ma Talks CryptocurrencyThe Bitcoin Rich ListThe Wolf Of All Streets Podcast Ft. Todd ShapiroMy Recommended Platforms And Tools
The Wolf Den #107 - Technical Analysis Is A Risk Management Tool
The Wolf Den #107 - Technical Analysis Is A…
The Wolf Den #107 - Technical Analysis Is A Risk Management Tool
I always start the newsletter with a shoutout to PHEMEX, but wanted to take the time to give a bit of extra thanks to their entire organization. I cannot stress enough how much I have enjoyed working with their team, helping to build the product and, most importantly, trading with confidence on their platform. I have been approached over the years by almost every single exchange in the space, with huge offers of compensation to promote their products. I passed on every one of these offers for over a year until I found Phemex. I chose to work with them because I truly believed that they had the interests of their customers first, that they had built a superior product and that they would be accountable for any issues and would resolve them quickly. All of these things have come true, so I can't thank them enough for their support. I ONLY PROMOTE PLATFORMS that I use, and this is presently the only place that I trade with leverage.If you are not trading there already (I know most of you are and love it), please consider signing up and testing it out. Use low leverage or trade spot, and practice good risk management! They are offering my subscribers a 10% discount on fees and some free Bitcoin for funding your account.https://phemex.com/a/ScottMelkerNote: Gmail has been truncating the emails. You can always click the link gmail provides to read the entire email.Far too many traders view technical analysis as a predictor of future events. They believe that they can see what is going to happen based on a few lines and candles on a chart. If this was the case, all technical analysts would agree on every chart pattern and all traders would be extremely wealthy with a strike rate of 100%. The reality is, you can show a chart to 100 traders and get 100 different interpretations of where price is headed. In that regard, it is a pseudo science at best and you should be wary of any trader who speaks in absolutes about what is going to happen. They’re trying to sell you something or are emotionally attached to their idea.A chart is merely an illustration of the emotions of the markets participants. Are they fearful? Are they greedy? At what point is the pendulum likely to swing between these two poles? That’s what we are looking to identify.So what is the purpose of looking at a chart at all? For me, a chart is a risk management tool and a way to approach a trade with a definitive plan. This includes where to enter a trade, where to exit in profit and where to set a stop loss at the invalidation point of my idea. Without a chart, managing risk becomes far more difficult, even if all of the lines, patterns and indicators are completely meaningless. At least the chart gives us actionable information. This is why I always say that your method of identifying trades is unimportant - it’s the way you use that method to manage your risk that matters, which is where the chart comes into play.CHARTS CANNOT TELL YOU WHAT IS GOING TO HAPPEN IN THE FUTURE!If you do desire to get this email more often, you can join the paid version!The paid version is only $15 a month and goes out 2 times every single week. It is just like the issue you are currently reading! Composing this newsletter is how I spend the majority of my time, and I take the fact that my members are paying me very seriously. I would love to have you become a more frequent part of this community.https://www.getrevue.co/profile/TheWolfDen/membersIf you cannot pay with a credit card, please respond to this email and we can get you setup with crypto. If you do want to pay with crypto, I can offer 7 months for the price of 6, or 14 months for the price of 12 for the inconvenience!I will be LIVESTREAMING today with my good friend CryptoISO at 2 PM EST. I will also be live at the same time tomorrow, charting paid member requests. Don't miss it! Here is today's link:https://youtu.be/SUK5dwN7oi4Here is tomorrow's link:https://youtu.be/5u76rBLBAI4In This Issue:Bitcoin Thoughts And AnalysisBitcoin Bullishness By IntoTheBlockEthereum AnalysisAltcoin ChartsLegacy MarketsPlan Your LossesValue At Risk 101Polkastarters ReviewUS Crypto Tax Payers Get A Bit More ClarityKanye West Talks CryptocurrencyChamath Palihapitiya Talks CyptocurrencyJack Ma Talks CryptocurrencyThe Bitcoin Rich ListThe Wolf Of All Streets Podcast Ft. Todd ShapiroMy Recommended Platforms And Tools