This sub would benefit from a growth mindset on investing and trading

A common perspective here is that all technical analysis and data are useless, that all YouTubers are shit, and that there is no way to predict the market above chance level. This perspective makes traders and investors feel as if they have very little control over their situation, similar to how a fixed mindset hampers learning. With this in mind, it is not surprising that DCA is so popular here. DCA keeps it simple and takes away the variance of the market to some degree (that cannot be predicted). My thesis is that this view might be detrimental to personal growth for many here and hamper their finances, as there is a lot of valuable information out there that can help make more favorable trades. In this post, I will elaborate my position.

Disclaimer: First I would like to acknowledge that there is indeed a lot of shit on YouTube and Twitter (e.g., Bitboy, The Moon) , and that some technical analysis and indicators indeed lack substance (e.g., Plan B's useless model, which has no predictive value). Moreover, one source is often not enough for a good and complete view and it is difficult to gauge what the quality is of information out there is. That is why learning is so important.

Anyways, lets start. I think it is important to realize that trading and investing is a profession and that there are many people who make a lot of money doing this. These people are generally very skilled at what they do. Many have rich knowledge of the markets and technical analysis and use their knowledge to make money, lots of money. They know that this is a game of playing the odds. They try to pick a position where the potential reward outweighs the risk, so when the odds are favorable. One trade could still go wrong, of course, and that is why they often use stop losses. However, with large enough sample size, the variance is gone and it is just a measure of skill, similar to how poker experts make a lot of money. The more skilled, the more money they make. Such is the law of statistics.

I argue that there is value in Fibonacci Levels, in chart patterns, in Elliott Wave theory, and in key indicators (e.g., Pi cycle Indicator, MRV indicator, RSI). They might not always work, but they help one get an advantage, especially when multiple of these indicators align. Do they give perfect information? No. But they help beat the odds, help you choose when to invest and when to take some profits.

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Example

When one looks at the total market cap of crypto, a lot of information can be gained. Note that this chart has the 200 weekly moving average shown (orange line) and Fibonacci levels drawn from the 2017 top to the 2018 bear.

https://preview.redd.it/9ebzawtxtmk91.png?939&format=png&auto=webp&s=54d2fa00fcafc82ed4d19a8e72f0c1a43784a972

What can we observe?

• The May 2021 top happened at the 3.618 Fib extension (drawn from 2017 top to 2018 bear low). that would have been a great moment for some profit and to derisk! Getting near the top here.
• The Nov 2021 crash started when the total market cap hit the 4.236 Fib extension. This is a key level where we typically see downside - lots of downside. This happened every time in the past when an extension was hit too. Note that we did always go above this level again at some point, but not after a significant rejection and lots of downside.
• Note that there was also clear hidden bearish divergence, as indicated by the blue lines. Price was up a little yet RSI was down a lot. It is no surprise that this caused big players to derisk. The strenth in the market was already much lower.
• The 1.618 fib was the point that held in the summer of 2021. It could not be cracked. Great point for longs and to reaccumulate.
• We just bottomed (for now) exactly on top of the 2017 all time high of 765 billion - the 1 fib. This would have been a great place to place some bets/long. We rejected off of the 1.618 fib again - a place that was previous support now turned resistance.
• We held the 200 weekly MA (orange line) on the total market cap and that is where we have been bouncing so far.

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This is just a small example of information. Some people on Twitter and YouTube (e.g., Nebraskangooner, BlockChainBacker) present such information - they are experts. Some of the people I follow very accurately predicted where the top and bottom would be. They are not always right, of course. But the information is incredibly valuable. If you want to improve at investing and trading, there is a lot of relevant information out there. You just have to find it. If you learn to understand what they are presenting, you can use the information and make better informed decisions. But if you keep believing that there is no information to be gained, you will not improve - at least not much.

As a last note, I understand that this information is not for everyone - that many people are perfectly content DCAing. That is fine. I also understand this goes against the general consensus here that all information out there is shit. But in my humble opinion, data is not perfect but very useful. I will most certainly be investing low here at key Fib levels and take profits when we go into a proper retracement again.

PS. Who am I? A scientist working at a university, learning about trading and investing (in my spare time)