This is the updated
first part of the list that has recorded the notable events as the world deals with the COVID-19 pandemic. [2nd Part
] ― The LINKS to events and sources are placed throughout the timeline.
------------------------ The More Data We Collect and Analyze, the Clearer the Picture Becomes.
Someone threw a stone in a pond a long way away. And we're only just feeling the ripples. — Fukuhara from Giri/Haji, Netflix series
------------------------ On Jan 30,
Italian PM announced that Italy had blocked all flights to and from China. While Italy has banned people from air-travelling to China, however according to IATA data
, there's no measurement implemented for air-travellers from China into Italy till the Mar 07. Especially for Chinese people who have EU passports. On Jan 31,
the US announced the category-I
travel restrictions, barring all foreigners who have been in China for the past 14 days, with measures including the refusal of visas and mandatory quarantine.
• "Because the US focused on China and didn't expect the infected people's entry from Europe and the Middle East, the Maginot Line
was breached from behind. And so little of credible
data at the beginning made the US government to miscalculate its strategic response to the virus." — Dr. Zhang Lun
, currently a visiting scholar at Harvard (economics & sociology), during the interview
with ICPC on Mar 29. Also on Jan 31,
the WHO changed its tune and declared the coronavirus outbreak a Global Public Health Emergency
of international concern (PHEIC).
Decisions on a PHEIC always involve politics .... West African countries discouraged a declaration in 2014 after they were hit by the largest Ebola virus outbreak on record, mainly because of concern about the economic impact.
------------------------ On Feb 02,
regarding the US category-I travel restrictions, Kamala Harris, the former Democratic presidential candidate, declared
Since 2017, Trump’s travel bans have never been rooted in national security—they’re about discriminating against people of color. They are, without a doubt, rooted in anti-immigrant, white supremacist ideologies. This travel ban is no different. On Feb 03,
criticizing Trump for his travel restrictions continues. Chinese foreign ministry spokeswoman Hua Chunying (华春莹), a Peking University professors James Liang (梁建章), New York Times, the Nation, OBSERVER, the Boston Globe, Yahoo, and Daily Kos were saying,
it's a "panicky" decision and "racist" or it's "cruel and callous," he's stoking fear for political gains, and the president is "inappropriately overreacting." And professors Liang even said the US ban "will hurt goodwill and cooperation [with China] in the future." [1
] Also on Feb 03,
of the WHO said there's no need
for travel ban measure that "unnecessarily interfere with international travel and trade" trying to halt the spread of the virus.
China's delegate took the floor ... and denounced measures by "some countries" that have denied entry to people holding passports issued in Hubei province - at the centre of the outbreak - and to deny visas and cancel flights. Also on Feb 03,
China is expected to gradually implement a larger stimulus packages
(in total) than a USD $572 billion from 2008. — We'd never find out but my guess is that the fund will probably go to Shanghai clique. On Feb 04,
The FDA has given emergency
authorization to a new test kit by the CDC that promises to help public health labs meet a potential surge in cases.
The speed ... pushing through a new diagnostic test shows just how seriously they’re taking the potentially pandemic threat of 2019-nCoV. It’s also a sign that the world is starting to learn how to deal with an onslaught of new pathogens. Also on Feb 04,
the Wuhan Institute of Virology and China's Academy of Military Medical Sciences
(AMMS, Chief Chen Wei belongs to) have jointly applied to
patent the use of Remdesivir
. Scientists from both institutes said in a paper
published in Nature’s Cell Research that they found both Remdesivir and Chloroquine to be an effective way to inhibit the coronavirus. On Feb 06,
Jamestown Foundation, a Washington-based research & analysis unit, noted that with State Council of PRC praising his performance
of containing the pandemic situation, the council expanded
Li Keqiang's political control over Politburo Standing Committee of CCP. (Li Keqiang = Communist Youth League
= Shanghai clique) Also, on Feb 06,
as the US evacuation planes leave China, the wave of the US evacuees have arrived who are met by the CDC personnel at the quarantine sites
for screening, and those who were suspected of infection will be placed under quarantine for 14 days. Also, on Feb 06,
a CDC-developed lab test kit
to detect the new coronavirus began shipping to qualified US laboratories and international ones. — However, on Feb 12, the CDC said
some of the testing kits have flaws and do not work properly. The CDC finally ended up shipping the working test kits for mass testings on Feb 27. This was three weeks later than originally planned. On Feb 07,
China National Petroleum has recently declared
Force Majeure on gas imports. They are trying to create a breathing room for their foreign exchange reserves shortage. China's foreign exchange reserves fell
to mere USD $3.1 trillion in Oct. 2019. On the same day,
that PetroChina has directed employees in 20 countries to buy N95 face masks and send them home in China. The goal is to get 2 million masks shipped back. You can also find YouTube videos that show Overseas Chinese are scouring the masks at the Home Depot to ship them to China (the video
in Korean). Also Chris Smith
is pissed. On Feb 09,
his national emergency on its southern border, and Elizabeth Goitein from the Brennan Center for Justice, published an opinion
article on New York Times titled "Trump Has Abused This Power. And He Will Again if He’s Not Stopped." On Feb 10,
Dr. Tedros said
that an advance three-person team of the WHO arrived in Beijing for a joint mission to discuss with Chinese officials the agenda and questions. Then, the joint mission of about 10 international experts will soon follow, he said. — Those WHO experts ended up visiting
Chinese epicentre for the first time on Feb 24. On Feb 12,
the US targets
Russian oil company for helping Venezuela skirt sanctions. The US admin seemingly tried to secure leverage against Russia after noticing something suspicious was up. On the same day,
Reuters "I hope this outbreak or this event (for the US) may be over in something like April." — Dr. Zhong Nanshan
(钟南山), China's top tier SARS-hero doctor, also said
"the peak of the virus (for China) should come in mid to late February, followed by a plateau or decrease," adding that his forecast was based on on mathematical modelling and data from recent events and government action. On Feb 13,
Tom Frieden who is a former US CDC chief and currently the head of public health nonprofit Resolve to Save Lives, said
As countries are trying to develop their own control strategies, they are looking for evidence of whether the situation in China is getting worse or better. [But] We still don't have very basic information. [since the WHO just entered China] We hope that information will be coming out. On the same day,
the CDC reports that the 15th
case in the US was confirmed. The patient was a part of group who were under a federal quarantine order at the JBSA-Lackland base because of a recent trip to Hubei Province, China. By Feb 13,
accepted the US CDC's offer to send top experts, and they haven't released the "disaggregated
" data (specific figures broken out from the overall numbers) even though repeatedly been asked. On Feb 14,
CCP's United Front posted an article
on its official website, saying (Eng. text by Google Translation):
Fast! There is no time difference to raise urgently needed materials! Some Overseas Chinese have used their professions in the field of medicine in order to purchase relevant materials Hubei province in short of supply (to send them to China). .... Some Overseas Chinese took advantage of the connection resources, opened green transportation channels through our embassies and consulates abroad, and their related enterprises, and quickly sent large quantities of medical supplies (to China), making this love relay link and cooperation seamless. On Feb 18,
that 3M is on the list of firms eligible for China loans to ease coronavirus crisis.
There is no indication from the list that loans offered will necessarily be sought, or that such firms are in any financial need. The Bank of Shanghai told Reuters it will lend 5.5 billion yuan ($786 million) to 57 firms on its list. On Feb 21,
Xi Jinping writes a thank-you
letter to Bill Gates for his foundation’s support to China regarding COVID-19 outbreak. On Feb 24,
China was rumoured on Twitter to delay the phase one trade deal implementation indefinitely which includes the increase of China's purchasing American products & services by at least $200 billion over the next two years. Also on Feb 24,
S&P 500 Index started to drop. Opened with 3225.9 and closed 3128.2. By the Mar 23, it dropped to 2208.9. Also on Feb 24,
China's National Health Commission says the WHO experts have visited
Wuhan city for the first time, the locked-down central Chinese city at the epicentre, inspecting two hospitals and a makeshift one at a sports centre. On Feb 26,
IF the picture
that has been circulated on Twitter were real, then chief Chen Wei and her team have developed the first batch of COVID-19 vaccine within time frame of a month. On the same day,
the CDC's latest figures displays 59 people
in the US who have tested positive for COVID-19. Also on Feb 26,
the Washington Post published an article
.... the WHO said it has repeatedly asked Chinese officials for "disaggregated" data — meaning specific figures broken out from the overall numbers — that could shed light on hospital transmission and help assess the level of risk front-line workers face. "We received disaggregated information at intervals, though not details about health care workers," said Tarik Jasarevic of the WHO. — The comment, in an email on Feb 22 to the Post, was one of the first instances that the WHO had directly addressed shortcomings in China's reporting or handling of the coronavirus crisis. On Feb 27,
, the CDC says its test kit is ready
and the US started to expand testing. On Feb 28,
China transferred more than 80,000 Uighurs
to factories used by global brands such as Apple, Nike, & Volkswagen & among others. Also on Feb 28,
the WHO published the official report of the WHO-China joint mission on coronavirus disease 2019. (PDF) On Feb 29,
quoting Caixin media's investigation
published on the same day, Lianhe Zaobao, the largest Singapore-based Chinese-language newspaper, published an article
reporting the following:
Dr. Li Wenliang said in the interview with Caixin media; [in Dec 2019] another doctor (later turned out to be Dr. Ai Fen) examined and tried to treat a patient who exhibited SARS-like symptoms which akin to influenza resistant to conventional treatment methods. And "the family members who took care of her (the patient) that night also had a fever, and her other daughter also had a fever. This is obviously from person to person" Dr. Li said in the interview."
------------------------ On Mar 01,
China's State Council super tighten up their already draconian
internet law. On the same day, Princelings
published an propaganda called "A Battle Against Epidemic: China Combating COVID-19 in 2020" which compiles
numerous state media accounts on the heroic leadership
of Xi Jinping, the vital role of the Communist Party, and the superiority of the Chinese system in fighting the virus. Starting on Mar 03,
the US Fed has taken two significant measures
to provide monetary stimulus. It's going to be no use as if a group of people with serious means are manipulating the markets to make sure MM will have liquidity concerns when they need it most. On Mar 04,
Xinhua News, China's official state-run press agency posted an article
"Be bold: the world should thank China" which states that
If China retaliates against the US at this time, it will also announce strategic control over medical products, and ban exports of said products to the US. ... If China declares today that its drugs are for domestic use only, the US will fall into the hell of new coronavirus epidemic. On Mar 05,
Shanghai Index has recovered
the coronavirus loss
almost completely. On Mar 07,
Saudi's Ahmed bin Abdulaziz
and Muhammad bin Nayef were arrested on the claims of plotting to overthrow King Salman. — Ahmed bin Abdulaziz is known to have very tight investment-interest relationship
with Bill Gates, Bill Browder, Blackstone, & BlackRock: One common factor that connects these people is China. On Mar 08,
the Russia–Saudi oil price war has begun.
The ostensible reason was simple: China, the biggest importer of oil from Saudi and Russia, was turning back tankers
while claiming that the outbreak forced its economy to a standstill. On Mar 10,
the Washington Post published the article
saying that the trade group for manufacturers of personal protective equipment urged in 2009 "immediate action" to restock the national stockpile including N95 masks, but it hasn't been replenished since. On Mar 11,
the gentleman at the WHO declares
the coronavirus outbreak a "Global Pandemic." He called on governments to change the course of the outbreak by taking "urgent and aggressive action." This was a full twelve days after the organization published the official report regarding the situation in China. On Mar 13,
the US admin declared
a National Emergency and announced the plan to release $50 billion in federal resources amid COVID-19. Also on Mar 13,
China's Ministry of Commerce states
that China is now the best region for global investment hedging. On Mar 15,
Business Insider reports
that Trump tried to poach German scientists working on a coronavirus vaccine and offered cash so it would be exclusive to the US. The problem is the official CureVac (the German company) twitter account, on Mar 16, 2020, tweeted the following
To make it clear again on coronavirus: CureVac has not received from the US government or related entities an offer before, during and since the Task Force meeting in the White House on March 2. CureVac rejects all allegations from press. On Mar 16,
the fan club of European globalists has published
a piece titled, "China and Coronavirus: From Home-Made Disaster to Global Mega-Opportunity." The piece says:
The Chinese method is the only method that has proved successful [in fighting the virus], is a message spread online in China by influencers, including many essentially promoting propaganda. ... it is certainly a message that seems to be resonating with opinion leaders around the world. On the same day,
unlike China that had one
epicentre, Wuhan city, the US now overtakes
China with most cases reporting multiple epicentres simultaneously
. Also on Mar 16,
the US stocks ended sharply lower
with the Dow posting its worst point drop in history. But some showed a faint hint of uncertain hope
. On Mar 17
, according to an article on Chinese version of Quora, Zhihu
, chief Chen Wei and her team with CanSino
Biologics officially initiated a Phase-1 clinical trial for COVID-19 vaccine at the Wuhan lab, Hubei China, which Bloomberg News confirmed
. — Click HERE
, then set its time period as 1 year, and see when the graph has started to move up. Also on Mar 17,
China's state media, China Global TV Network (CGTN
), has produced YouTube videos
for Middle Eastern audiences to spread the opinion that the US has engineered COVID-19 events. Also on Mar 17,
Al Jazeera reported
that the US President has been criticized for repeatedly referring to the coronavirus as the "Chinese Virus" as critics saying Trump is "fueling bigotry."
• China's Xinhua News tweeted
"Racism is not the right tool to cover your own incompetence."
• Tucker Carlson asked
: "Why would America's media take China's side amid coronavirus pandemic?"
• Also, Mr. Bill Gates
: "We should not call this the Chinese virus." On Mar 19,
for the first time, China reports
zero local infections. Also on Mar 19,
Al Jazeera published an analysis
report, titled "Coronavirus erodes Trump's re-election prospects." On Mar 22,
that China's mobile carriers lost 21 million users during this pandemic event. It's said to be the first net decline since starting to report monthly data in 2000. On Mar 26,
that China cashes in off coronavirus, selling Spain $466 million in supplies. However, Spain returns 9,000 "quick result" test kits to China, because they were deemed substandard. — Especially the sensibility of the test was around 30 percent, when it should be higher than 80 percent.
------------------------ On Apr 03,
Germany and other governments are bolstering corporate defenses
to address worries that coronavirus-weakened companies could be easy prey for bargain hunting by China's state owned businesses. On Apr 05,
New York Times says
"Trump Again Promotes Use of Unproven Anti-Malaria Drug (hydroxychloroquine)." On Apr 06,
a Democratic State Rep. Karen Whitsett from Detroit credits hydroxychloroquine
and President Trump for "saving her in her battle with the coronavirus." On Apr 07,
the US CDC removed
the following part from its website.
Although optimal dosing and duration of hydroxychloroquine for treatment of COVID-19 are unknown, some U.S. clinicians have reported anecdotally different hydroxychloroquine dosing such as: 400mg BID on day one, then daily for 5 days; 400 mg BID on day one, then 200mg BID for 4 days; 600 mg BID on day one, then 400mg daily on days 2-5.
☞ If there were ever a time for people not to be partisan and tribal, the time has come: We need to be ever vigilant and attentive to all kinds of disinformation & misinformation to see it better as well as to be sharp in our lives. — We really do need to come together.
☞ At first, I was going to draw up a conspiracy theory-oriented list focused on Team-Z
, especially Mr. Gates. However, although it's nothing new tbh, recently many chats and discussions seem overflowing with disinformation & misinformation which is, in my opinion, particularly painful at a time like this. Hence, this post became a vanilla list that's just recorded the notable events. — We all are subject to misinformation, miscalculation, and misjudgment. But the clearer the picture becomes the better we can identify Funkspiel.
☞ Immediate Aftermath pt.2.a
☞ Feasible Timeline of the Operation
☞ Go Back to the Short Story
*Introductions: I'm joskye. A cryptocurrency investor and holder. *
Hi again. This is the third part in our ongoing series on how to trade better and determine intelligent investments in cryptocurrency for the future.
- In part 1 I talked about the importance of selling enough to make back your principle investment i.e. if you buy something at $300 and it rises to $600 in value, sell $300 to eliminate all future risk of personal loss e.g. if that asset falls to $150 in value after (which can happen easily since suchvolatility is very common in cryptocurrency). In cryptocurrency trading/investments a 100% return of investment should always prompt you to consider selling 1/2 your stack.
- In part 2 I talked about the psychology behind fear of missing out; i.e. the dangers of buying during a sudden rise in an asset's price and how to make the most of such rallies whilst minimising the risks involved in joining them.
- In part 3a I discussed The importance of a value proposition and the absolute need for any cryptocurrency you invest in to already generate or have the potential to generate revenue in a manner completely independent of it's speculative value as dictated by daily market prices.
Part 3b continues where I left off with a discussion about price metrics specifically, what determines the price
and the importance of liquidity
... The day traders:
As I mentioned in my previous article, as of writing almost every cryptocurrency is determined purely by speculative value.
- Thus the absolute price of a given cryptocurrency is determined solely by the day traders and specifically the last price it was agreed that currency would be sold at with confirmation of that price by a buyer who bought it.
- People say lots of things determine the price; marketcap, liquidity, value proposition, revenues generated by the coin, the number of said coin in circulation but ultimately it comes down to the number of buyers and number of sellers competing for that coin.
- Perhaps the other thing is the size of said market relative to the money held by the players in it.
For instance in cryptocurrency Bitcoin is still the biggest player in the game. It carries a per unit price of $900 per coin. There are currently 16,090,137 (16 million) coins in circulation giving it a total marketcap value of [$900 x 16090137 =] $14481123300 or 14.48 billion USD.
- This is 85% of the current cryptocurrency marketcap. (The total marketcap of all cryptocurrencies as of writing is 17.17 billion USD.)
- Compare and contrast Shadowcash (SDC) which has a unit price of $1.27 with 6,616814 coins in circulation giving it a total marketcap value of [$1.27 x 6616814=] $8392766 or 8.39 million USD.
- Thus Shadowcash in comparison to Bitcoin is a tiny cap of the cryptocurrency sphere. Shadowcash has a total value that is only 0.06% of Bitcoin when comparing marketcap's.
Shadowcash looks even more meagre compared to the total cryptocurrency marketcap with only 0.048% of the total cryptocurrency sphere. To any Shadowcash holders despairing at this point, relax. There are over 707 cryptocurrencies trading as of writing and SDC holds the 27th ranking in terms of market cap. In such a competitive field, filled with scams that's pretty good. Moreso when you consider that SDC is a legitimate technology and is currently probably very undervalued.
... Lets look at the rich list for bitcoin:
Why did I just talk about this?
- The top holder has 124,956 Bitcoin valued at $1,12460400 or 1.24 billion USD.
- The top SDC holder has 1027261 SDC valued at $1,304621 or 1.4 million USD.
- Thus the wealth of the top SDC holder is 1.16% that of the wealth of the top Bitcoin holder.
- Well they say that a big fish can easily occupy, make a splash in and empty a small pond just by diving in.
In cryptocurrency I see this happening on the markets all the time
. Indeed market manipulation effects every single cryptocurrency eventually
... Market manipulation!
Large holders of valuable, high marketcap coins will often make multiple small volume purchases of less valuable, low marketcap coins. Often this will follow announcements regarding developments in that low marketcap coin.
- An example of low volume ordering is buying 1 SDC at $1.20, 0.5 SDC at $1.2001, 5 SDC at $1.2010, 3 SDC at $1.21, 10 SDC at $1.22 and 0.11 SDC at $1.24, but then leaving someone else to fill the order for 100 SDC priced at $1.242.
- Thus by spending $23.77, in low volume purchases the buyer can raise the market cap of SDC from ($1.20 * 6,616814 coins) $7.94 million to (1.24 * 6,616814) $8.20 million! (4.2% increase).
Low volume buying in a market with low daily trading volume can gradually drive up the price attracting an influx of buyers into that coin; often they will make larger volume purchases of it which helps drive up the price much further. This will trigger a further chain of buyers experiencing FOMO (fear of missing out, detailed in Part 2) who will drive up the price even further. The price will pump.
Often will smaller cap cryptocurrencies this may result in a sudden 20, 40, 60 or even +100% increase in value often over a very short time space (1-2 days, 1-2 weeks maximum).
The only way to discern if the sudden rise in coin value is due to pre-rigged market manipulation is to look at:
- Often the original purchaser who triggered these events will have accumulated a lot of said cryptocurrency cheaply prior to or during the early stages of the pump and will wind up selling the majority of his/her's purchases when the price reaches a peak; usually when the daily/hourly trading volume on that coin starts to decline but sufficient buyers are still available.
- This results in a sudden or often more gradual dump in the coins value, usually by falling by 75% or more of the rise.
You are looking for organic, gradual growth based on a solid value proposition.
- the value proposition of that coin (discussed extensively in part 3a of this guide)
- the order book
- the depth chart
- the pattern of change on daily trading volume (and liquidity)
- the price charts (15 minute, hourly, 1 day, 3 day, 7 day, 1 month, 6 months)
- the news cycle relevant to that coin
Sudden large spikes in value should make you pause and wonder if it's worth waiting for a gradual correction (organic drop) in price before entering your buy order. Do not fall for a pump and dump.
Stick to the lessons covered in previous parts of this guide (especially part 3a and 2) and you will be much less likely to lose money in the long run trading and investing in cryptocurrencies.
... The pattern of change on daily trading volume, the order book and liquidity:
Lets look at SDC and Bitcoin again. This time we are going to compare the daily trading volume (last 24 hours) in USD.
- In the last 24 hours (dated 8th Jan 2016), SDC traded a total volume of $26,033. This is 0.01% of all USD daily trading volume on exchanges and only 0.39% of the total marketcap of SDC.
- In contrast Bitcoin traded $163,306,776 ($0.16 Billion) over the same 24 hour period. This is 76.15% of USD daily trading volume on exchanges and only 1.12% of it's total marketcap.
I'd just like to use this opportunity to point out and reinforce the idea that day traders not holders dictate the daily price of an asset
. I'd also like to point out daily global trading volume on Forex is $4800 billion which makes Bitcoin a very small fish
in the broader arena of global finance and trade i.e. Bitcoin is still very vulnerable to all the price manipulation tactics and liquidity issues I am going to be describing in this article
by bigger players with richer pockets.
The daily trading volume also gives you an idea of how much fiat currency you can invest into a given cryptocurrency before you suddenly shift the price.
- The numbers means that just because the marketcap of Bitcoin is $14 billion, that does not mean that there is truly $14 billion worth of fiat currencies (USD, Yuan, Euro etc) in Bitcoin; the total fiat volume is merely an estimate based on current price and number of Bitcoin in circulation.
A sudden rise in coin price heavily out of proportion to the rise in daily trading volume should be the first sign to alert you to a pump & dump scam.
- For example based on the 24 hour daily trading volume for SDC I know that if I blindly spent $15,000 (57% of the daily trading volume) buying SDC without any regard to the price, I can be confident that I will likely cause the price of SDC to go up significantly.
- In contrast spending $15,000 to buy Bitcoin (0.0092% of the daily trading volume) without regards to it's price, I can be confident that it will not likely cause a significant rise in the daily spot price of Bitcoin.
Daily trading volume should show a steady increase over time with sustained buy support at new price levels; this is a good marker of organic, sustainable growth.
- It implies a low volume trading at low prices to trick the unseasoned trader to perpetuate higher volume, high price buys.
- If daily trading volume cannot organically increase to sustain the price, it will eventually fall when the original pumper (or group of pumpers) sell to take their profits.
- This does not always have to be the case! Sufficiently large price movements (several 1000%) can significantly raise the next absolute low in price for the mid-term (months) even if that is several 100% lower than the peak!
- Conversely declining trading volumes indicate loss of interest in the coin and a price that is potentially more prone to and at risk of price manipulation with smaller amounts of fiat/bitcoin (than if higher daily trading volumes existed).
- Finally the fact that daily fiat trading volume for Bitcoin and Shadowcash is such a small percentage of it's total marketcap reinforces the idea that price is set by day traders not by holders!
... For more detail you can now look at the depth chart: The depth chart is very useful to know how much fiat currency is required to cause the spot price of a given cryptocurrency to rise or fall by a given amount.
NB the price of most cryptocurrencies is expressed in Bitcoin
- The depth chart groups different bids (buy orders) and asks (sell orders) by price and volume e.g. 17.739 bitcoin worth of SDC are currently on sale at poloniex for 0.00117500 bitcoin each ($1.07 per coin) and 0.149 Bitcoin are on sale at the current spot price of 0.00135750 Bitcoin ($1.24)
- So as of writing, I can see (from the charts) to raise the price of SDC from 0.00135750 Bitcoin ($1.24) to 0.00181381 Bitcoin ($1.66) I would need to spend 26 Bitcoin ($23783).
because it has the largest market cap and daily trading volume of all cryptocurrencies by a very large margin
and because with a few exceptions (Ethereum, Monero) most cryptocurrencies do not have routes to directly purchase via fiat currency without first purchasing Bitcoin.
- The depth chart shows me how many coins I can buy without significantly increasing the price and how many coins I can sell within a given price range. It gives me an idea of the liquidity and volatility of the market i.e. if I buy SDC right now and need to sell it later today or tomorrow for fiat, what is the realistic probability I can get my entire amount in fiat returned to me in the amount originally spent.
Liquidity is super important. People often complain about a market lacking liquidity but that is often because they are trading in fiat volumes which far exceed the daily trading fiat volumes of the cryptocurrency they are referring to. If you are investing or trading in a cryptocurrency, always factor in the your personal liquidity and need for liquidity relative to that of the cryptocurrency you are investing in.
In other words don't expect to make a profit next day selling 'cryptocurrency x' if the size your single buy order composes >90% of the buy orders on the market for 'cryptocurrency x' that day (indeed in such a scenario be very prepared to sell at a loss next day if you absolutely have to)!
- The depth chart also gives me an idea of where significant supports exists (price zones with large buy orders relative to the depth chart) to determine the true base price (in conjunction with daily trading volume) and where significant resistances exist (price zones with large sell orders relative to the rest of the depth chart) to determine what the majority of sellers think the coin is truly worth. Be wary though as buy walls (large supports) and sell walls (large resistances) can be moved at any time.
There are certain patterns on a depth chart that make me believe a significant, sustained price rise is imminent: One example occurs when there is a very large volume of buy orders (>25% of total buy volume within 5% of current price) very
close to the current (spot) price, and a very
large number of sell orders close to but significantly above the spot price (approx 25% total sell volume within 10% of current price) and especially if the total buy order volume is a significantly higher percentage than it has previously been.
This simply indicates high demand at current price which may soon outstrip supply. Again I stress that these patterns can be manipulated easily by wealthy traders.
- It is up to you to study the depth charts and discern the patterns. You will learn more about day trading this way.
... The order book is another way of looking at the depth chart and allows you to see the specific transactions occurring that compose daily trading volume by the second!
I find it useful because it allows me to identify:
- If there is a string of low volume orders that can be filled to pump the price (or conversely a string of low volume sell orders to dump it). This can play on the psychology of the entire market as many people aren't simply aware of how the manipulations occur; most people simply look at the price!
- Where resistances to price change occur and how much money it will take to break them (i.e. if I am day trading to make a profit via pumping, is it worth me spending X to clear a sell wall to encourage others to buy and push up the price further or do I need to spend so much of my capital that should I fail to stimulate buy orders, I become vulnerable to a dump in coin price with effective subsequent loss of fiat money).
- The presence of automated trading bots rapidly cycling a buy or sell order of fixed volume between a series of prices that dynamically adjust with the overall trend in price movements. Bots can be your best friend (to pumping or dumping price) if you know how to manipulate them!
... The price charts:
Discussions about price charts could be endless. I'm not going to go into too much detail, mostly because I'm an investor who believes the value proposition, good consistent development, decent marketing and communications will ultimately trump spot prices and adverse (or positive) short term price trends in the future.
- I'm also going to skim this because I'm not as versed in this subject as I'd like to be.
- I personally use the candle bar charts on Poloniex to look at 15 minute and daily candles on the hourly, daily, weekly and monthly charts.
- I combine this with charts on Bittrex which can calculate the RSI (to estimate if a coin is overbought or oversold) and Bollinger Bands (again to help estimate if a coin is overbought or oversold).
- I usually look at the overall direction of trading over a period of several days, compare it to the direction and trends over the last month. I then try to interpret it in the context of the daily trading volume and depth charts.
- I often get my predictions on short term price movement wrong if I only look at candle charts without factoring in depth charts, order book and daily trading volume patterns! I have a lot more learning to do on technical analysis.
- The charts do often reveal mid/long term supports and resistances in price!
- Investopedia is a good place to start learning about different mathematical techniques to analyse charts (including any terms used in these articles).
- I'm a big fan of u/kustonoy who inhabits the Ethtrader sub. I personally feel his analysis of the short term markets are generally pretty good. You should never be too lazy to not do your own regular market analysis especially if trading short term, but if you want a good reference point, I suggest following him.
... The news cycle:
- I've mentioned this lower down the list because for intra-day and day traders and even to some extent investors, the news cycle matters very little unless it directly affects the value proposition in some way.
- If a news event does result in real maturation of the proposed value proposition (such that the technology has confirmed a new sustained user base or revenue stream) then it might justify a sustained rise in price regardless of the volatility achieved reaching and following the peak.
- Some assets may have nothing but an endless stream of good news which meets the above criteria yet it's valuation fails to increase. This is likely a sign that a larger player is deliberately manipulating the market to accumulate more of that asset to sell very high later (I believe Ethereum has fallen victim to this recently) or that it is occuring during long period of consolidation is where diversification of asset ownership is happening which means a new price floor is being set for much larger increases later on. The lowest most frequently occurring point which the price repeatedly bounces off of (stops falling below) is the new floor.
... Other interesting points: The 'coin x' scenario and the ridiculousness of marketcap:
'Coin X' is an imaginary hypothetical coin. There are only 10 in circulation. It has no value proposition beyond it's speculative value i.e. it will never generate a revenue independent of it's speculative value.
- If 'coin x' had only 10 in circulation, was indivisible and each coin had a value of $3 billion, the market cap of 'coin x' would surpass Bitcoin!
- If all 10 coins were not on sale then 'coin x' would have a value of zero.
- If 9 people had bought 'coin x' at $1 and the 10th person bought it at $3 billion, it's marketcap would still be $30 billion. This does not mean there is $30 billion of fiat stored in coin X.
- If an 11th buyer came along and bought 'coin x' at $1.20 the price of coin X would fall to $1.20 and the marketcap of 'coin x' would be $12.0.
- This still does not mean there is $12 of fiat stored in coin x.
- This does not mean everyone can sell 'coin x' at $1.20.
- A new buyer blind to the purely speculative nature of 'coin x' looking at the trend charts could try to argue it is now extremely undervalued and a great buy or possibly was a grand scam and untouchable.
- Either way the next price at which 'coin x' is bought/sold is purely arbitrary and determined by the patience of the seller and the impatience of the buyer.
- [Edit]: I could also issue 10 more of 'coin x' and if it's unit price remained $1.20 the market cap would instantly double from $12 to $24!
I'd like to point out the similarities between ZCash and 'coin x' (especially during it's launch).
- Marketcap is derived from the price, not the other way around. Until a cryptocurrency generates significant revenue independent of it's speculative valuation this will remain the case.
- Price is determined by the day traders, not by the holders.
- The spot price of any given cryptocurrency is determined by the patience of the seller and the impatience of the buyer.
- Price of most cryptocurrencies is derived from bitcoin unless they have a direct fiat gateway. Unless a significant amount of trading volume occurs via the fiat gateway, the price of that cryptocurrency is still heavily dependent on the price of bitcoin.
- Bitcoin is (for now) is the gold standard of cryptocurrencies. Because it has the largest marketcap (by a very massive margin).
- Market manipulation means that large holders in more valuable currencies (large marketcaps) can tamper with and set the value of much smaller currencies (i.e. smaller marketcaps).
- Bitcoin's price itself can be manipulated by investment banks, governments or firms who trade in multi billions of USD daily. This is because the daily trading volume is almost 5 trillion trillion USD (which is several thousand times larger
- There is nothing wrong with investing or trading in cryptocurrencies with low daily trading volumes and marketcaps, just be concious not to put more money into them than their long term buy support can handle and only invest what you can afford to lose.
- The concept of liquidity in a market is important relative to the amount of fiat you are planning to invest or trade in it.
- Whether day trading or investing, pick cryptocurrencies with good fundamentals i.e. excellent development teams, good marketing and strong value propositions that will provide the cryptocurrency in question use and value independent of speculative valuations. You are less likely to get manipulated or scammed in the long run that way especially if you are a holder.
- Be very weary of trading or investing small amounts of money in larger markets that allow leveraged trading. Those markets will behave irrationally and not follow the fundamentals in the short term.
- It is up to you to study the depth charts, order books, candle bar charts, daily trading volumes and news cycle to discern the patterns. The price is a composite of this and the psychology of people who don't understand this. You will learn more about day trading this way and more importantly learn to trade/invest independent of the price.
- Coin market capitalisations and data including rich lists derived from:
1. Coinmarketcap rankings: https://coinmarketcap.com/all/views/all/ 2. Coinmarketcap daily trading volumes https://coinmarketcap.com/currencies/volume/24-hou 3. Bitinfocharts - Top 100 Richest Bitcoin addresses: https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html 4. Crypto ID - Shadowcash Rich list: https://chainz.cryptoid.info/sdc/#!rich
... Further articles in this series: "The intelligent investors guide to cryptocurrency"
Part 0 -
Part 1 -
Part 2 -
Part 3a -
Part 3b -
Part 4 -
Part 5 -
Part 6 -
Part 7a - "The intelligent investors guide to Particl -" Full disclosure/Disclaimer:
At time of original writing I had long positions in Ethereum (ETH), Shadowcash (SDC), Iconomi (ICN), Augur (REP) and Digix (DGD). All the opinions expressed are my own.
I cannot guarantee gains; losses are sustainable; do your own financial research and make your decisions responsibly. All prices and values given are as of time of first writing (Midday 8th-Jan-2017). Second disclaimer: Please do not buy Shadowcash (SDC), the project has been abandoned by it's developers who have moved on to the Particl Project (PART). The PARTICL crowd fund and SDC 1:1 token swap completed April 15th. You can still exchange SDC for PART but only if it was acquired prior to 15th April 2017 see: https://particl.news/a-community-driven-initiative-e26724100c3a for more information. Addendum:
Article updated 23-11-2017 to edit references to SDC (changed to Particl where relevant to reflect updated status) and clean up formatting.
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