When to get out

Student Question: qualify a few technical reasons that would've helped understand the Crypto Alts market turn (to bearish) in March 2024?

Answer: first and foremost:

top down approach (=zoom out, not just daily calls but weekly and monthly ones as well)

I posted this on the 19th of March:

this sign comes out only 2-3 times a year if even

but I assume you want to know why I liquidated my entire crypto portfolio that day

I was leveraged up meaning I had accumulated since mid November 2022 a boatload of runners

and when it comes to runner exits it is always a case of

How much (risk)for how much(gain)

The following are a few edges i marked down at that point in my journal but there was a whole array of synchronicities that got the "turning point sign out" including inter market relationships

but the most obvious provides for a compelling case itself:

this weekly chart speaks volumes:

prices had more than quadrupled in bitcoin in less than six quarters

we have a wide double top from November 2021

we went to these highs above 70k in a hurry-see the standard deviation lines and how price is super extended beyond a mathematical average/balance=action/reaction principle in place

on the day the very right weekly red doji bar is closed is when i posted the turning point sign

why?-because it is the very first indication that the market is inhaling for a breather

we do not know if we get a retracement yet it might get just sideways but:

how much for how much

no need for greed even runners made a killing at this point so why not exit

(I didn't get out of all my bitcoin runners but i consider altcoins the high risk aspect of the crypto exposure-it is my beta, it is typically illiquid and moves beta and is leverage-so that's what i cut first)

and alts didn't perform as well as BTC at all:

while BTC had made a wide double top near all time highs, this is what the alts did:

and near the 200SMA, beauty principle resistance

hammer at $20 strong resistance

distribution zone at 200SMA

relative weakness towards BTC

just step through the entire portfolio and you will find the same picture over and over again

so there is no indicator sophistication and inter market relationship complexity necessary to see a fairly blunt picture of a overbought market near a strong distribution zone with a higher than not likelihood of a retracements, so with an immediate breakout scenario very limited cashing in and rather looking for lower level repurchasing seemed the obvious choice and cutting the lower performing, relative weaker alts to cut first seemed also to be the prudent move

these indications were confirmed by:

got further confirmed by a double top:

and furthermore a double pair of double tops

at which point I paired out with more BTC runners and posted as such as well

and now we are getting close to the mean for a possible supply zone:

(the typically much more influential aspect is psychology and the best way to see markets for what they are and not for what one would like them to be is to trade the highly leveraged beta aspects like alts in a very modest way of trading size to keep ones mindset balanced and execution fluent as a result)

Reading through the above am sure isn't an eye opening experience and does not bring new technical analysis aspects, so the question remains on why you weren't acting in your own best interest or even more likely not even seeing the market at the time like this and the simplified answer is

because you held a position

which literally altered your market perception

now the Quad exit provides very practical solutions to this and if you did at that time not at least finance your alts or better yet have all second targets met, reducing your risk to only get stopped out at runners near break even entry levels (or still hold them depending on how low you acquired your positions, than the pain right now can be used to commit to techniques like this r i g h t n o w

In case you already employ the Quad but do not even know why you might have violated certain rules or otherwise can't see clear on where you failed yourself one next step that can be done is creating a anticipatory system versus a reactionary one

One such system is zooming out on a set schedule meaning weekly and monthly calls on each Sunday and the 1st of the month and adhering to their out come

in our case the weekly call that was finished by the 19th of march allowed for a clear warning signal that prices were overextended at a distribution zone and the resulting weekly doji did give a clear target signal for a Quad exit portion of the trade

but any form of a system that you bring anticipatory towards the market where you are not the interpreter on a discretionary basis but follow a regiment that you overlay to the market can bring principle based insights over a distorted picture that more often is emotional in nature

One such methodology is rule based index cards

These are small enough to diminish overwhelm and require you to a summation of the top down most important rule summaries that can be quickly applied to the market

since visual representation equals psychology i recommend mind map representations on these index cards to further structure the mind ad the rules implementation on the markets view(charts)

An easy to access index card system supports any and all scenarios where the human mind might get under stress and our reasoning ability gets diminished or worse the mind tries to find solutions in the subconscious mind(=intuition)

for example six sigma events

another environment where one easily can deviate is lower time frames(scalping):

confusion on open orders(once money is exposed emotions come more strongly into play):

complexity:

The crypto space is a very emotional market due to the underlying ideology and the typical market participants mental make up

these emotions become a part to every market participant trading these trading vehicles and as such i recommend even very basic analysis scan blocks and execution procedures to be visually reduced to a index card system to try out if this approach might be massively reducing analysis and execution errors