EC Crypto Chartbook: The Principle Of Impermanence

Based on the principle of impermanence it needs to be clear that no trading system is ever finished and permanent. No individual bet is a predictable one. As a trader, You need to constantly be on Your toes to revisit the principle alignment on which You built Your stacked edges to ensure consistent profits. As humans, we also aren’t permanent but are constantly evolving and changing. No physical cell in our body stays the same for a very long time. That is to say, we are in a consistent flux of regeneration and rebuild. Scheduled maintenance based on a detailed business plan is a core foundation to not run into larger troubles.

Many find themselves resting after years of system development, money management establishment, and psychological reconditioning to be fit for execution in a mindset of pure execution. It is essential to not slack on maintenance work. Constantly monitor various elements of your complex trading machine.

Inter market relationship changes for example are often the early alarm bells for systems to underperform or break. We often thrive for a status quo as humans and are reluctant and even overwhelmed by change. The markets require the attention and willingness to change! You either have an anticipatory system in place for monitoring system performance or are reactionary forced to change after losses have outweighed your avoidance to change on the pain level.

BTC-USDT, Daily Chart, Comparing detailed market behavior:

BTC-USDT, daily chart as of September 14th, 2020

BTC-USDT, daily chart as of September 14th, 2020

One way to check if your system is in alignment with what the market is doing is scrutinizing details. In our recent chartbook, we anticipated the 10k zone of Bitcoin to hold and prices from there to advance higher. We were right on the money with this call! Let us have a closer look at what has happened. The daily chart above shows that the two main attacks of the bears trying to push prices lower failed (yellow arrows) and built a double bottom. Once established, the first leg up evolved. Consequently, it retraced, and the start of a second leg up pushed prices higher (white arrows).

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