The Wrath of Con
Oct 05, 2020
I hate it when people ask me for price predictions; I mean, you're literally asking me to lie. How the fuck am I supposed to know what happens next? If I knew that, I'd have turned $10 into a billion in no time, and I certainly wouldn't be blogging about it to you twats, I'd be neck deep in some serious tang and you'd hear my laughing from miles away. I don't have a billion dollars, not even roughly, so what value could my random guess for a price be worth anyways? Why would you ask any non-billionaire anything trading related? Shouldn't that be a prerequisite that someone made insane money from their advice??
Still, the shameless hopium addicts pound me every day with, Hey galgitron, not asking for a price prediction, but tap one foot and pick your nose if you think it's going up, I'll wait 10 mins for a reply and if you don't, I'll take that as a no. (10 mins later)..You didn't reply, that's negative, so price must be going down, which means I'll short it, make lots of money, here it comes.. going to bust..my..nut..all..over.. your..sailboat..face.. mudda..fucka.. ahhhhhhhhhhhh...don't open your eyes yet..whew!!! Thanks galgitron!
But it does show one thing, that people are desperate for some way to predict the future, and that sets the stage for..
There are many levels of con-artist. At the most basic level (level 1) we are all con-artists to a small degree, in that we project a persona that is always at least somewhat an exaggeration of what's inside. For example, I try to pretend I'm the smartest person in the world, but the reality is I'm only the second smartest, and I silently struggle with that shortcoming every day of my life.
While virtually all of us are guilty of the ubiquitous 'projection' con, the majority of us know when we're being overtly dishonest, and have something called a 'conscience' that prevents us from outright exploiting misinformation for our benefit. You could argue that most people tend to exercise supposedly harmless 'little white lies' (is that racist?)(get a life), and that could probably represent level 2 con-artistry; a little less easy to forgive, but not quite forgivable either.
Level 3 is where we start distinguishing people as liars versus honest. This level of deception has clear motives: to steal; whether it be money, someone's girlfriend, shoplifting, attention, etc. People that engage others with level 3 deception are despicable people, and don't have much of a conscience.
Then there's Level 4. Gee..zuz. Straight out sociopath, manipulative, inordinately complex scheming, and reduces other human beings to mere marks from which to extract their assets. These are the kinds of clowns that create "how to become a millionaire overnight" tubes, or "how to pick up hot women" 10-step courses. They usually start early in life, imagining things like, "how do I get $1 from every person in the country?", rather than, "How do I make something worth $1 to every person in the country?"
On the other side of the con are the hapless victims. Every single one of us has fell for many many cons throughout our lives, some cons being obvious in hindsight, and some being perpetual cons that we never emerge from (religion?). It really sucks being a sucker, and sometimes our cognitive dissonance won't allow us to acknowledge we're being conned, and so we end up doing the con man's work for them by actually 'promoting' their con despite that we subconsciously know it's a con. As this poll exposes, there are a LOT of VERY mathematically-incompetent, emotionally-based 'investors' out there, not understanding how things work and incapable of making sound decisions, very susceptible to following the wrong advice because of a compelling sales pitch by a megalomaniac promising interstellar gains if following their methods.
Cons are an interesting study in psychology. At some level, a con appeals to the dumb-as-shit lizard brain in our heads, and anyone that knows how the brain works, understands that the lizard brain is the boss, and any attempt to fight the boss with logic brings significant mental anguish. Take for example, sugar. It's pure poison, zero health benefits, addictive as hell, and will slowly kill you, and yet because the lizard brain likes the sweet nectar rolling over your tongue, that simple experience is enough to overrule mountains of logical scientific knowledge telling you that you're poisoning yourself; you just don't care; give me sugar.
Most people upon reading the science would initially be upset because they want to eat the sugar, but at the same time they don't want to poison themselves, and this introduces the brain's incredible ability for..
What a gift denial is; a true addict's go-to tactic of choice when internal conflict arises. Far be it to consider opposing the idiot lizard brain's self-destructive demands, no, let's use all that higher order thinking to instead, DISCREDIT THE SCIENCE! That's right, find every counter-study out there (no matter how questionable in origin or motivation) that refutes the sugar-is-bad science, and glob onto that like a life preserver in an ocean of guilt-laden gluttony.
In order to reinforce the standoff to logic, often victims will clamor to find like-minded supporters, and they're not hard to find. Lots and lots of people love sugar and are more than willing to promulgate the pseudoscience that refutes the sugar-is-bad actual science. This creates the impenetrable, insufferable, self-reinforcing..
ECHO CHAMBER (echo chamber..echo chamber..)
A con-artist's wet dream; having a horde of fervent denialists not only blindly reinforcing the con, but proselytizing more members into the echo chamber.
Now it must be said that not all con artists are mindful of their con, some of them are actually victims themselves to their own beliefs, but whether they believe the con or are acutely aware they are conning, they all knowingly step WAY over the line of presenting fiction as fact, or at best carefully sculpting what facts are presented instead of the whole picture. And that brings us to..
T.A. - Technical Analysis
I really hate this topic. Everybody and their cousin believes there's some magic in those charts, and I just know I'm going to get bikeshedded to fucking death by every self-proclaimed psychic genius, but I had to put something out so hopefully enough people will keep things in perspective and not get railroaded into bad trading moves by these fucking bastard TA sociopaths.
TA is NOT to be confused for "Trading Strategies" (such as shorting, leverage, hedging, etc.), I repeat, NOT TRADING STRATEGIES, no, TA is strictly the STUDY OF MARKET DATA for a specific purpose, which may or may not LEAD to trading strategies. Let's really break this down because so many people just fumble all over this topic, talking out their asses.
There's a few purposes to TA, and they are NOT REMOTELY related in character or motivation. The most common are:
Historical Analysis- This is the attempt to glean insight from what has already happened and why, such that it may possibly set the stage for getting in front of an opportunity. E.g., the Swell conference produced a similar bump in volume/price as it has for the past few swell events. By studying historical data, this consistency can be identified and preempted for the next time it's expected. The best time to exploit this pattern would be before there's even a hint of it happening in the markets, so there's nothing that would show up in a real-time chart to help with this. If you wait for the charts to show a surge, you've already missed the opportunity; hence the concept of 'getting in front'. I repeat, this type of charting isn't done in real time and has no predictive indicators. I see this type of TA to be quite valuable in searching for fundamentals awareness and opportunity highlighting, but mostly useless for short-term reactive trading, more for macro trends and events that highlight winning coins versus losing coins (not winning trades versus losing trades).
Stochastic Monte Carlo simulations - Very advanced and modern way to approach trading. Far beyond the resources of most traders and often remains the privilege of large hedge funds with deep pockets. What this tool does essentially is run hundreds of thousands of experimental strategies against historical data, trying to randomly land on a set of strategies that show meaningful profitability, for inevitable dissemination to armies of trading bots. This approach fundamentally exposes profit-opportunity data 'PROMINENCES' larger than statistical noise, that would be impossible for a human to discover. This is the animal we are dealing with now, we are trading against the Terminator, and he's had 18 lasers and 5 turrets pointed at your face before you even knew he was there. He'd have your balls blown off, left eye popped, both thumbs up your ass, and finished his ice cream you paid for before you even get your first converging triangle drawn. The Monte Carlo type of TA is what 'works'; it really does, and there's hundreds of billion-dollar hedge funds that profit grotesquely based upon the Terminator technology.
Predictive charting - Anything that makes predictions (even if just probabilities) based upon INDICATORS like Barts, head-and-shoulders, Elliot waves, Fibonaccis, EMAs, cup-and-handles, flags, converging triangles, chicken bones, hemorrhoid prints... all junk; absolute junk. Literally the kindergarten show-and-tell version of trying to understand market conditions. DO NOT make the mistake of confusing 'predictive' charting with 'historical' charting; two utterly completely different disciplines, and it's only this 'predictive charting' that I'm attempting to expose as nothing more than snake oil. Only an idiot can't see through all this blithering nonsense. Yes, a long time ago I used to be one of those idiots. I tried for quite some time to make this pseudo-science witchcraft consistently betray the future, I was deeply in DENIAL about my success rate, wanted SO BADLY for there to be something to all this shit, relentlessly leveraging CONFIRMATION BIAS of my few big hits to justify the majority of mortal wounds I had suffered, telling naysayers what IDIOTS they were and that they just didn't understand TA... but the simple truth is, it doesn't work, no more than you can occasionally predict heads or tails, it's all random noise, and here's some background as to why:
TA Evolved to Predict Mass Psychology
In the olden days of stock trading, before the Terminator machines, there were just boiler rooms and paper trails that represented the stock market. Those that were the apex predators (large trading firms), figured out that mass human psychology is very predictable. They were able to loosely map these psychological models into the various aforementioned 'indicators' and profit greatly at the expense of the blindly-trading suckers, and that's how TA became such a popular tool, and at that time, it worked!
But here's the sinister thing about greed, it's unstoppable, and so the evolution of trading lead to computers that could trade at the speed of light on behalf of the traders, and moreover, more and more sophisticated home traders came into the picture using those same indicators, and eventually, all those psychological indicators didn't work any more, because not only did everyone already know about them, but everyone was trying to get their privileged share of the pie. So ask yourself this, if everyone's trying to get everyone else's money using the same indicators, wouldn't everyone just end up with what they started with? I mean, there's no advantage any more, right? The PROMINENCES of predictable human behavior have become DILUTED by the MASS ADOPTION of TRADING with the SAME PSYCHOLOGICAL INDICATORS...
In other words, there's not enough indicator-less suckers left to milk. Too many people are on the next level, using the same tools, and everyone moves in sync. More generally, and REALLY let this sink in:
PROMINENCES EVENTUALLY DECAY FROM EXPOSURE
Everything you know about trading has evolved away from macro psychological models, to essentially Brownian-motion in the markets, at least at a human level. This is why the markets are so goddamn unpredictable (even besides whale movements), the diversity and sophistication of everyone's trading strategies has turned the markets into a mud pie, and no human can see through it.
The Terminators however, can see through mud, and they effortlessly, tirelessly, relentlessly, pore through exabytes of historical data, searching for those human-imperceptible prominences, and milk them dry. You may find it interesting that any collection of people moving in tandem is a prominence they identify and milk, so the very idea that a bunch of people following the direction of a specific TA evangelist, creates a prominence that WILL BE DETECTED, TARGETED AND TERMINATED! By doing anything predictable, you are setting yourself up for termination! In other words, predictive TA works 'against' you, because YOU are now the predictable SUCKER, relative to Terminator. You can't hide from him, he'll always be back. (I know, super-groaner; get your own blog)
We are so so far behind the ability to predict short term movements, that it effectively renders any form of predictive charting null and void; meaning historically useful indicators no longer work, because they don't apply to the Terminators. That epoch of trading evolution is gone forever. It's the time of the machines now, and whoever can afford the best AI, wins.
Fundamentals investing is the only game left in town. Look at the team, look at the product, follow their progress to make sure everything is on track, HODL, and forget the charts. If you REALLY absolutely MUST actively trade then tell these TA fuckoffs to fuck off, get out of their echo chamber, and instead start learning about shorting, hedging, leverage, etc. There are trading tools and specifically "straddling strategies" (very important) that can allow you to better protect your assets, and to make profits from volatility. It's a lot of learning, and some of you won't be able to get there, but I promise you this, over time, there's nothing you're going to get from loudmouth tubers drawing lines on charts.
That brings us back to con artists. After what you just read, and hopefully understood, I hope it's clear that predictive charting produced by a human has no hope of consistent accuracy. Sure. sometimes they hit it big, but that's just pure blind luck that they sell to you as confirmation bias, or they're lying and are actually fundamentals investing but trying to spin it like they used a chart to discover the opportunity. Beware of these slippery shysters, and don't hit the subscribe button, because if they really knew what the fuck they were talking about and their predictions were even remotely reliable, they would already be very rich and wouldn't care about making $50 on YouTube, now would they?..
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