Market basics
Last updated
Last updated
The fundamental principle of market cycles as described by Richard Wyckoff is elegantly simple: everything that has been bought must be sold. No large market participant ("whale") enters a market for the technology or ideology; everyone is there to make money, which necessarily implies taking profit.
This profit-taking cycle creates predictable market phases that repeat across all timeframes and asset classes:
Accumulation: Smart money quietly builds positions
Mark-Up: Public participation and price appreciation
Distribution: Smart money transfers holdings to retail investors
Mark-Down: Price decline as demand exhausts
Understanding where we are in this cycle provides crucial context for trading decisions.
Technical analysis doesn't lie; it reveals what's actually happening in a market:
Shows whether an asset has genuine interest
Reveals when wealthy market participants want to drive prices higher
Fundamentals merely reinforce what technical analysis already shows
Fundamental narratives typically emerge after price movements to explain why something pumped
The "tokenomics" trend that emerged in 2022 during the bear market was largely an attempt to rationalize investments after the fact. In reality, tokenomics = marketing = largely meaningless.
For swing trading, weekly timeframes provide the clearest signals. Timeframes below daily are typically filled with noise and "manipulation".
These patterns represent psychological shifts in market sentiment and often precede significant price movements.
EMA 9/18 Crossover
Entry: Bullish crossover on weekly timeframe
Exit: Bearish crossover on 3-day timeframe
200-Day Moving Average
Entry: Price above the 200 MA
Exit: Price below the 200 MA
SuperTrend
Entry: Bullish signal on weekly timeframe
Exit: Bearish signal on 3-day timeframe
RSI (Relative Strength Index)
Entry: Trendline breakout on weekly RSI
Note: Don't simply trade overbought/oversold conditions
Hull Suite
Entry: Bullish crossover on weekly timeframe
Exit: Bearish crossover on 3-day timeframe
Ichimoku Cloud
Entry: Price above the cloud
Exit: Price below the cloud [Ichimoku Chart]
Quadruple Bottom Daily
These indicators and patterns aren't magical; they're simply reference points that allow us to execute a strategy consistently. One could theoretically base a trading system on lunar cycles, and if it provided a statistical edge, it could work!
A losing trade doesn't mean your strategy is flawed or that the market is "wrong." Trading is probabilistic; even the best systems produce losing trades. The market is never wrong; it only takes one participant to change the outcome of a trade.
Create a plan with clear entry, exit, and risk parameters
Develop or adopt a setup, then backtest and forward test with small positions
Maintain discipline in following your rules
Always prioritize capital preservation above all else
Remember: Losing everything means game over. The ability to continue trading tomorrow is your most valuable asset.
