Is it Time to Buy Steem Again?
Let's Have a Look at the 12-Hour Candlestick Chart of Steem/BTC on the Bittrex Crypto-Exchange, Shall We?
...And a Zoom in on that 12-Hour Chart...
From a Purely Technical (Analysis) Perspective...
We see price sitting at a conflence zone of support between:
1.) the Bullish Bat Harmonic Pattern (orange triangle patterns with sides X, A, B, C, and D - completed at D) - see more about the structure on this post
2.) AB = CD measured move (price leg AB, represented by the higher red line on the chart, is cloned and we project a price correction by pasting that line to the top of the minor correction, we call this projected move, the lower of the two red lines, CD)
3.) The horizontal support zone (third yellow box down from the top of the chart).
4.) (Nothing to do with confluence, but a bullish sign) Steem broke out of the down-trend price channel (down-sloping parallel black lines that contain the AB = BC measured move)
Take these four things together and we have built a strong bullish (counter-trend) case on the current Steem/BTC market. It's not often that we'll see this many counter-trend (possible point of trend reversal) patterns/ support zones come together at the same time, meaning it's an area that makes sense to make a trade, so long as our reward to risk profile on the trade is palatable (ie we can afford to risk what we'll lose if our stop-loss on the trade is hit).
How I Trade it:
If you look at the first chart (highest up on this post) you'll find two rectangle boxes towards the right edge, each with a green section on the top and a red on the bottom - those represent long positions (buys), wherein the red portion represents the risk of the trade and the green the reward. So, as you can see, there are two suggested trades. Both the targets and stop-losses of these trades are based on the Bullish Bat Pattern (BBP) trading system (targets at 38.2% and 61.8% retracement of AD of the pattern and stop below X).
In this case, point X of BBP is the lowest price that Steem has reached on the Bittrex exchange (shown on the chart by the red horizontal dotted line), so price would have to make a new all-time low on the exchange in order to trigger the stop-losses.
I give a rough estimate on the chart of what to expect on the reward potential, compared to risk (RR).
The more conservative trade (trade #1) has a RR of about 3.4, the more aggressive (trade #2) is around 5.4. So placing a risk of $100 on each trade ($200 total risk on the two trades together), would translate into about $340 + $540, or $880 of potential profit (assuming both targets are hit). $200 risk to $880 reward ain't bad, especially when considering that harmonic patterns like the BBP are, in my experience, all better than 33% "winners" (first targets hit before stop-loss hit) and the strong confluence of the other support types, in this case, makes for even a higher probability of getting a winner (I'm thinking better than 40%, at the very least, but probably closer to 50%, or better).
Setting Up the Desired Dollar-Risk Amount on the Trade:
If you're interested in a (free to download and use) excel file that makes it fast and simple to accurately calculate how much capital has to be put up for leveraged and un-leveraged trade positions, based only on the planned entry price, stop-loss price, and desired dollar-risk amount - shared from the Microsoft Cloud storage service - check out THIS HERE LINK.
Just to Be Clear:
This is a trade that I'm actually taking. This is in no way a suggestion that you should make this trade. I post this only for educational purposes.
Follow My Trades:
See all the trades that I post here on Steemit by searching #mytrades
Below are links to my previous trades:
My Trades #1: Short S&P 500 CFCD (FXCM)
My Trades #2: Long Bitcoin/ USD (Coinbase)
Observe How My Trades Pan Out:
See the foll-ups (results) to my trades @ #mytradefollowups
Below are links to up-to-date trade follow-ups:
Follow-Up to Trade #1 - S&P 500 Short (Target Hit!)
I think that steem will go down to a few cents - then maybe it's time to buy.
Supply me with your bitcoin public address and I'll send you some bitcoin :)
I don't know if that was directed at me or not?
...but
1JqzhFZzjCpheYs5acvtA2U8eTbxxqLLSx
...here you go, just in case :)
Hello there, @jamesbrown. I really like your analysis, here. I think you have a lot of talent that's going a bit unnoticed around here.
How would you like to change that, hmm?
What would you say to a little contract between you and I, which promises to reward you more than any Steemit whale can reward you if you fulfill it? Does that sound attractive?
Of course it does. Alright, here's the game: I'm rich and I like...no, love to reward people whom can prove their worth as humans. I'm giving you a chance to prove your faith in the goodness of man, and if you pass this test, then you'll be more than handsomely rewarded.
I'm giving you a chance to enter a contract with me. This contract asks very little from you, yet offers tremendous rewards.
You become my follower here on Steemit, up-voting all of my future content, whether that be my comments to other people's posts or blog-posts that I upload to Steemit, and you must ASK NO QUESTIONS ABOUT IT (this is integral to passing the test) - do all this and I promise to repay you in thousands upon thousands of dollars in the not-so-distant future, even hundreds of thousands of dollars...hell, why not? even millions...I'm feeling a bit frisky, after all :)
I can pay you in future Steam-Power, should I decide to load up my account with SP in the future, or I can do this through sending bitcoin or, preferably, monero to your public address, any of these options work for me.
This is about proving your patience and demonstrating your trust that I will hold true to my promise to reward your loyalty to our contract. That's the test; that's my game. You have the choice whether to play it or pass on it. Choose wisely :)
Hmm. Sounds tempting...but I'll pass, lol.
This is a great article. Thanks for sharing. Happy to upvote and share this on Twitter✔ for my followers to read. Now following and looking forward to reading more of your posts. Cheers. Stephen
Awesome, thanks man.
The short answer is no (IMHO).
Do you mind elaborating what you mean by that? No, to what?
No to "Is it time to but steem again?". After the surge, I think it'll make a long rounding bottom, should go down another 50% from here (IMHO).
Gotcha. There's a definite possibility that what you say is going to happen.
Is it the "most likely possibility"? I don't even know how one would approach answering that, especially with such limited trading history on Steem.
As I alluded to in my post, even at 33% chance of turning at the current price range, I like my trade.
There cranking out too many Steem for the market to absorb. The are thousands of posts a day, but only a few make any money. This is discouraging the minnows, steem needs to distribute better the power if it wants to increase it's base.
Hey @jamesbrown,
Thanks for your thoughts.
Interesting times, and an interesting situation.
There seems to be some disillusionment with Steemit which is bound to affect the price.
We're only in beta and all is young and anything could happen ... but I do think that Dan and Ned and any other devs and policy drivers need to work hard at this point to address some of the flaws in the way things work.
Personally, I think we need to look at the rich/poor divide, and at the way posts are valued as high and low particularly.
You addressed this well and made some good suggestions in an earlier post.
:)
Love Peace Freedom
Thanks @richhorn.
Yes, this Steemit experiment is very unique and, at the same time, fairly complex, considering all the algorithms that go into deciding the payment distribution. It seems to me that the system is too easy to "game" for the whales, especially when considering that they (the whales) are very likely, IMO, to have two or more accounts with high Steem Power.
One solution to the unbalanced up-voting system that I've just recently pondered, but which might be too drastic of a tweak for the majority of the Steemit community to accept, is making the "accumulated time spent on a post" the weighing factor of how much Steem gets distributed to any one post, getting rid of the up-vote altogether (curation rewards being weighted to go mostly to the early readers of any post that accumulates a lot of combined reading time). It's just too easy with Steemit's current system to up-vote an article that we think will get a lot of up-votes, without really liking the content AND, most importantly, without PENALTY for up-voting something that we really don't value. With this system of voting by time spent on the post, at least we now have to put some effort/ energy into sending the message that we like it, as opposed to only having to take the second required to click on an up-button. I think people would become more inclined to start focusing more on the content that they really like and, in the process, distributing Steem according to actual value, instead of perceived popularity (due mostly to gaming the current system, IMO).
One problem I see with this is that very long posts may receive higher payouts, regardless of content quality, due to the reader having to spend more time to finish "consuming" the content. Furthermore, high quality content can be relatively small in terms of word count, so the time spent on a good post can be short. However, I don't think this would be too much of an issue in the long-run since people are far less likely to read all the way through poor quality content and they will, of course, be less likely to read future content from authors with sub-par posts; hence, the majority of accumulated time spent will be on the higher quality content - where it belongs.
On the flip side, it might encourage posters to cover their topics more thoroughly, which should lead to higher quality content, one would think.
Added after an edit
As far as Steem Power (SP) goes: every X SP can be an additional 1 second added to read time for every Y time that goes by while still on a post (call this product the "reading points") - with some capped time limit on any one post. There, IMO, should be a capped limit on how many reading points any one account can vote towards a post and a severe drop off on curation payout beyond a set "accumulated reading points" on a post.
As an example:
We may decide to go with an additional 1 second worth of "reading points" per 10 seconds spent on a post (call it "amplifying period"), per 1,000 SP (1/1,000th of a second per 10 seconds spent on a post, at 1 SP) - capping the total reading points at 12 hours worth of seconds (43,200 reading points) to any one account.
So, if an account worth 30,000 SP were to spend 15 minutes on a post, it would have benefited that post:
[(15 minutes * {60 seconds per minute/ 10 second per "amplifying period"}) * {(1/1,000th of a second per 1 SP) * (30,000 SP)}] = 90 * 30 = 2,700 reading points.
Now, what all these values should be, from the "amplifying period" to the increase in voting time per SP to the capped limits, would likely require some experimentation and tweaking, but I'm convinced that this system would be much fairer to the minnows and still fair to the whales, since higher SP still has its obvious benefits, albeit perhaps not as attractive as with the current payout system.
Yes, I agree with what you said :)
I'm not sure about the precise details (I dont concur or not, I'm just not sure) but the general thrust is sound imo.
Gaming the system for small-self-interest is a prob as it completely distorts supposed value, in the very same way that any ego-based action distorts outcomes in life in general.
How can we apply the laws of karma more closely to steemit ... hmmm ... ? :D
I guess karma will do that for us but it would certainly be important for steemit to genuinely reflect the value of posts and that is not happening at the moment in a meaningful way.
One thing I really dislike is how the tags work based on perceived value ... eg if I go to 'Yoga' there are only a few posts there at best .. sometimes none at all ... that does not help people find content they might be interested in.
If I search in 'tags and topics' field 'Yoga' does not even come up!
This is daft.
Anyway, lets hope the policy-makers are working on this.
I do get the feeling that they are interested and committed to making the platform work for everyone.
Lets hope they can pull it off.
Love Peace Freedom