Home Community Trade Signal Discussion trade signals for btc, ltc are high Reply To: trade signals for btc, ltc are high

#4426
Justin
Justin
Moderator

This is a great question I was planning on addressing…so glad you brought it up.

I think this is the first time this scenario has shown itself since the Trade Meter has been live.

There is a nuance in the math (the models) with the goal of buying dips as opposed to coming in late on a run. In fact, this was one of the key features of the “2.0 models.”

Specifically, we sometimes see a 10% hop in price in a very short time…like in less than an hour. If the model didn’t get in before that happened, we want to avoid rushing in after the fact.

How this works is the Trade Meter must drop below zero before a buy signal can be generated. But a sell can be generated before the Trade Meter hits zero.

In the case of BTC and LTC, sells were generated before the Trade Meter hit zero. But then, the market moved up quickly before the Trade Meter had a chance to drop below zero. This is what prevented the BUY signal from generating.

There are pros and cons to this approach. The major con is a big run could potentially be missed. BUT…this doesn’t seem to happen historically. There is usually a contraction that allows the signals to hop back in at a less dangerous point (buying a “dip”). The pro is this seems to lock in profit better and pick better entry points.

Suffice to say, we are monitoring this scenario very closely on the backend. 🙂

Also of note, the sensitivity of this whole construct varies by crypto. That’s why you saw BCH and ETH jump in, but BTC and LTC did not.