 Are you puzzled by the latest Bitcoin price movements? One of the biggest questions I always get from traders is, Charlie, why did the S&P do this or why did Bitcoin do that? I usually just say to them, yeah, there was more buyers than sellers, you know. This technical analysis, the only tool to assess the market with. If technical analysis is so great, how come people aren't rich and super rich and everyone is so successful? And what are the risks involved in crypto trading? Leverage. Leverage kills. It just does. Learn the basics of crypto trading and technical analysis with John Bollinger, Charlie Burton, Tom Vase and Big Chunks. These are the highlights of Cointelegraph Crypto Traders Live. I always prefer TA on the most liquid market and while I really like doing TA on the Bitcoin market, I hate looking at TA and anything other than Bitcoin because it's just too liquid and it feels like penny stock trading, which I hated doing TA on as well. Oh yeah, I agree that TA for me works definitely best just using Bitcoin kind of as my standard there. I agree that a lot of the altcoins, especially the ones that have a lot of low liquidity, do trade and do look a lot like the penny stocks, which you really can't get the best TA on because you get wicks and crazy directions and you don't have really the volume that shows you the true price discovery you're looking for. But in terms of Bitcoin, when we just start with basic TA moving averages, exponential moving averages, all the oscillators we use, they're very clear, I feel, in terms of what they're showing in terms of patterns. Most recently here, when we just had this breakout, everything was kind of lining up that we were kind of have a very volatile move. The Bollinger Bands, of course, on the daily chart were extremely tight pinching and showing that we were about to get something. And then when you see where we are in terms of where we are in terms of the moving averages, how the price action has been above the meaningful ones, 50 day 100 and 200, it seemed like the bulls had the upper hand on this. And that's what we saw in the price action. Charlie, do you have anything to add on this? As far as I'm concerned, I'm a technical analysis trader myself. But really, the one thing that I find out there doesn't matter what market and what type of trader you're talking to, they all want to be right as much as possible. But I don't care about being right as much as possible. And we all know that you don't have to be right that frequently. And I think that's the main thing for me with technical analysis. It's not necessarily about trying to be right 80% of the time. In your analysis, I'm quite prepared to be wrong as long as my risk reward is there for me. So if I can get a half decent risk reward on some of these moves that are there, then does it matter if I'm wrong 50% of the time or even 60% of the time? It doesn't. One of my most one of my best technical analysis strategies I have is actually about 40%, 40, 45% success rate. And yet it's the most profitable one that I have. So if you think about it, there are two major avenues to profitability and technical trading, in all trading, for that matter. One is your frequency. What percentage of wins do you have? Can be 40%, can be 60%, it's just a number. And the other is the size of your winners versus the size of your losers. So I'm guessing that Charlie has a system. If it's only 40% effective, but yet it's making money, so probably has a win-loss ratio of two or three to one in terms of the size of the winners versus the size of the losers. And if starting traders would think about the relationship between those two sets of numbers and would really look at them in their own trading process, they would improve very quickly, I think. Risk management was just mentioned earlier because technical analysis may not be the most important thing in a trader's arsenal. So before we get on to the actual technical analysis tools, I decided to really quickly grab a slide from a recent risk management workshop that I did. And in this slide, I'm literally, I grabbed a page from Wells Wilder Jr.'s book from 1978, New Concepts and Technical Trading Systems, and it was like a 70-page basically manifest on technical analysis with one page being devoted to risk management. And here's what he writes. The message of this book is that there are three parts to a good technical trading plan. Using a good technical system, using the system on the right markets at the right time, and using a good money management technique. Of the three, the third is the most important being money management, the easiest to learn, and the hardest to do. And then, and what I did with the slide, I basically said, hey, there are infinite amount of places where you can learn technical analysis. I teach technical analysis, and I do my best to teach you proper risk management and how not to lose your entire account on one bad trade, but it's going to be the hardest thing for you to do. But number two, I can't teach you using the right technical system on the right asset, on the right timeframe. And I think that is also a challenge that a lot of traders need to solve, and those that can't solve it end up being followers of other traders. So what do you guys think about this dynamic of learning technical analysis, knowing how to apply technical analysis, and making sure that you have good money management and risk management? So let's head over to Charlie, and we'll start with you, because you do have groups and newsletters. And what do you think about this dynamic, and how should a new trader manage this dynamic? Well, yeah, I mean, I don't have newsletters anymore. That was years ago, but I do have groups. Yeah, I think there's a couple of things here. We've talked about groups and followers and stuff, and we all have them. Is that a lot of people are looking for help, and they're looking for people who have got experience in the markets for help. And so I'm quite happy to provide my experience in that regard. Wherever I can help people, then that's a good thing. But as always, it is the most important thing, as what we emphasize is good risk management. The problem that a lot of people have is they'll look at a chart if they're a technician, or maybe if it's the fundamentals that are going on. And if they really believe that everything's lined up, and as you guys know, sometimes you can look at a chart, and you can think, wow, that has got everything lined up. And what happens to those average traders? They bet the farm on it, because they think, well, all of my indicators are aligned. The heavens have aligned for me. And that's the natural tendency for most traders is to then think, right, I'm going to bet the farm on that. But so often, the ones that we think are all lined up are the ones that actually fail, and the ones that we actually in our gut feel most uncomfortable about are the ones that actually work. So, yeah, coming back to your first point about risk management, I mean, we just say to our traders, risk up to 1% per trade. And if you stay below 1% for every trade, then you're pretty much going to keep yourself safe. You can sustain a drawdown when drawdowns come along, but you can still make some decent gains and have some good results with that type of risk per trade. You can build your trades and build into them and all of that sort of stuff, but if you start out at a maximum of up to 1% risk per trade, then I think that's always a good advice. There are two aspects to this risk management piece. Number one, Charlie touched a little bit on it. I have to disagree with him a little bit. It's the amount committed to each trade, and there are very good formulas for determining how much you should commit to a given trade. I really commend everybody the work of Ralph Vince. He's done more on position sizing than I think anybody else. It's very mathematical, and if that's a little bit too mathematical for you, perhaps another practitioner, Van Tharp, who has written extensively on position sizing, might contribute to that. The second portion of money management for me, other than position sizing, is some sort of risk control. I personally like trailing stops. I've written a couple of my own trailing stops, but Wells-Weiler suggested one. It's called parabolic. It's sort of a relentless approach to a trading stop in that it increments each and every period no matter what. I prefer the work of Chuck LeBeau. These are called chandelier stops, and they progress as the trade progresses. So if the trade stalls, the stop will stall. That's the big difference between those two approaches. But they're both progressive levels. That will keep you out of trouble. So position sizing is absolutely key. I think you should try to determine what it is in a formulaic manner. But a fixed number can work as well. And then the second piece is some sort of risk control. And for that, trailing stops for me. All right. And Vic Jonas, tell us about your any lessons that you said you've been trading for about seven years. Any horrifying experience of not following good risk management rules you want to share? Sure. All the time, actually. Being able to control FOMO in this market is incredibly important. Bitcoin, for the most part, tends to range. And then every once in a while, like we've seen the past week or so, has a big move. So it's great that you're able to capitalize on those big moves. But during the times of consolidation and ranging, the wicks we see because of the leverage market that Bitcoin is in in both directions can wreck an account, especially an account you use on leverage trading. So in terms of me and how I approach risk management, A, obviously, never want to put all your eggs in one basket or one tray. There's always another trade. If you have a chart that you're watching and you miss your ideal entry or it does something and you just aren't there to make the trade, preventing yourself from chasing into the trade after you've missed your ideal entry is so important. As and the more I trade, the more I become more conservative, I've found in my trading. I when you're new to trading the temptation to up your leverage and to turn a thousand, make a thousand look like 50,000 with like a 10x move or a 50x trade and thinking about, oh my God, I could make a ton of money if Bitcoin has a huge pop there. But what the crypto markets tend to do is to kind of screw people on both ends of the trade. You'll get your Darth Maulwick that's that liquidates your longs, liquidates your shorts. And in the end, the closing body kind of stays more or less where it was. And that's what we continue to see in this Bitcoin market. So preserving capital risk management is the most important thing, because I think the term wrecked is thrown around a lot these days, because people get wrecked very easily. And the volatility in these markets, especially in all coins, can come so quick. And if you don't have a stop loss in, if you're not protecting your capital and if you're not protecting your winners, it's okay to take a win. I think people when they're up in a trade and they're not used to being up in a trade, don't know what to do. They're thinking they hit the generational entry, if you will. And they're kind of just let it ride. And those are never, they just never work out that way. You know, that's why I look at trading in terms of scalping and swing trading and each trade individually. I'll take a lot of trades and try and make a few bucks on each trade. We're going to kick this one off with Mr. Bollinger. And I'm going to get very specific. We're going to get right to the meat. What are your favorite technical analysis tools? But I'm going to remove the obvious stuff. So no candlestick patterns, no chart patterns, like triangles or cups and handles, no moving averages. So we're talking straight up TA tools. Name three, one of them can be an overlay like Bollinger bands or Ishimoku clouds or parabolic stars, something overlays on the price. And two of them, oscillators. Your MACD, your RSI, your ADX have at it. So what are your favorite TA tools that aren't obvious that everyone else uses? So this is what we call a fat pitch. It's obvious. For me, it's Bollinger bands as the overlay. And then the two indicators that I would use as oscillators are percent B, which tells us where we are in relation to the Bollinger bands and bandwidth, which tells us how wide the Bollinger bands are. But having said that, especially in the crypto space, there are a ton of other TA tools that work really well. We talked here a bit about moving averages and such. They can provide some useful information. The classic oversold oscillators such as RSI and stochastics are quite useful. And I really like intermarket analysis in the crypto space. So I don't look at the tiny illiquid coins. I do watch an index of them, that shit-perp index. I find that pretty useful. But I look at the other major coins where there's a lot of activity, ether and litecoin, stuff like that. And I think that work goes back all the way to Bilohama writing Solongo. He called it his 3D method of trading. He's just look at related things and see if they're confirming your analysis. And I find that very, very useful in the crypto space. All right. Thank you, John. Charlie, let's go over to you. Okay. So very briefly, I do use moving averages. So I've quickly taken those off, as you said, they're not allowed. As you can see on the chart here, I've taken some moving averages off, but I use a MACD. I like using an NMA CD indicator for divergences. I find that works really well against support or resistance. So that's a favorite of mine. And just price action and trend lines and horizontal support and resistance. Literally just putting on those horizontal support and resistance. This is a chart of only enough euro-dollar. I know we're talking Bitcoin, but I've just bought this one up because I think this has been a beautiful pattern for such a long time. This building long-term trend line going all the way back to 2001. If I actually put this onto a maybe a quarterly chart, you'll be able to see it a little bit easier here. There we go. All the way back to 2000, this beautiful long-term trend line that we keep on coming back down and bouncing around. That's what we're bouncing off at the moment. Then we've got this declining trend line from the the highs of 2008-9. And so that's a, to me, is a beautiful chart there. And that's why I've been observing that. We've got a couple of horizontal areas of actually the first red line here. That first red line going back to 2015, that around 114 on euro-dollar has been kept on coming back up to test it. And I love it when price comes up to a resistance level or a support level and keeps on bouncing against it because at some point, it's probably going to break through under technical analysis rules. So basics really, price action, horizontal support and resistance, and trend lines, and a MACD. There you go. That's what I use. Jonas, what about you? What are your favorite technical analysis tools other than so one overlay and two oscillators? So I try and find what are the best RR setups for me, best risk reward. So I'm not kissing up here, but the Bollinger bands are a big part of my TA. I do like to use them. I have rules for how the price action responds on, let's say, the one-hour chart, the six-hour chart and the daily chart. I'm very curious in terms about the higher time frames as well. In terms of my oscillators, I really like to use the RSI and the stochastic RSI. I adjust my RSI and stokes settings slightly higher. The default for the RSI is 70-30. I go 80-20. And then the solve for the stochastic is 80-20. I go 90-10. And basically what that means for me is when the stochastic RSI, when both of our indicators are swimming above 90 or below 10, those are times when I'm saying, okay, is this an opportunity to long or to short? I do not long when the 15-minute RSI and stochastic RSI are above these lines. And I would consider a short or I consider a long and would never short if they're on the lower end of the oscillator spectrum. And that just gives me a sense of where we are on the overall wave pattern and where I can have my best chance to trade. When these oscillators are kind of in the middle, for me that's kind of no man's land and I don't see the clear signal to potentially take a trade. So I'm looking for extremes in those oscillators, mostly on lower time frames because I'm more of a scalper, and then try and take advantage of those. And those kind of offer me my best RR. I was just going to add actually I was just interested in the overbought stochastics RSI. I mean the one just interesting just because for me I'll look at a chart like that. If I put those types of indicators on, if I see them overbought we all know that markets can remain overbought for longer than you think. So is there another trigger that you'll use? Because sometimes you'll get your RSI or your stochastic or get up there and it will sort of just wiggle along the top as the market just trends. So do you use anything else to actually help you to decide that actually this is coming off and it's not actually just a strong trend? So these rules work best for me in a five and a 15 minute time frame. I absolutely agree with you especially in Bitcoin that on the higher time frames daily, weekly especially, you can have oscillators pegged way high. And that doesn't necessarily mean it's overbought therefore I must sell. We saw clearly with the weekly stochastic RSI that it was pegged at almost 100 for weeks basically during the big run of 2019 and a very frothy RSI as well. So you're absolutely right that a market can range and still rise while these oscillators are at their peaks. But that's why I only use these specifically for the very lower time frames because I'm not looking for a trend change. I'm looking for an opportunity of a scalp trade. Hey guys, let's move on to this dynamic between fundamental trading and technical analysis. So technical analysis is basically a new tool and the millennials and the new generation is falling more and more in love with it. But how much are the big institutional markets are taking TA seriously? And do you think that the amount of people that are investing in general is rising more towards the TA side because institutionals are still all about fundamental analysis. And what do you think that dynamic is? And do you think an at-home retail trader even has a chance to compete in the fundamental analysis game because I honestly don't think he does. But I'm curious about your thoughts. Yeah, the FA part of Bitcoin is really fascinating. There's so much more than TA that is available to analyze with Bitcoin, on-chain volume and other indicators, minor profitability, all these things that you don't necessarily see on your Bitcoin chart but can have a tremendous impact in the price action or determining what the future price action can be. I think a lot of altcoins tend to drive on news events, potential partnerships with bigger companies or something that tend to kind of move the price action sometimes more than the actual chart is suggesting. So FA does play a big role in this. And I think what I'm trying to do is enhance my FA side. I feel like I'm pretty strong on the TA side, but in terms of the FA side, when it comes to Bitcoin, there's a tremendous amount that you can study that can give you a lot more insight and data, I think, than the TA side can necessarily show you. And Charlie, what do you think about the fundamental analysis versus TA analysis? And what do you think about people tend to confuse news events that they hear with fundamental analysis? Because I always love to separate the two. Well, yeah, I think it comes down to innate human nature. We need to understand why something happened. And fundamental analysis sort of helps out that inner desire for people to be able to justify why something's happened. One of the biggest questions I always get from traders is, Charlie, why did the S&P do this? Or why did Bitcoin do that? And there has to be a reasoning and a sort of a fundamental reasoning as to why Bitcoin broke out last week or beginning of this week. And I usually just say to them, yeah, there was more buyers and sellers, but coming back to your point as well about fund managers and this snobbery sort of element to where we don't use technical analysis. And yet you look at some of the greatest traders of all time. And I always go back to the likes of Market Wizards. And you look at Paul Tudor Jones and Ed Secota and Richard Dennis. And some of these famous traders, they used a lot of technical analysis in their approach. So and I think for certainly for the average retail trader who is probably trading over a shorter time frame, then market sentiment is more important in the shorter term than fundamentals in my view. So and you can derive market sentiment from the charts a lot of the time and from obviously sentiment measures themselves. So I think for the big players, the big funds, then fundamentals are important because they're trying to understand those macro trends, which are important to the time horizon that they're looking at. But a trader who's looking to be in today and be out next week, I don't think it's as much personally, I don't think it's as important. There's the point to make in Charlie's idea there is that there are no people that do not use technical analysis. It doesn't exist. There are no pure fundamentalists. They just simply don't exist. You show me a fundamentalist that has never looked at a chart and I will show you a pure fundamentalist. But they all look at charts, right? So it's really important point. They're all practicing rational analysis. They're all using technical analysis. They're just not admitting it. So here comes a tough one to put you guys on the spot. If technical analysis is so great, how come people aren't rich and super rich and everyone is so successful trading? And why is it difficult? I have my answer, but you guys are a panelist. Why is it so difficult to wrap your best technical analysis thinking into a script that automatically trades your market profitably, professionally? What is holding that up? So I guess, you know, let's start with showing us on this one. Yeah, it's understanding how to trade a specific time frame. You know, if you're using TA based on a one hour or a four hour, it feels like it's very important to have a sense of that particular trade. That's for me, would be more of a swing trade. I would expect to be in this trade for hours a day, maybe several days because I'm on that higher time frame. If I'm on a lower time frame of five or 15, I'm looking for a scalp trade. I don't expect to be in this trade more than 10 minutes to a half hour, probably max, or else I probably didn't have the best entry in it. It's a great question because we have these tools that are supposed to show us the way. Either here's a buy signal or a sell signal, but the markets don't necessarily then trend in one direction, like straight up or straight down. Along the way, you get your troughs, wicks, stopouts throughout it. Even though you can have the best TA and really trust your tools, then you have the forces of other traders, bought trading, the exchanges themselves, and it behooves the exchanges to get you out of your position. You're fighting against all these things uphill. I trust my TA, but you have to understand how to use it in the context of the time frame you're actually applying it to. Charlie, let's go over to you and we'll save John for last on this one. I'm going to pick up on the first element of your question, which is why the technical analyst is not rich or whatever it was you said something about the richest people. Some of them are, but there's this expectation that if I learn technical analysis, I will be a gazillionaire and there's reality somewhere in the middle between those two. Yeah. Well, certainly the average retail trader, the problem they have is they have a very short time horizon. They think that they can read a book and then become a gazillionaire and they forget about this whole thing called volume in the market. If I just carry on compounding at 10% a month and I've started off with my £10,000 or $10,000 account, then yeah, I'll be worth trillions in a few years' time. It doesn't quite work that way. The other thing with most technicians, as you said there, the good guys either just carry on just trading their own money or actually become money managers. The very wealthiest people, traders out there, are money managers. Just mention any name and John, I'm sure you've been a money manager and maybe you still are. Sorry. The wealthiest guys tend to manage other people's money because it's the easiest way to trade very large sums and to derive performance fees on the back of that. I would say that the reason for lack of success, whether it's huge success or just success period, there are two reasons. First of all, discipline, specifically a lack thereof and emotions which cause a lack of discipline. That's the big problem for traders. If you want to have one more piece in that puzzle, leverage kills. It just does every time. You look at every major financial problem the bottom line was leverage every single time. The overuse of leverage, allowing emotions to rule your process and lack of discipline, those are the reasons that people don't get wealthy or even rich or do well or lose all their money. I have a follow-up question to money management, but we have a good question from the audience that fits into exactly what we were talking about. Are bots better than humans at trading? Are emotional trades a good thing for market volatility? What are your thoughts on putting your ideas into a bot versus doing it yourself? Or does it depend on the person? Bots are fine. They work perfectly well as long as the market remains kind. When the market turns wicked, the bot dies. That's just it. If you're fast enough to turn it off and pick another approach or another bot, then you can be successful at that. Bots only are able to trade the markets that they're matched to and markets evolve and change all the time. There you go. How do bots affect technical analysis? Charlie, go ahead. Feel free to answer both questions. I've never been a fan of bots. You look at the institutions. They have very, very deep pockets for developing all sorts of elaborate, quantitative systems. Yet you get your average retail trader who wants to develop a bot and have it scalping all day long. The problem is with very short timeframes is that there's always going to end up being execution errors at some point even with a system. My view is that, yes, they are useful, but as a supporting tool to the trader. They can be a great support tool from a testing perspective and from an alert perspective. The trader still uses their skills to then take the signal and decide whether that signal is a good signal or not. Much like any discretionary trader, anyone here who we are all looking at the charts, I'm a top-down trader. I use the higher timeframes and go down to the smaller timeframes. You can make that decision based on your experience as a trader, but if you're just letting a robot just trade, it's not really going to be able to do all of that. As you've said, they can come and go very easily with the market environment when that changes, just like what we saw back in February, March of this year. I'm more pro-automated bots if they are trading off of higher timeframes than if they're getting caught up trying to scalp all day long, which I think are much more dangerous in my view. This is my last question to you guys. Let's kick it off with you, John. If you can go back in time and give a young you some advice about technical analysis, what would it be and at what point in your life? It would be to get much more serious about technical analysis much sooner and to pay a lot of attention to the classics. Those books that were written 50, 60, 80 years ago by the likes of Wycoff and Drew and Edward de McGee. That would be me. Charlie, how about you? To my young self, I would say focus. One thing that I did most traders do in the early years is I was a searcher, like so many people are. I went from system to system from indicator to indicator and never really got anywhere. The late Mark Douglas, I met him maybe 20 years ago and I remember him saying to me, if you locked yourself in a prison cell for six months and I just gave you a 10-period moving average, I bet you after six months, you'd be able to make money because that's all you had. The problem we all have nowadays is so much choice that we just jump around too much. If I could go back to my former self, then I'd say focus on a few things and get really good at those. Charlie, how about you? Knowing when to take a win has been one of my things I've been battling with as a trader for a while. When you're in a winning trade, protecting that is so important. I can't tell you how many times when as a young trader, I was in a winning trade that became a losing trade very quickly because I just didn't want to take the win. I wanted higher, I wanted more and in waiting and not selling, it just cost a lot of money. Real quick, scaling into trades. You never will hit the bottom or the top, but if you don't scale in, if you put all your eggs in one initial entry, you don't have the leeway to dollar cost into that trade more effectively. Nibble into a trade, nibble into a position and you'll have more options on how you can trade it. Once again, we had Big Jonas, Charlie Burton, and the one and only John Bollinger. Thank you so much guys for joining this Coin Telegraph trading experience. It's been awesome. Thank you guys. Thank you. Thank you.