How to Spot Fake Price Moves, Why Trading Crypto Is a Life Changing Experience, and More!

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Guys, I'm your host, Giovanni. Welcome everyone, to our Crypto Market show live. I'm your host, Cool Traders Jake, AKA koreanjutrading and Big Chat. How are you doing, guys?

What's up, Giovanni? How you doing?

Hey everybody. Thank you for having me. It's an honor.

Likewise. Likewise.

So before we start the discussion, I want to remind our audience about a new competition we are announcing. So you guys need to guess the bitcoin price in one week from now. So next Thursday at 2pm Eastern time, we're going to look at the bitcoin price and the one who got closer to the actual price is going to win 100 bucks worth of credit in our merch store. So what you need to do is just write in the comments below what you think the price will be in one week from now. And in the next Crypto Market live show, we're going to find out who's the winner. Also, guys, don't forget to like and subscribe to our channel. And also remember, this is an interactive show. So guys, you need to write your questions in the chat and our team is going to pick the most interesting ones and they're going to ask the questions to our guests. So let's get into it. Jake and Big Chads, I want to know first a bit of your background. So how did you guys get involved in crypto trading? First, you, Chetz.

Oh, thank you for asking. And once again, I really appreciate you having me here and it's a nice opportunity to talk to you as well, Jake.

Likewise.

More or less. Like I've said before, I've been trading for over 10 years, but I really cut my teeth in the penny stock market and I saw a lot of volatility there and I learned a lot about trading psychology and risk management and I built up an online following from that. I have a good buddy named Big chonas and in 2017 he showed me his iPhone and I saw Ethereum Litecoin. And I thought, why does he have precious metals on his phone? It was just this moment. It was a weird thing. What is this? Started posting litecoin charts. I started posting bitcoin charts and all of a sudden retweets likes. And I realized there's this thriving community and I went Full force into crypto. And right when that happened, I was diagnosed with cancer. So while I was going through cancer treatment, bitcoin was hitting 20k and then pulling back and then alt season. So it was kind of one in the same for me. It was kind of a journey that I've been on now for the last couple years. So that's how I got involved in crypto.

I also heard that you are about to publish, actually you just published a book about how you recovered from cancer.

Thank you. Yeah, I just published my book, My Battles with Cancer, A Candid Patient and Caregivers Memoir. It's available on Amazon cancer Kindle paperback format. For me, it was a way to get through my treatment. It was a way to write about it, to think about it. And I was kind of live blogged. I kind of live blogged my cancer journey. So the people on Twitter, my followers, were part of it. And you see them in the book, they respond to me. I gained strength from them in tough times. So it's really, for me in many ways, one in the same kind of the crypto and the cancer journey. I just published the book and thank you for allowing me to talk about it.

Of course. So now I want to hear about Jake's story. How did you get involved into crypto and into crypto trading?

By the way, Chad, congrats on your book, man. Great story. Inspirational. Me, my story is a bit different. I was in dental management, actually, and I was working for a dental corporation overseeing a larger territory. And that was kind of my thing. That's what I did for 15 years, actually. And I had another kid on the way, my second. And just I wasn't in love with the job. And something was telling me, you got to do something because you're going to end up doing this forever. And at the same time, I had just watched the Big Short, so I was kind of upset with the way the Fed prints money and how bankers get away with stuff. So I had this really kind of like, screw the system kind of sentiment in myself. So everything kind of came together. I was watching Instagram, some of my friends were posting coin market cap screenshots. And I saw these litecoin, ethereum ripple, all these things going up like, you know, 30% in a day. Like, what the hell is that? You know, I didn't even know what it was. I thought they were stocks or penny stocks. And I said, let me do some investigation, like a jerk. I didn't. Right. This was in about April of 2017. And then the vice President of my company. We were just having a candid conversation about investments and different things. He said, what do you know about bitcoin? And he didn't know too much, but he was assuming I do. And I said, you know, I don't know too much. And he was showing me Coinbase. And that night I went home, I started to do research. I stumbled upon Andreas videos and things of that nature and the rest is kind of history. It just completely took over my life and, and changed it in a great way. I mean, that night I bought some bitcoin or I signed up for Coinbase and bought it as soon as I was able to. And then I started to dabble in altcoins and before you know it, I'm making YouTube videos. So, you know, it happened super fast and glad to be here.

Cool. So it seems like that crypto trading played quite a big role in both of your stories.

Oh yeah, 100%. Within. Within three months from buying my first bitcoin, I was quitting my job. Pursue this as a full time basis because it was the only thing I wanted to do. And keep in mind, I have a baby on the way too. I'm like, how am I going to pay for this baby? I got to do something. And it just possessed me. I didn't want to do anything else but that and I fell in love with it.

I think it's interesting, I think a lot of people actually found an identity, have found a way of life through crypto and that just reinforces the idea that it is its own ecosystem, kind of operate 100%.

So speaking of identity, I guess I might as well talk about my name. Korean Jew trading. I had my own. I mean, I grew up in the 80s and 90s as a biracial kid in a predominantly white town. And you know, back then we had thick skin, but you know, people say it's bad now, but back then, you know, bullying was a thing. And I had to always kind of explain, people would be like, what are you? You know, are you Chinese? You Japanese? I'd say, well, I'm half Korean. And I go, what's the other half? Jewish. You know, like, I was almost. I would get anxiety when people would ask me about my ethnicity. It was something I was embarrassed of for a very long time. So fast forward to crypto. I'm no longer embarrassed, but I'm thinking of a name. What do I call myself in telegram? And as a kid I never had like a cool name on AOL or a cool PlayStation Network name like you know, I'm just going to be Korean, Jewish, and we'll see what people say. They might say, oh, he's a Korean, he's a Jew, he might know something and kind of ran with it. So that's my story about identity as far as what crypto has done for me.

All right, so let's get started talking about what is going on right now, actually, in the crypto markets. So I would like to know what are the key indicators, the key levels you're looking at, and also some perspectives on what we are going to likely see in the few days to come. Chad, you want to start with your perspective?

Sure. Should I just kind of talk about the price action a little bit and show the chart, or you want some broader thoughts here? What are you looking for?

Maybe let's get the zoom in and then maybe talking about the macro picture a bit later. Let's zoom in the charts. What is going on?

Do you want to see my screen or would you like me to just tell you some levels to talk?

Let's maybe as you want. If it's more comfortable for you to explain through your.

Let's just do that briefly and I'll just take a look here. I have up the weekly chart. We could talk about that later, but really, on the daily chart, I have just the candlesticks up. I have some moving averages and Bollinger bands. We had a recent break or perhaps a false move out of this triangle or wedge consolidation from candlestick terminal terminology. We had the dark cloud covered the following day. We had the price pull back to moving averages. The question I'm kind of watching right now is will we get rejected once again here and kind of come back and test this lower boundary line? This is an important boundary line because of the length of it, the number of touches you've had on it, multiple touches. So generally speaking, my view is this is a more important trend line than the upper trend line. So that. That's really what I'm watching is really this consolidation range and to see which way it breaks. And if it does break up, we're going to want to see more volume than we saw right here. And that's maybe just kind of a brief view on where I think we are right now.

Cool.

And how does it compare with Jake's perspective on the situation right now?

All right, so let me pull up the daily. Can you guys see that? Yep. Okay, so I am looking at this wave here as just kind of a range, you know, obviously 10, 5 due to the. October. October 2019 high as well as in February, that's a key level. A break above 10,500 would probably bring, you know, some, some, some very exciting price action and increased volatility as well. But one of the things that I as a trader do try to avoid is when you see these type of structures developing around key levels, this price action is basically meant to just chop everybody up. All the high leverage traders get wiped out and then ultimately you'll get a volume climax in either direction. That direction that this breaks out is usually not a fake out.

So.

Something that you can do is play a different asset if you're unsure of what to do in here. But when I, I've, I have been trading it, but I'm just playing it as a range. So like above 10k, the high nines, I start to trail my stops up. I don't want to get hit with something hard. And when it dipped, I bought both of them, both of these as well. As you know, yesterday I got so lucky, I got really lucky to catch what, what happened yesterday. But you know, I'm bullish down here and as long as you're managing risk, that's a good play in this type of scenario. So as far as what, what's going to happen now, we're coming up against a way higher term trend line that we broke through. It was a fake out above and quickly rejected. We're coming up against it now. So if we get through it again, I would, I would lean towards a bullish bias. But at the same time above 10K, you got to think about it. We're looking at 10, 5 as our resistance here. That's about 600, $700 away, something like that. It's only 6 or 7%. Right. There are other assets that are in trend that are very clear where you can get 10%, 20% stocks, altcoins, they're all doing well. I'm trying to avoid getting killed in this wave before it decides to make a decision. Play stuff that's a little bit more.

Clear to me is really other than just short moves, right Jake? Those, those, those little in channel trades, I think that's really nice analysis. I would only kind of just add from, from my, my perspective, you actually need more volume to make the breakout. Kind of based on classical charting. You can just have it, you can just drop off, you can have that, you can have that ascending peak where it just kind of drops off. You don't even need volume on it. So volume would be good for bulls. Bulls want volume. There's A lot to chop through. You definitely outline some key levels there.

100%. I mean a lot of people go into this and they'll long in an area in the middle like 95, 96.

Yeah.

And expect to hold that to 11K. But you know, if you want to do that you have to have proper risk management where you know you're not. If your stop is $50 away, you're not going to make it, you know, it's not happening.

Well, you make a great point. You're buying mid channel you really want to buy. Bottom of channel you want to buy. If you buy, if you try to short at the top of the channel, you can have a nice tight, tight stop loss. If you buy in the middle, you know, you gotta have conviction in the direction. You gotta kind of very actively manage that stop loss like you talked about.

It seems like, it seems more of like an impulsive decision when people enter.

Stations based on Twitter. Based on Twitter or their friend who texted them and said, you know, the.

Moon, that's when, when those people are starting to. And you'll see these drag out with these ranges. And what you got to realize is most people are entering in the same spot as you and that's not a good place to be in markets.

They're entering after a big green candle.

In the 15 minute chart coming for you, you know. Right, yeah, we're on the same page with this 100%. But ultimately when I'm looking at the price action, what I'm seeing with bitcoin, this is a nice uptrend. Every narrative that bitcoin was designed for is in play. When I got in in 2017 we had Venezuela was, was having all sorts of trouble and bitcoin really took off at the end of the year when Trump and Kim Jong Un were talking about nuclear war and a lot of the buyers were coming from Japan and Korea when this guy was shooting off rockets. So when the Greece collapsed, that was also a good time for bitcoin to go up. Bullish Bitcoin times So historically bitcoin has performed well in the face of a crisis.

Has it though? Has it though this year? Isn't that the question? Wasn't that lacking this year?

Right. Well this year this was a black swan event from a technical perspective. I was bearish just because we got rejected for a second time at 10 5. So that dumped out here and made and this started to bounce and make lower highs. I was already bearish, very bearish there. I happened to be keeping up very closely with what was happening in China with coronavirus, mainly because I was friends with Bitlory, who is on boots on the ground, right. And started to do some research. And one of the interesting things about coronavirus, the whole event was the cdc, the who, the government, all the people that are experts on this type of an event, missed it. Right. Who got it? People that specialize in risk management, people in markets. We saw this coming. And one of the ways that I was able to kind of identify that this was going to be a big deal was nobody in my real life was taking it seriously. And when you think about Zika virus, you know, H1M, all these things, Ebola, the things that we thought were going to be the end of the world, that never did anything. People freaked out. It was all over the news. But coronavirus kind of like laid low.

And do you think people had crisis fatigue, perhaps? And that's why they just. They're like.

It's like the boy who cried wolf. You know, it's like, you fooled me before, you're not going to get me this time. But when you look at what China. Get out of here. Come on.

Oh, Jake, by the way, do you want to switch back to your screen?

Yes, sure.

Because we are talking about macro things.

Yeah, absolutely.

Actually, I want to just halt you a little bit here because we're going to talk about these macro perspectives in a little bit.

Sorry about that. Actually going on and on and my cat jumped on me.

No problem.

Should be at the top, I think. Right at the top. Middle. Top, I think. Stop sharing. Red button.

Stop video.

No, stop sharing.

Oh, stop sharing. Sorry. Sorry about that, guys.

Cool. So actually, I want to talk a little bit more about what happened with this last rejection. So, earlier this week, John Bollinger, the inventor of the Bollinger bands indicator, said that the move towards 10,300 was a head fake, inviting traders to trade carefully or to go short. So you also identified it as a kind of fake move because it got rejected immediately after. But how do you usually identify a fake move like this? And you understand that this is not real. This is going to revert, Chad.

So, I mean, I don't know, basically the Bollinger bands, what they're designed to do is they're designed to show you a price movement outside of a standard deviation.

Right.

To show you an excess, an overextension of the bulls and overextension of the bears. And in this case, we had basically we had a higher that. That move. It penetrated upper Bollinger band. It closed above it and was actually a higher high on the candle close basis from that May 7 high. Yes, we did pull back the following day with a higher volume red candlestick, but we pulled back to moving average support. We're continually rising, challenging those highs. All that's doing is telling you that you're overbought in the short term. It doesn't negate the bullishness of the longer term. View even a larger view on the daily. Rather than looking at a 5 candlestick range, you can look at 50 or 100 in a daily view. So it's just showing you you're overextended when you hit that upper Bollinger. You're probably pulling back to the middle Bollinger. And I know we're going to talk about it later. That's critical for how you use Japanese candlesticks, how you understand the context of, of any particular signal that you're given. Right. So that's what I would say about that. I think he was showing that you have a short term overextension of the bulls. It doesn't mean you can't come back and hit that again. You can test it again. You keep testing it. The more you test it, the more likely you are to break it. The question is, do you have continually rising support? Is your demand level still there? If you have demand, none of that really matters. The rejection doesn't matter if you still have demand, because that demand says, we're going to try again.

Good, Jake. That, that is your also interpretation about what happened.

And well, I don't, I don't actually use Bollinger bands or too many indicators in general. I see the value in it, but it's just not my thing as far as that move. I trade price action structures as well as sentiment. Sentiment is very important to me, but it's not as blind. You don't blindly go on and say, hey, everybody's this, everybody's that, and I'm going to do the opposite. It's, it's a bit more nuanced than that. But one of the things that I noticed was when we were at about 10, 3, 10, 4, Arthur Hayes tweeted something to the effect of, you know, look at this. And something like that. He's somebody I have notifications on. I pay a lot of attention when Arthur decides to say anything. So at that point I tweeted out, everybody move your stops up. Be careful. As well as told my friends in my trading group, guys, be careful now. So that was the first sign. And in that wave, when, I mean, I don't have the chart, but there was weakness on the lower time frame. So being that it was up there, there was so much volume in there. If that wave were to break down, you were going to see a cascade of liquidations. It went further than I had anticipated, to be honest. But I did see John Bollinger's tweet. I'm not taking a shot at him or anything, but that tweet did come after the dump. So after the dump, now you're telling people this was a head fake and be bearish. That was at around 9,500. So the timing was kind of bad there. And you know, it's easy to say after the fact that that's a head fake. Yeah, of course we made a higher low, so the trend is still intact.

Let me kind of devil's advocate that because that's really kind of the case almost with anything like retake. Think about like a gap. You have a big gap, right? Is it a breakaway gap? We don't know. We won't know until weeks later if you know that it didn't revisit it or breakdown gap. And pretty much everything can only be classified kind of after the fact. A lot of these things are just a devil's advocate that, you know, it's.

True, it's true, it's true. But just I guess from a technical perspective, the level that it bounced off of and also we have disparity on the exchanges. So Bitmex, yes, I actually caught 8,000, 861 like crazy lucky, lucky because I could have got killed in that. But you know, knife catching could be so dangerous on these exchanges. However, the other exchanges went to about 91, I believe, or 92. So I'm looking at it this way. Bitmex has completely cleared out their longs. Like all the longs on Bitmex are dead. And the funding is also. Funding is something also that I pay attention to and just from. From like it, it hanging on and making fake outs below, you know, 94, 95 seemed like an area where it was good risk reward to be long. So, you know, it can, it can dump right out off this trend line if this fails. But you know, as long as you're managing your risk.

Yeah. If you're managing a trade that's moving quickly, even like a bear flag, if you buy the bottom of it, like you're, you know, a corrective move within a downtrend. Yeah, absolutely.

All right, guys, so we have some questions from the audience now because people want to know some tricks in technical analysis. So Igwe Nuancuo Akuma is asking, how many days moving average are you using in your trading activity? If Chad wants to answer first, sure.

I'll tell you what, why don't I just show you briefly. And that might be a little bit easier just to answer that, if I may. And what I have up here, I have my candle view without any oscillators. What I use primarily in a big uptrend is this green line. It's an 8 EMA. An EMA is an exponential moving average versus a simple moving average with an exponential moving average. The calculation adds more weight to what just happened one or two days ago versus that eighth day in an 8 EMA. So I use an 8 EMA as primary uptrend support. What I look for kind of want that once that breaks. And we see that actually worked really nicely here on bitcoin. Pull back to the 34 EMA happened here a couple times. So I'm keeping an eye on that. So those two moving averages, I'm glad you asked. I was looking at the weekly chart earlier and there was an analog in Bitcoin in 20, I think, 18 to the 2015 bottom. So back in 2015 when the price was around $270, we actually had the 834 EMA bull cross and that led to that 20k run. We had a similar thing happen back here In April of 2019 after an MA200 double test support test, 834 Bull Cross, I think that took us to what, like 14K within this move. So there's a pretty good move on that. Now, one thing you want to keep in mind, if you're ever going to use your moving average crosses, you want to keep in mind the proximity of the price to the moving average cross. So as the 834, it's pretty much crossing here. It's a good cross. It's a stronger signal because the price is there. But for example, this is a bad cross. This is a, this is a golden cross with the 50 cross in the 200. But if you look at the proximity to the price, a lot of the move has already been baked in. So they're just some kind of things you want to think about when you're using moving averages. Of course, we talked about the Bollinger bands. The brown line Here is the 20 period simple moving average. That is the, you know, the middle bb. And so that's a little bit of what I, how I use moving averages.

Cool.

And yeah, we had other guests Last time, and we were discussing the fact that moving average sometimes are lagging indicators. And if you're not able to play around with them, you might just end up on the wrong side of the market. But what do you think about it, Jake? Like, what's your way to trade?

I think Chad's. I mean, that was great. I learned something as well. That's something that he obviously uses way more than myself. I use two simple moving averages very similar to two of the ones that he had up. I'm not gonna say exactly what they are, but it's basically the same. And I use them as a guideline. We don't. We don't look at one thing and say, you know, because this says that we're gonna do this. But, you know, it's good to see, like a higher, like 200. I have a 200 on there, and then something close to his 50 is on there as well. And I just use it as kind of a guideline. You know, we look for crosses and things of that nature, but.

Okay, cool. Actually, we have another question, which I think they should ask right now because we are at the very start of the conversation. So they are one man army. 69 is actually asking why Chad is sporting the mask. So if you want. If you want to.

Well, I think it looks good if you've seen me without it. I think I'm really just doing you a favor. I. I appreciate my privacy. I respect my privacy, and I admire those, like Jake, who just put your face out there. I think that's great. It's just a personal choice, but I'm honored to be part of the conversation in spite of that. So thank you.

Yeah. I also think that it creates more intrigue around your personality. So I think it's a great idea.

Yeah.

So I want just to remind our audience to keep on asking questions in the chat. Wherever the question might be, we're going to ask it. And also I want to remind them about the competition. So you need to guess the bitcoin price in one week from now and write it down in the comments below. The winner, the one who gets closer to the price, is going to win 100 bucks worth of credit in our merch store. So let's move on with the next question. So, Jake, you wrote on your blog, on your website that 2020 is showing similarities with 2016 and 2017 in terms of price trend cycle. If you see it like that, the next bull run might be coming soon. So where do you see these similarities between 2020 and 2016? 17.

So not as much so on the price as far as the chart per se, but from the things that are happening as far as sentiment and just watching history repeat itself. So, for instance, one of the things that I've been looking for since 2019 was, what's going to be the next BitConnect? BitConnect was pretty huge in 2017. A lot of people lost money. Some people made, but most people lost. And it was hilarious and horrible at the same time. But, you know, I was kind of thinking to myself, like, there's gonna have to be something else that's like that. And sure enough, hex appears and dumps horribly, and people are kind of writing it off. And I'm thinking to myself, like, I wonder, was that. Was that it? And before you know it, this thing's pumping like 40x. It doesn't make any sense. I mean, there's probably people in the chat, like, yelling at me, but, you know, be careful. But nevertheless, the fact that it pumped, you know, like 4,000%, that was something that made me start to pay attention. This is bitconnect again. But at the same time, you're also in the bear market with altcoins. You weren't seeing the kind of events that you would expect, like announcements of an announcement or some sort of altcoin announcement, exchange listings. The impact on the price was severely diminished. For a very long time, you didn't see any sort of reaction. Now in 2020, you're starting to see these things really, really pump off of exchange listings, things like that. There was a group not gonna name the name, they're based out of Florida, that if you were around in 2017, there's a gentleman who was writing articles and had a. Had a major following that was able to. If he recommended a coin, the coin would go up very significantly, like, hundreds of a percent. This gentleman reappeared this year and. And was able to do that again with a couple different coins that I saw. All of a sudden, you look at the chart and it's like, what happened? It went up 100%. Oh, this guy recommended it. Oh, okay. That stuff wasn't happening in 18 and 19. So as far as, like, within. Around the altcoin market, you're seeing a lot of the same types of behaviors that I wasn't certain that we would ever see again starting to re. Emerge. So that's one thing that made me very kind of optimistic about altcoins. The other thing is, from a technical perspective, we chart BTC dominance, and BTC dominance had made an Inverse Adam and Eve, I believe it was in around September and then started to fill some of the from 70% dominance to 65. The next level is like 61, 62, which I think we will get to. One thing you need to be careful of is Ethereum is looking extremely bullish. It's not there yet, but if it really starts to take off, that's going to start to suck a lot of the market cap out. I think Ethereum has a great chance. Defi technologies are starting to become actually exciting. And the biggest contrast I see between 20 and 17 is the actual belief in the market participants and what you're investing in is starting to return. For most of 18 to 19, I must say, I think a lot of people were kind of just gambling or trading and not really believing in the projects. When I first got involved with crypto and bitcoin and in 2017 I was completely die hard. I thought all these coins were going to change the world. I really was doing research, reading the white papers and believing in that. Obviously they all aren't, but if we can get some actual adoption where decentralized apps are being in play or Ethereum is being used with decentralized finance and we start to get developments like that combined with what I'm seeing on the charts as well as hyperinflation or Fed printer printing money, that creates kind of a perfect storm for a bull market again in both bitcoin as well as altcoins.

Chad, what's your take? Do you agree with Jake or you have a different perspective on the comparison between 2020 and what we saw back in 2020?

17Th, I think there's a lot of truth in what he said. I think I have some similar thoughts. I might elaborate in other directions. I think what's different now is we're seeing also more institutional money that's coming into bitcoin. That's kind of creating more sure footing perhaps for that ecosystem we talked about earlier. When we talk about alt seasons, he rightly pointed out that dominance chart and the best time for the alt season when the BTC pair is running, when it's outperforming versus bitcoin is in. Bitcoin's in a correct phase after it's had a great bull run. You know, we didn't have the alt season till after the 20k. You know, pullback there. There is money out there now. So he rightly points out there are. There are pumpers, there are cheap, you know, wolves in sheep's clothing, whatever metaphor you want to use. Who put out those letters and because people just want to know what to buy, that is gambling. There are also a lot of seasoned people who have been around now, traded for, for several years with eyes wide open.