Could ECM serve a purpose for the Crypto Market?

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Hi there,

i'm sorry to say but i can't give any substantial input because Economic Confidence Model (ECM) is far beyond my Kung Fu and a lot of precious content is behind a pay-wall. I would like to know if there is anyone here willing to share his experience and knowledge about ECM and whether there are chances e.g. to build correlations and thus indirectly make a use of ECM for the crypto market or not. Or whatever purpose it might serve.

All i can say is that ECM is based on Pi which is, like fractals and fibonacci numbers, one of the gifts from mother nature we can use to analyze charts. To get a comprehensive overview on ECM and it's inventor Martin Armstrong i recommend watching the documentary "The Forecaster". After watching it, i felt like i just faced awesomeness. (: You might hate him, you might love him. It doesn't matter here. ECM adds another view to complete the picture as a whole. This is the only thing that should matter. I have added USDJPY to show how nicely a price might follow ECM cycles.

I'm looking forward to interesting comments.

Sincerely

Source: Economic Confidence Model – When One Nation Peaks Another Bottoms

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Here is another chart as an example for the ECM.

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Another example with a correlation. Look how nice they follow the direction of the cycles. Amazing. I personally have no doubt on ECM by now but who i am to judge, being a hobby-trader with just 6 months of experience. (:

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Sometimes a possible answer is nearby, so i wrote a mail to Mr. Armstrong asking for advise. I don't know if that mail even gets forwarded to him, or if i will ever get a reply at all, but at least i took that chance. I'll keep you updated.

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Welcome to a more comprehensive update on this topic and beyond. I recently found the first words about Bitcoin from Martin Armstrong in his private blog which i'd like to share with you.

Quote: "When we run our correlations, it just seems that volatility will be on the rise starting next wee. The interesting aspect is that even Bitcoin is starting to correlate with everything else and seems to be in a declining position on the opposite side of the dollar as we find in gold and the currencies. This is tending to impress the fact that we are looking at a dollar rally that is far broader than most would suspect, including Donald Trump."

If we'll see a sustained correlation in the future - which is my personal preference - we can derive the development of the cryptomarket from other markets. That would enable us crypto traders to better predict future developments and finally help reducing or even avoiding losses and gaining profits. Avoiding losses and gaining profits should be the goal and motivation of trading. At least for me.

I'm no missionary and far away from being a professional trader. I was one of many newbies entering the gold rush in the cryptomarket in the hope of future wealth. It's no shame to admit that i totally failed when i started back in january this year and that i had to pay the price for my ignorance: Loosing a big amount of my savings i've accumulated over the past years by going all-in into cryptos. Going all-in into a market or coin/token without knowledge is the worst you can do. It's a guarantee for failing. The reason for my personal failure was simple: I didn't know anything at all about trading and far too less about cryptos. I thought it's easy but the only thing that's easy is loosing money. By the time i realized that i had to start learning. Learning how to do a technical analysis (often referred as TA), doing research, having patience, not to run behind opportunities (often referred as FOMO, the fear of missing an opportunity) etc. Learning and accumulating knowledge is the key to many things. No one is a born engineer who can design and construct a skyscraper. For every skill to develop you need to learn. Professional traders, sharing their knowledge here on TV, presumably have a proper education and years of experience. Learning and accumulating knowledge is the key to success in many things.

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You might but you shouldn't blindly rely on other people's trading ideas or attitudes (including mine). Always do your own research (often referred as DYOR) before you make your own conclusions and take actions. Bear in mind that no one else is responsible for what you do but you.

ECM is one of many models which describe markets working in (repeating) cycles. I've read some things about other cyclic models but ECM attracted me most because of it's versatility. I've recently started to dig deeper into, trying to understand at least the basics. I don't want to promote this model, every trader has his own toolbox. And so you should make your own decisions about what tools you use to do a more or less proper TA.

If you've read some of my posts already you might have noticed that fractals and fibonacci numbers are my core tools by now. That's my personal decision, not necessarily yours. Others do work too but i don't know them good enough so i stick to what i'm comfortable with. I might cover fibonacci some more in near-term but writing posts takes a lot of time and i sacrifice a decent amount of spare time to learn and share my experiences and limited knowledge (compared to professionals). But for one thing you can be sure: I'm always honest to my best of knowledge and will try to avoid talking about things which i do not (fully) understand. Well, you might think that i don't know ECM aswell. You're right. Take this as a transparent documentary of my learning process. You're invited to join me and to correct me where i'm wrong. I'm a human and humans do make errors. That's ok. But always be respectful.

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It's no secret that the fate of cryptos is bound to the fate of Bitcoin. Bitcoin drives the cryptomarket. Bearing this in mind you might or might not have read news about Tether being pumped into the market to act as a life-support for Bitcoin. That applies to past, present and future and as long as Tether exists and the cryptomarket lacks of regulation. So Bitcoin must hold the support level at roughly 5800 USD. This is market psychology. Andre Kostolany, a former succesful expert of financial markets, said that psychology is one of the main mechanism that drives the markets, he also invented the term "weak hands". Take it or leave it but there's a lot of truth behind. So to keep the cryptomarket running, the near-term goal is to keep Bitcoin above the (current) psychologic level of roughly 5800 USD. If this level get's broken (sustained, not just by a single wick of a candle piercing that level), sell offs will (not could, WILL) be triggered by FUD, reduced or lost confidence in cryptos and trading bots using algorithms (often referred as algo bots). Don't get me wrong, i'm neither a bull nor a bear, i'm just one of you trying to receive wealth in the long-term, trying to rise awareness over the implied risks when trading, especially in the unregulated crypto market, and finally sharing my personal experience and knowledge.

"Trading in cryptocurrency involves significant risks."

You may have read warnings like this one already. Doing research and learning will help to reveal to truth behind plain-sounding statements like these. Professionals can make profits in different market conditions, newbies can't. Avoid unnecessary risks. Sometimes no trade is the best trade. Don't trade when in doubt either.

Final words

If i've made a wrong statement or an error in general, i'm happy for constructive feedback which enables me to further develop myself and my skills. No one is perfect. And no one is right but the market. I wish you all the best of luck in trading. Read you soon.


Sources:
Martin Armstrong Private Blog - ask-socrates.com/Blog/Articles
Martin Armstrong Public Blog - armstrongeconomics.com/blog/
Andre Kostolany - de.wikipedia.org/wiki/André_Kostolany (the german version is a bit more detailed as the english version)
Tether as life-support for BTC - investing.com/news/cryptocurrency-news/tether-usdt-keeps-pumping-liquidity-on-bitfinex-props-up-bitcoin-btc-price-1576328

Use google translate if you don't (fully) understand foreign languages

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p.s.: I will start an educational post with some basic stuff and statements, which might sound like wise sayings of a wall calendar, in the near-term. I hope you'll realize that there might be a lot of truth behind those sayings. This future post will help to keep my posts "clean" and to stay on topic. Please be patient, it needs some time to develop this idea, because i'll do this in my precious spare-time. English is not my mother-language but i always try my best to be as correct and precise as possible, so that you're able to understand my message.