Speaker 1: So the big question is this, how do investors like
Speaker 1: us get access to the ideas, information, and most importantly,
Speaker 1: the right people that give us the tools and information
Speaker 1: we need to make informed and educated decisions to have success.
Speaker 1: That is the question, and this podcast will give us
Speaker 1: the answers. This is Mark Moss, your host. Let's get
Speaker 1: this started. Hello, and welcome to another episode of the
Speaker 1: Market Disruptors podcast. Today I'm joined by Jacob Canfield, host
Speaker 1: of the Crypto Traders podcast, and we get into cryptocurrency,
Speaker 1: bitcoin and trading and investing. He is a well known trader,
Speaker 1: number one ranked on Trading View, and we talk about
Speaker 1: the difference of trading and investing. We talk about how
Speaker 1: trading seems to line up with human sentiment of greed
Speaker 1: and fear and how actually using technical analysis and fibinaci's
Speaker 1: can predict where the markets are. Talk what the difference is.
Speaker 1: We talked about how the average person should look at this,
Speaker 1: especially if they want to try and time the markets
Speaker 1: and do some technical analysis. Some really really good information
Speaker 1: from one of the best traders out in the space today.
Speaker 1: So let's go ahead, just jump right into it. Hey, everyone,
Speaker 1: Welcome to another episode of the Market Disruptors podcast. Today,
Speaker 1: I am joined by Jacob Canfield. He is from Signal Profits.
Speaker 1: He's also the host of the Crypto Traders podcast. Um
Speaker 1: he's someone that I've been following a long time. He's
Speaker 1: a master of technical analysis and trading. And so, Jacob,
Speaker 1: welcome to the show. Thanks for having me man, I
Speaker 1: appreciate it been uh been a while. We've been talking
Speaker 1: about doing a podcast together for about a year now. Yeah. Yeah,
Speaker 1: I'm glad we're I'm surprised it's taking so long. I'm
Speaker 1: glad we're finally doing that. Uh So, Jacob, So, I've
Speaker 1: been working with you for a year and a half
Speaker 1: and I know you really well. But for those that
Speaker 1: don't know who you are, why don't you just give
Speaker 1: us a little bit of background on how you got
Speaker 1: to this space that you're working in, what you're working
Speaker 1: on right now. Well, I've been doing technical analysis for
Speaker 1: about a decade, aid a little bit longer, but but
Speaker 1: full time professionally for about the last three to four years.
Speaker 1: I started out in options back in college. I took
Speaker 1: an options trading course. I've always had a really really
Speaker 1: big heart and passion for fundamental analysis. I'm i myself am.
Speaker 1: I am a technologist, a futurist. I really love emerging technologies.
Speaker 1: I've always been on the cutting netge as far as adoption. UH.
Speaker 1: So you know computers, uh, the iPhone. I was like
Speaker 1: one of the first in line for an iPhone and uh.
Speaker 1: And so my approach is really kind of just investing
Speaker 1: in trading things that I have intimate knowledge about. UM.
Speaker 1: I own a mobile application development company, so I know
Speaker 1: the ins and outs of of mobile applications, Apple, um
Speaker 1: technology like that. But I also have a background in healthcare,
Speaker 1: so those have kind of been like my cross hybrid
Speaker 1: of of my paths. I love e commerce, the healthcare
Speaker 1: wellness industry, and then on the technology and the trading side. UM.
Speaker 1: For me, it's all about quant afiable data, back testing strategies,
Speaker 1: and uh. Trading just boils down to finding edges that
Speaker 1: are greater than fifty and then employing those edges over
Speaker 1: a long period of time, because if you have an
Speaker 1: edge that works better than essentially you're gonna make money
Speaker 1: in the long run. It's just kind of probability and statistics.
Speaker 1: And so that's kind of how I approached the market.
Speaker 1: I find strong fundamental projects and then I like to
Speaker 1: trade them um and try and outperform just a buy
Speaker 1: and hold strategy. So that's kind of how I approach
Speaker 1: pretty much all of my UM investing thesis or trading
Speaker 1: the Yeah, that's good. UM, So it's you know, you
Speaker 1: bring up the difference of investing and trading, and you
Speaker 1: talked about how you like to have a fundamental knowledge
Speaker 1: of it and then trade against it. UM. Maybe for
Speaker 1: a lot of people that aren't really sure what's what's
Speaker 1: what do you think is the difference between trading and investing,
Speaker 1: because sometimes those lines get blurred. Yeah, I just I
Speaker 1: just tweeted this today. I said, don't trade like an
Speaker 1: investor and don't invest like a trader. Uh. There are
Speaker 1: pretty big fundamental differences between the two, and I would
Speaker 1: say the biggest one is time commitment being a trader.
Speaker 1: And there's different variations in different degrees of trading, whether
Speaker 1: I mean, and there's a thousand different methods and strategies
Speaker 1: for trading, whether you're a short term, long term, scalping,
Speaker 1: swing trading, there's all kinds of different approaches. I mean,
Speaker 1: the approaches are infinitesimal or sorry, infinite based on all
Speaker 1: the different angles you can take But the really big
Speaker 1: difference is time commitment. Investing is kind of a one
Speaker 1: time thing. You buy and then you hold for based
Speaker 1: on your thesis if yours is correct. Like Warren Buffett,
Speaker 1: he says, you know, I invested, I invest in all
Speaker 1: of these companies because I believe in the American economy.
Speaker 1: So you know, if you if you don't think the
Speaker 1: stock market's gonna go up, your essentially don't think that
Speaker 1: the American economy is going to go up. And so
Speaker 1: that's his investing thesis and that's how it kind of
Speaker 1: approaches it. But from a trader's standpoint, you don't really
Speaker 1: care too much about the backstory, the investing all that stuff.
Speaker 1: It's really just kind of a time frame preference. You know,
Speaker 1: are you short term, mid term, long term? And once
Speaker 1: you have that kind of thesis behind it, then all
Speaker 1: else it kind of applies. But the other aspect of
Speaker 1: trading that that I think is a really big fundamental
Speaker 1: difference is skill set. Uh, being a skillful trader and
Speaker 1: being a profitable trader is incredibly difficult. There was a
Speaker 1: study done on the i Q of traders and they
Speaker 1: say that people that go into trading have some of
Speaker 1: the highest i q's of the world. But there's a
Speaker 1: rule that basically traders fail. And so when you have
Speaker 1: a group of people that have already a really high
Speaker 1: i Q and of those group of people, only ten
Speaker 1: percent will actually succeed. Uh. It makes it a very
Speaker 1: very competitive marketplace. It's very fierce, and so it's really
Speaker 1: hard to make money as a trader, and so it
Speaker 1: takes a long time to become good and profitable at trading.
Speaker 1: And what I also see the difference between investing in
Speaker 1: trading is that it most people they stop trying to
Speaker 1: trade after about a year. Most people lose all of
Speaker 1: their money within a year, or a lot of majority
Speaker 1: of their money after about a year, and then they
Speaker 1: just kind of switch over to investing because it's a
Speaker 1: lot easier, and it's you know, because trading does take
Speaker 1: time to become good at it. But what we call that,
Speaker 1: you know, what we call the first year to three
Speaker 1: years is tuition. Just like anything, it takes time to
Speaker 1: get good. And with trading, the first three years, all
Speaker 1: the money that you give to the market, to all
Speaker 1: the other people who have been their ten, fifteen, twenty years, Uh,
Speaker 1: that's the tuition to really learn how to trade over
Speaker 1: the long term. So time preference, skill set, um, and
Speaker 1: just just I mean, I think those are the two
Speaker 1: biggest differentiators between investing and trading. But with investing, if
Speaker 1: you're investing in like a fundamental ideology, let's say Bitcoin,
Speaker 1: then your time horizon is drastically different than a trade.
Speaker 1: Your time arizing goes you know, then goes up to
Speaker 1: maybe ten even fifty years, kind of like investing in
Speaker 1: um Forward or Amazon or Apple. If you if you
Speaker 1: believe that the tech chnology is here to stay for
Speaker 1: you know, an indefinite period of time, then you're investing
Speaker 1: these just still holds true, the fundamentals still hold true.
Speaker 1: That's a valuable, valuable company kind of no matter which
Speaker 1: way the market moves, no matter how far your draw
Speaker 1: down is. And so I think that's the that's the
Speaker 1: biggest difference between the two. But for me, I try
Speaker 1: to try, I try to employ kind of a combination
Speaker 1: approach of fundamental and technical. I want to trade things
Speaker 1: that I believe are emerging technologies because a it's got
Speaker 1: the volume, be it's got the hype, um you know,
Speaker 1: so that that's kind of what I'm looking for. I'm
Speaker 1: looking for things that people are buying or things that
Speaker 1: people are going to want to buy, And I have
Speaker 1: a I have a combination approach where you know, part
Speaker 1: of my money is an investing strategy. But I still
Speaker 1: think that and we talked about this before, investing and
Speaker 1: trading has this blurred line where you know, you can
Speaker 1: be a an investor, but you also are a trader
Speaker 1: because a you want to have a good entry. You
Speaker 1: don't want to invest at the top of a massive
Speaker 1: rally um where you know, every technical indicator is showing
Speaker 1: that it's supposed to, you know, have a correction or downside,
Speaker 1: and I don't like to invest into uh, you know,
Speaker 1: very very poor macro economic structure, meaning you know, what's
Speaker 1: going on with the Federal Reserve, what's going on with
Speaker 1: all the geopolitical stuff around the world, is showing that,
Speaker 1: you know, the dollar might strengthen, showing stocks might be
Speaker 1: going to I don't want to invest into a climate
Speaker 1: like that, So I like to time it with technicals,
Speaker 1: but I like to tie my position trades, meaning my
Speaker 1: longer term investments into like a really strong downtrend UH
Speaker 1: into a fundamental project, right like if if Amazon drops,
Speaker 1: I'm not gonna blink at buying it because the fundamentals
Speaker 1: don't change from the week before to the week after.
Speaker 1: It's it's you know, I'd rather buy into blood rather
Speaker 1: than buying into euphoria onto my fundamental and you know,
Speaker 1: beliefs or my fundamental project. Yeah, so I think it it.
Speaker 1: I think what you're saying, though, it really depends on
Speaker 1: the specific asset class itself. So, um, when you're talking
Speaker 1: about more broader based assets like Amazon, for example, there's
Speaker 1: strong fundamentals, meaning assets cash flow, returns on cash flow, earnings,
Speaker 1: things like that, and so the fundamentals, as you say,
Speaker 1: don't change, although the price could change. So then technically, um,
Speaker 1: that gives you good entries. But I think when you
Speaker 1: get into stuff like cryptocurrencies, for example, you don't have
Speaker 1: those fundamentals, so there is no cash flow, there is
Speaker 1: no assets, earnings, et cetera. And so then do you
Speaker 1: think that's really all more speculation or trading. I mean,
Speaker 1: technically that's not investing, right, It's I would think it's
Speaker 1: almost all speculation that it's going to be up, go
Speaker 1: up and value in the future. Yeah, And I think
Speaker 1: I think an important point is to segregate bitcoin from
Speaker 1: the rest of the market. I think that bitcoin does
Speaker 1: have fundamentals, It has a value prop position, and it
Speaker 1: does have You can actually calculate how much each bitcoin
Speaker 1: is worth based on the electricity consumption that it takes
Speaker 1: to actually produce one bitcoin into power the bitcoin network.
Speaker 1: So there is some there is some you know, uh,
Speaker 1: fundamental value in what you can define with bitcoin. And
Speaker 1: also what is bitcoin kind of competing against and what
Speaker 1: is its long term speculative value and uh, you know,
Speaker 1: for bitcoin, it's the entire you know, monetary supply. Any
Speaker 1: currency can go into Bitcoin. It's an alternative asset class,
Speaker 1: and so that has that you kind of have to
Speaker 1: segregate that from the rest of the cryptocurrency market. But yes, uh,
Speaker 1: you know people and in a very good example is Ripple.
Speaker 1: Ripple the company has cash flow at has earnings, but
Speaker 1: you're not buying equity into Ripple. You're buying the x
Speaker 1: RP token, which used to be called Ripple but now
Speaker 1: it's just called XRP. But x RP has really no
Speaker 1: fundamental basis for it other than it's a use case
Speaker 1: for maybe money remittance or money transfers across the world. Uh,
Speaker 1: And so that one you can't really put much of
Speaker 1: a fundamental thesis behind it. There's nothing you can really
Speaker 1: measure it on. And especially because it's essentially controlled entity
Speaker 1: with as far as like supply is concerned, ripple controls
Speaker 1: six it. So with that, I base almost all of
Speaker 1: my investing or trading decisions on technical indicators. And so
Speaker 1: for me, technicals are the benchmark for what I should
Speaker 1: base all of my decisions for cryptocurrency on, because who
Speaker 1: controls the decisions of a lot of these things are
Speaker 1: market makers and algorithms and and frequency and high frequency
Speaker 1: traders in the market, and they use technical indicators as
Speaker 1: a basis for almost all of their decisions. And so
Speaker 1: a lot of these uh quant programs are programmed by humans,
Speaker 1: and humans are looking at the technicals um and very
Speaker 1: little if any have fundamental basis uh and they are
Speaker 1: almost all speculative, which makes the cryptocurrency markets a beautiful
Speaker 1: market to trade because you're basically trading on emotion. You're
Speaker 1: trading on fear and greed and and those two emotions
Speaker 1: and hope, right, and those two emotions are very very
Speaker 1: profitable to trade off of and very easy to trade
Speaker 1: off of because there's such there's such a reactive Uh,
Speaker 1: it's such a reactive method of trading. Yeah, I want
Speaker 1: to get into that. That's an important piece that I
Speaker 1: wanted to touch on. But before we do so back
Speaker 1: to your original tweet, you talked about where the best
Speaker 1: investors are traders or traders shouldn't invest like investors and
Speaker 1: investors not like traders. But I think, um, there's one
Speaker 1: common trade that I like, and you talked about um
Speaker 1: having that thesis, and so I what I like that
Speaker 1: I see with traders as traders are getting in looking
Speaker 1: to get in at a certain entry and out at
Speaker 1: a certain exit. And I think a lot of a
Speaker 1: lot of investors maybe a lot of times, like you said,
Speaker 1: it's not it's easier maybe right, So they just buy
Speaker 1: Amazons that's gonna go up, I'm gonna buy bitcoins is
Speaker 1: going to go up or whatever, but they don't really
Speaker 1: think about the exit, like at what point should I
Speaker 1: take a profit? What's my thesis? Do I believe that
Speaker 1: when I bought Amazon that I believe that e commerce
Speaker 1: was going to change the world in Amazon will be
Speaker 1: the leader? If so, I wait that long? Or do
Speaker 1: I think I'm buying it? Bitcoin in ten thousand day
Speaker 1: and it's gonna go to twenty tho, I'm gonna sell
Speaker 1: out there, right, So what do you think about that, uh,
Speaker 1: that investing thesis that that I guess investors could learn
Speaker 1: from traitors. Well, it's that that's a that's a hard
Speaker 1: thing to really judge. Right when is the best time
Speaker 1: to sell? Right? Because people, people that bought it at
Speaker 1: twenty thous what if bitcoin goes to a million dollars,
Speaker 1: They're gonna look like a genius? Right, And I'm I'm
Speaker 1: working on this post or this this article. Basically I did.
Speaker 1: I did a tweet about a week ago that said,
Speaker 1: given enough time, bitcoin is an asset that makes everyone
Speaker 1: look like a genius, no matter where they bought it at.
Speaker 1: And the whole concept is looking at every bubble of bitcoin,
Speaker 1: and everybody who bought at the top, no matter how
Speaker 1: high you know, at the very tippy top, is a
Speaker 1: genius unless you bought it twenty But we are rapidly
Speaker 1: approaching that. We are going to make them geniuses too.
Speaker 1: And so if you bought it a hundred dollars before
Speaker 1: a crash down to you know, a dollar, you're still
Speaker 1: a genius because even if you held draw down and
Speaker 1: it went all the way to the current price. Now
Speaker 1: at ten thousand dollars, you still made a hundred extra
Speaker 1: turn on your money, a hundred dollars to ten thousand.
Speaker 1: If you bought at you know, two thousand dollars, you
Speaker 1: bought a five thousand dollars. If you bought at twenty
Speaker 1: tho dollars. I think in five years, if, if, if,
Speaker 1: and when bitcoin gets to two hift dollars, you're still
Speaker 1: gonna look like an incredible genius because you've just ten
Speaker 1: extrar money. You've made a hundred percent on your money
Speaker 1: in one of the fastest great asset classes. And so
Speaker 1: that's really hard to say because holding holding bitcoin, I know,
Speaker 1: it's become a meme is very very difficulty. They say
Speaker 1: it's super easy, but it's actually really really difficult. You
Speaker 1: have to have the gut in the fortitude of you know,
Speaker 1: a mercenary right. You have to really be able to
Speaker 1: hold through some massive draw downs. Bitcoin went from twenty
Speaker 1: thousand to three thousand. Most people capitulated. You could see
Speaker 1: the um. It's called the day the decay of of um.
Speaker 1: It's like basically the time of decay for bitcoin. Hold
Speaker 1: alurs and and it's basically the amount of new money
Speaker 1: that comes into the amount of old bitcoin that gets exchanged.
Speaker 1: And I had the highest volume at three thousand, two hundred,
Speaker 1: and I said, I think a lot of the old
Speaker 1: holdelers who bought at you know, five hundred thousand dollars,
Speaker 1: I think they capitulated at because I thought. I think
Speaker 1: they thought it was gonna go much much lower. And
Speaker 1: so it's really interesting because if you believe in the
Speaker 1: thesis and you believe that, you know, bitcoin can become
Speaker 1: a world currency, the sky is really the limit because
Speaker 1: now you're talking seven hundred billion dollars in derivative assets,
Speaker 1: and you're talking, uh, the you know, the monetary supply
Speaker 1: of the UK, the British pound, that the US dollar
Speaker 1: and all that stuff. So having an exit in mind
Speaker 1: for bitcoin is very tough. I think that's probably one
Speaker 1: of the hardest assets to really kind of peg down.
Speaker 1: As a trader, you can definitely figure out when you
Speaker 1: want a time in and time out. And one of
Speaker 1: my thesis that I've always held true, and one thing
Speaker 1: that saved me in seventeen was if an investment or
Speaker 1: a trade, if you take profits and it's enough to
Speaker 1: change your life or change the circumstances of your life
Speaker 1: for the better are on the table. I would always
Speaker 1: recommend at least taking that because you never know what's
Speaker 1: gonna happen. You never know, you know, tomorrow the whole
Speaker 1: UH landscape could change with regulations, fadd on ramps, all
Speaker 1: the steven things, and your investment that is, you know,
Speaker 1: basically set you up for life, or set you up
Speaker 1: for the next ten fifteen years to be able to
Speaker 1: live life to the fullest, have the freedom you want,
Speaker 1: retire from your job, you know, give you time to
Speaker 1: find a new job. If you don't take that, UH,
Speaker 1: then then it's always gonna It's always gonna be in
Speaker 1: the back of your mind. It's always gonna beat you
Speaker 1: up if it if it crashes, or if the price
Speaker 1: turns around. And I think the biggest thing about bitcoin
Speaker 1: and cryptocurrencies is fomo, the fear of missing out. I
Speaker 1: see people buying at the bottoms of you know, every
Speaker 1: single dip, every single dip, every single dip, because they're
Speaker 1: so afraid of missing that one candle that you know
Speaker 1: it goes up with thousands. But the markets don't move
Speaker 1: like that. Bottoms don't form off of um you know,
Speaker 1: off of just one single candle. Typically bottoms take you know,
Speaker 1: time to form and so, and there's always time to
Speaker 1: enter into an uptrending market. I think you have a
Speaker 1: very famous quote of Rockefeller where he says he made
Speaker 1: the most money not by getting into earlier getting out,
Speaker 1: you know, getting into the bottom or getting out at
Speaker 1: the top. He always made his money in the middle
Speaker 1: by just following the trend and then exiting before the
Speaker 1: before the top was formed. So that's kind of my
Speaker 1: investing thesis for bitcoin. I know, you know where my
Speaker 1: exit points are. I know where my entry points are,
Speaker 1: and you know, for me, it's it's about you know,
Speaker 1: making enough money to to form freedom. But I do
Speaker 1: have a portion of it where I just never touch it,
Speaker 1: right because my thesis is that bitcoin could eventually take
Speaker 1: over as a global revert reserve currency. It's the best
Speaker 1: competition we've ever seen against the dollar, and the dollars
Speaker 1: is the best currency on in the world. And I
Speaker 1: don't think that, and I think that bitcoin has a
Speaker 1: good chance as long as the technology continues to evolve.
Speaker 1: But you know, that's my thesis and I can't recommend
Speaker 1: it for everybody. Now you mentioned um you mentioned how
Speaker 1: people are trying to foamoin at the bottom and they're
Speaker 1: trying to capture that candle catching knives as we like
Speaker 1: to say. Um, it's it seems like it's really hard
Speaker 1: for people to be either a traitor or an investor
Speaker 1: because it goes against our own human intentions, right, Like
Speaker 1: we just wanna we we want to we want pleasure,
Speaker 1: we want to get away from pain. Um. And I
Speaker 1: know you've talked a lot about how actually technical analysis
Speaker 1: actually plays along with that human emotion you think, right,
Speaker 1: like the mathematical formulas somehow can predict that human emotion cycle. Yeah.
Speaker 1: So Fibonacci is a perfect example. I've studying Fibonacci just
Speaker 1: in nature, but also apply to the markets and and sentiment.
Speaker 1: I created my own Fibonacci UH sequence. It's called the
Speaker 1: Canfield Fibonacci sequence. It's a it's a a sequence of
Speaker 1: numbers that apply to long term investing thesis. Um, you
Speaker 1: can google that online. But Fibinaci is really really interesting
Speaker 1: because those Fibonacci levels, the sixty one point eight percent ratio,
Speaker 1: the seventy eight point six ratio. I believe that these
Speaker 1: are measurements of human emotion. When something is in a rally,
Speaker 1: it shows you exactly how euphoric people can be. And
Speaker 1: it turns around as specific um Fibonacci extension levels because
Speaker 1: it shows you how exuberant group of people can be
Speaker 1: or cohort or population. And then the retracements are showing
Speaker 1: exactly how fearful people can be, how how much are
Speaker 1: people willing to sell down? In those ratios um I
Speaker 1: think are a direct reflection of human emotion, and and
Speaker 1: it quantifies human emotion, It quantifies reactionary uh, reactionary into
Speaker 1: into markets. And obviously you can say it's you know,
Speaker 1: self fulfilling prophecy. It could be algorithms that trade off
Speaker 1: of those levels, um, you know, chicken or the egg
Speaker 1: type of thing. Are we measuring human emotion? Are we
Speaker 1: measuring uh, just quantifiable data that algorithms are using. You know,
Speaker 1: you can it can go one way or the other,
Speaker 1: but yeah, I believe that we have the human emotion piece,
Speaker 1: which I like to say volatility price going up and
Speaker 1: down is the difference between perception and reality. And so
Speaker 1: we perceived something to be like when bitcoin h we
Speaker 1: perceived it to be way further ahead, like it was
Speaker 1: ready to take over the world. But the reality is
Speaker 1: it wasn't, and so perception had to come down, price
Speaker 1: had to come down. But then it overcorrected. So then
Speaker 1: bitcoin made massive advancements in regulation and technology and adoption,
Speaker 1: but then the perception obceived value was really low and
Speaker 1: so it went too far and and and it keep
Speaker 1: going back and forth. And I guess, uh what I
Speaker 1: like to say about that is also what you're saying
Speaker 1: with the Fibonacci's and so um, that's how it's reacting
Speaker 1: between perception and reality. Yeah, uh more more based on
Speaker 1: like fear and greed and you know, euphoria, Like I
Speaker 1: would say, I would say fear and euphoria are kind
Speaker 1: of the two emotions that are the you know, the
Speaker 1: most applicable to trading and investing. When everyone is euphoric,
Speaker 1: that's when I, you know, typically like to try and
Speaker 1: find my exit points. And when everyone is depressed or
Speaker 1: angry or fearful, that's the best time to buy. And
Speaker 1: we hear and we hear that all the time, like
Speaker 1: by when people are fear by, when people are fearful,
Speaker 1: so when people are greedy. But it's really hard to
Speaker 1: know that. But you're saying that you think you can
Speaker 1: track that using these fub nacis right, absolutely, well, you
Speaker 1: can also track it based on um. You can do
Speaker 1: you can do a quant study based on emotion. Uh.
Speaker 1: You can do a quant study based on you know,
Speaker 1: like the in the fear and index greed um when
Speaker 1: to buy based on specific numbers, and you can actually
Speaker 1: do a calculation what if you bought, you know, when
Speaker 1: the fear in index three greed hits ten and you
Speaker 1: know what is the price of you know x uh,
Speaker 1: you know what is the price of bitcoin five days after,
Speaker 1: ten days after, twenty days after And you can actually
Speaker 1: quantify that data and build a trading thesis around it
Speaker 1: or a trading plan or an investing plan um, just
Speaker 1: like you can do with the way that the markets
Speaker 1: are move up and move down. Um. So that's you
Speaker 1: can definitely apply emotion and sentiment to markets. The problem
Speaker 1: is when you get into liquid markets, sometimes there is
Speaker 1: no bottom. That's what's that's what we call price discovery.
Speaker 1: The bottom can sometimes be zero um. And we saw
Speaker 1: this in the in the dot com era, and we
Speaker 1: saw this in the old coin market where yes, it's
Speaker 1: good to buy blood, but it's good to buy blood
Speaker 1: on something that has a fundamental basis, like you said,
Speaker 1: cash flow, assets, et cetera, where you know, if it
Speaker 1: goes down, you know that it has a fundamental thesis
Speaker 1: behind it. And so that's something where you can try
Speaker 1: and buy the blood or by the by the by
Speaker 1: the try and buy the bottoms or cost average near
Speaker 1: the bottom, whereas some things just don't have a bottom
Speaker 1: because there's no fundamental uh thesis that holds them up.
Speaker 1: There's no cash flow, the project is dead, the developers
Speaker 1: have abandoned that, there's no there's no liquidity, it gets
Speaker 1: delisted from exchanges. There's lots of fundamental reasons why you
Speaker 1: should not trade. And that's the problem that I see
Speaker 1: was a lot of traders that came from the markets
Speaker 1: is they see these all coins that went up eight
Speaker 1: nine hundred percent, and they're just trying to buy the
Speaker 1: bottom of a market that might not have a bottom,
Speaker 1: or the bottoms of zero or the or the bottoms
Speaker 1: of a zero. We saw, we saw a lot of
Speaker 1: coins on bit tricks that used to have incredible price
Speaker 1: reactions when you got to those all time low levels.
Speaker 1: But it broke the all time lows, and you know,
Speaker 1: there was like six or seven projects that went to
Speaker 1: one SETOCE that was the bottom one SETOCE and then
Speaker 1: they got delisted. So now there's absolutely no liquidity. So
Speaker 1: you have to be really careful about what you're investing,
Speaker 1: and you met you want to make sure that there's
Speaker 1: enough liquidity to actually trade it or invest in it,
Speaker 1: because you want to be able to exit a position.
Speaker 1: You don't want to be stuck in a position where
Speaker 1: you can't exit it. I made the mistake of buying
Speaker 1: into a like a privacy project on um what's what's
Speaker 1: it called Cryptopia, and Cryptopia got hacked in their exchangement
Speaker 1: down and that was the only place for liquidity. So
Speaker 1: with that investment, I couldn't or you know, with that trade,
Speaker 1: I couldn't exit my position. So that's why now I
Speaker 1: look for things that have four or five, six, seven,
Speaker 1: eight exchanges and then I hold my trader, I hold
Speaker 1: my investment if it's a longer term play onto my
Speaker 1: wallet where then I can create an account on one
Speaker 1: of these six exchanges, and so I'm not dependent on
Speaker 1: one of these areas. And so that's kind of how
Speaker 1: it applies to crypto specifically. A is you really don't
Speaker 1: want to keep all your eggs on in one basket,
Speaker 1: whether that's an exchange UM or you know. Yeah, yeah,
Speaker 1: Now back to the fear and greed and the five
Speaker 1: and Nachi's and whatnot. UM, I tend to I tend
Speaker 1: to agree with you on that, just because I've seen
Speaker 1: it play out over and over. But what about like
Speaker 1: bigger macroeconomic events. Like sometimes it's almost seemed like it's
Speaker 1: lined up with bigger events that like would be outside
Speaker 1: of youringreed almost black swan events, but like there's like
Speaker 1: this like unique timing or or coincidence sometimes. Jesse Livermore
Speaker 1: arguably one of the best traders who's ever lived. He
Speaker 1: has an incredible book that he wrote back in the
Speaker 1: nineteen thirties nineties. UM. He believes everything is priced into
Speaker 1: the market, even black swans. Everything is priced in UH.
Speaker 1: And it's even more so now in the information age,
Speaker 1: where information is transmitted you know so quickly and spread
Speaker 1: so fast virally through social networks. But I've seen it
Speaker 1: time and time and time again. Where you know technical indicators,
Speaker 1: it's showing, you know, a wedge pattern or a symmetrical triangle,
Speaker 1: or it's showing like a massive barished divergence where it's
Speaker 1: you know, everything's lining up, and then outcomes the news
Speaker 1: story where it then creates this catalyst that plays out
Speaker 1: perfectly with technical analysis, and you know you're in the
Speaker 1: right side of the trade. The market tanks, you're you know,
Speaker 1: you're shorting the market, and it's like, you know, you
Speaker 1: see people going, man, Wow, how the hell did you
Speaker 1: know that was gonna happen. It's like, well, the technical
Speaker 1: analysis showed that this was, you know, this was the
Speaker 1: outcome that we were going to see, and sometimes it
Speaker 1: just takes the news story to kind of push it
Speaker 1: that way. The other the other side of that, and
Speaker 1: I've done a lot of backs back testing research. Some
Speaker 1: people might remember, I had a CNBC chart showing the
Speaker 1: profitability of counter trading uh CNBC's headline tweets basically like
Speaker 1: every time they were super euphoric was at the very
Speaker 1: top of a peak. If you had short at every
Speaker 1: tweet where they had posted that, you would have made
Speaker 1: an incredible amount of money. And if you had long
Speaker 1: on every time they said bitcoin is dead, you would
Speaker 1: have again made a lot of money. And so I
Speaker 1: do see times where you see like on CNBC or
Speaker 1: Fox or CNN on the market analysis, where for whatever reason,
Speaker 1: they are putting out news stories that are completely contra
Speaker 1: indicators to what what's going to happen in the markets. Uh,
Speaker 1: they put out like superbarished news stories right at the
Speaker 1: bottom of the market where it's like the technical indicators
Speaker 1: are showing reversal. And it's for me, it's sometimes I
Speaker 1: wonder if if big money, smart money is just trying
Speaker 1: to you know, build their liquidity so they have you know,
Speaker 1: they create panic, or maybe maybe it's not so sinister.
Speaker 1: Maybe it's that they're chasing news headlines right there, trying
Speaker 1: to get viewers, and so they're picking up the most
Speaker 1: ufork story to run, so like it's it's an indicator
Speaker 1: of where fear and greed is because everyone's so greedy
Speaker 1: that's making news. So they're finally, hey, we should run this.
Speaker 1: Everyone's greedy right now. Um, And maybe that's why it is. Yeah,
Speaker 1: I guess, I guess my take is a little bit
Speaker 1: more conspiratorial or cynical, and yours is just a little
Speaker 1: bit more uh make more logical. I guess, Uh, yeah,
Speaker 1: that's that's definitely possibly the case. I Mean I asked
Speaker 1: CNBC themselves, like about it, and they say, well, you know,
Speaker 1: we're just we just tweet what's in the market, you know.
Speaker 1: But my my issue is these are trained analysts, trained investors.
Speaker 1: You know. Jim Kramer, he ran a hedge fund. There's
Speaker 1: a really famous YouTube video about him talking about how
Speaker 1: he used news stories to build positions, either short liquidity
Speaker 1: or long liquidity UM, and he said, you know, he
Speaker 1: would just send out a little uh tip to UH
Speaker 1: routers or Bloomberg or one of the analysts over there
Speaker 1: about you know, a rating that's going to happen on
Speaker 1: you know, one of the stocks or whatever. And so
Speaker 1: for me, just the way understanding the way that the
Speaker 1: markets work and understanding the way that these these fund
Speaker 1: managers kind of build positions, and everything is about profit
Speaker 1: to them. So uh, you know, the retail trader is
Speaker 1: insignificant to what they're trying to achieve. Their their bottom
Speaker 1: line is to their their investors and to their shareholders.
Speaker 1: And so I would probably I I definitely look at
Speaker 1: the market as more of a conspiratorial Yeah. I want
Speaker 1: to go back to something that you mentioned before. Everything
Speaker 1: is priced into the market. UM. I had ran a tweet,
Speaker 1: uh maybe a week ago where I basically said, everyone's
Speaker 1: talking about the Havning coming up. Uh, they're talking about
Speaker 1: backed coming out, which they finally released, that they're coming
Speaker 1: out in September, UM, and and everyone's talking about this
Speaker 1: and and then there's like a lot of talk about
Speaker 1: front running that price UM, which maybe doesn't mean the
Speaker 1: price is already is the price is already in the market,
Speaker 1: but that it's coming in. And I got into a
Speaker 1: debate with a guy about the Havning, Uh, the research
Speaker 1: that's been done by a Plan B a hundred trillion
Speaker 1: about UM the price going up on the Havnening, which
Speaker 1: is coming up next year. And so with with events
Speaker 1: like back or with events like the happening, I mean,
Speaker 1: don't you think like everyone is front running that so
Speaker 1: at some point that prices, like almost every price is
Speaker 1: already in the market. Basically what you said, the question
Speaker 1: is who is everyone? Right? So Bitcoin, the market cap
Speaker 1: is insignificant. Gold is fourteen trillion, uh bitcoin and the
Speaker 1: entire cryptocurrency market market cap isn't even at a trillion
Speaker 1: dollars yet. So it's it's so small that I don't
Speaker 1: think that. I mean, we're a small population of people.
Speaker 1: And so yeah, maybe people that are priced in right
Speaker 1: now are front running it. The beautiful thing about trends
Speaker 1: is short term trends are manipulatable. You can manipulate them.
Speaker 1: Mid term trends somewhat manipulatable, and a market like crypto
Speaker 1: for sure. But long term trends five years, ten years,
Speaker 1: twenty years, thirty years, fifty years, those are not manipulatable.
Speaker 1: It takes way too much money to manipulate a trend
Speaker 1: that goes that long. And so the data is there
Speaker 1: that shows exactly what has happened every prior time. And uh,
Speaker 1: you're a fan of history, it doesn't you know, repeat,
Speaker 1: but it often rhymes. And so all you can do
Speaker 1: is really use that data to make your best educated
Speaker 1: guess as to what's going to happen in the future.
Speaker 1: Nobody has a crystal ball, no analyst um especial. I
Speaker 1: mean you can you know that's true because two thousand eight,
Speaker 1: very very few people there was a movie, The Big Short,
Speaker 1: where only a handful of firms made billions of dollars
Speaker 1: off that off that short um and everybody else was
Speaker 1: caught blindside it. The same thing is true with bitcoin.
Speaker 1: I think bitcoin is gonna blindside a lot of people.
Speaker 1: I think that, uh, nobody really has any clue. And
Speaker 1: I know that because I've been in the market for
Speaker 1: three and a half years and I've kind of rubbed
Speaker 1: shoulders with the top developers, the top traders, the top investors,
Speaker 1: the top hedge fund managers that are in cryptocurrencies. Nobody
Speaker 1: really has any any clue what bitcoin is capable of,
Speaker 1: especially in a recession, especially uh, with all these trade talks,
Speaker 1: especially with all this stuff. So I don't know that. Sure,
Speaker 1: you can, you know, estimate what's going to happen with
Speaker 1: the having, but bitcoin is a deflationary currency, and it's
Speaker 1: and as you did a podcast with Mark Usko, it's
Speaker 1: schmuck insurance against against a against the system. And we
Speaker 1: just we were at twenty two trillion dollars in debt
Speaker 1: or twenty four trillion whatever. I can't even remember the number.
Speaker 1: It's going up so fast. We just don't know what
Speaker 1: the potential of bitcoin is. And I think the most
Speaker 1: important thing that I've learned is it's cheaper to own
Speaker 1: it and not need it than it is to need
Speaker 1: it and not own it. I think that that's you know,
Speaker 1: that that's the kind of the way that I view
Speaker 1: bitcoin is it is insurance because you just don't know
Speaker 1: the potential or how valuable it's going to be until
Speaker 1: you need it. Right. So, in Statoshi's a white paper
Speaker 1: for bitcoin, the creator of bitcoin, he wrote a white
Speaker 1: paper and in the white paper he said, Um, not exactly,
Speaker 1: but he said, Uh, wouldn't it make sense to get
Speaker 1: some just in case it catches on or something like that? Yeah? Exactly. Yeah, Yeah,
Speaker 1: wouldn't it make sense just to get some just in case?
Speaker 1: Is what he said. And that's kind of what you're
Speaker 1: saying the insurance. I like that. Great. Well, I know
Speaker 1: we're running along here. Let's just ask maybe one more question. So, uh,
Speaker 1: for those people that are listening and you know, they're
Speaker 1: not sure where they're at investing, trading, Like you said,
Speaker 1: in trading, it can be very difficult. It takes a
Speaker 1: lot of i q um. But for people who think
Speaker 1: they would want to try and do better than just
Speaker 1: buying and holding blindly, what would you recommend for them?
Speaker 1: I mean, should they stay away from trying to buy
Speaker 1: in and out at all? Or is there some really
Speaker 1: basic stuff they could do or what would you recommend? Yeah? So, um,
Speaker 1: first off, I would recommend at least trying to learn
Speaker 1: technical analysis because it makes investing so much easier when
Speaker 1: you can actually, you know, be able to look at
Speaker 1: a chary understand where the trend lines are, where where
Speaker 1: the support and resistance is um And for me, the
Speaker 1: easiest and most brain dead strategy is by when it's
Speaker 1: above the two day moving average and sell when we
Speaker 1: break the two day moving average. That strategy is just
Speaker 1: so simplistic and obviously you don't have to sell right
Speaker 1: when across the tunter day moving average. It's a lagging indicator,
Speaker 1: but it's such a simplistic way to uh, to be safe,
Speaker 1: to be on the safer side, because when it breaks
Speaker 1: that tuorter day moving average, typically the intermediate the mid
Speaker 1: term trend is up and one as we break that
Speaker 1: to a moving average, typically it has you know, six
Speaker 1: especially bitcoin, uh, you know, six to eighteen months of
Speaker 1: of a nice up trend, and it just keeps you out,
Speaker 1: It keeps you out of trying to buy every single bottom,
Speaker 1: trying to time. The other aspect is um as you know,
Speaker 1: dollar cost averaging. But my my, my strategy is not
Speaker 1: dollar cost averaging. At any point in time, I try
Speaker 1: and dollar cost average as close as possible to the
Speaker 1: two hundred weekly moving average, because that is a historically
Speaker 1: a very very strong reversal point on in any market. UM.
Speaker 1: And so when when you look at bitcoin, Bitcoin actually
Speaker 1: bottomed out at the level on the two hundred weekly
Speaker 1: moving average, and so did Amazon. Amazon pulled back hundred
Speaker 1: weekly moving averages where it bounced, uh the SMP five hundred,
Speaker 1: two hundred weekly moving average. And so if you can
Speaker 1: dollar cost average as close to possible as that two
Speaker 1: hundred weekly moving average, UM, I think that's where that's
Speaker 1: where most of the money can be captured as close
Speaker 1: to the bottom as possible. And uh, and when you
Speaker 1: break that, you under weekly moving average to the downside, UM,
Speaker 1: that's where it you may be entering a price discovery mode.
Speaker 1: And I would, UM, I would wait until that's recaptured
Speaker 1: before I would really start putting a lot more money
Speaker 1: in UM. Personally, So to summarize that, you think the
Speaker 1: average person could start by just learning one simple thing,
Speaker 1: like a moving average strategy and maybe just try to
Speaker 1: like get good at that before they overcomplicate things. I
Speaker 1: think that so I've I've run the gamut right when
Speaker 1: I started. I started in options and options is pretty complex.
Speaker 1: You have to learn all these different strategies, the straddle,
Speaker 1: the the iron condor. I mean, there's all kinds of
Speaker 1: different names for him hedging, you know, buying longs and
Speaker 1: puts at the same time, breaking, I mean, all kinds
Speaker 1: of different stuff. Then I went into you know, price
Speaker 1: action trading. Then I went into UH indicator analysis, and
Speaker 1: then I went into geometric sacred geometry like again, analysis,
Speaker 1: fractal analysis, fractal energy, I mean, all kinds of stuff.
Speaker 1: And after all that, ten years of learning all these
Speaker 1: crazy things and pain, probably a hundred thousand dollars to
Speaker 1: mentors and courses and all, my strategy has really just
Speaker 1: come down to really really simple things. Our side, moving averages,
Speaker 1: support and resistance. I mean that's basically all I use
Speaker 1: for almost everything. And then I've just built a strategy
Speaker 1: in a system around it that gives me a better
Speaker 1: edge than So. Yeah, so after going through all that stuff,
Speaker 1: really and what I would really say is find one
Speaker 1: thing and master it. Whether it's our side, whether it's
Speaker 1: moving averages. Find a guy who wrote a book on
Speaker 1: moving averages. Find a guy who's made you know, millions
Speaker 1: of dollars on just moving averages and study it. What
Speaker 1: most people do is a hop from system to system
Speaker 1: to system to system, and they never really take enough
Speaker 1: time to master that one thing, um, you know. And
Speaker 1: that's what I would say, is just focus on one indicator.
Speaker 1: One makes me think that Bruce Lee quote right, like
Speaker 1: a fear of the man, and who's practiced one minute
Speaker 1: one kick ten thousand times, not ten thousand kicks one
Speaker 1: time or something like that exactly. And that's that's the
Speaker 1: problem that I see with most traders. They literally just
Speaker 1: hop system to system to system the system and they
Speaker 1: never they never master any one thing. But I think
Speaker 1: the biggest thing is, you know, they have to all
Speaker 1: these different systems because they're trying to find a system
Speaker 1: that fits for them. And that's like I said, skill level,
Speaker 1: time commitment. Um. You know, most traders they come in
Speaker 1: and they only have an hour a day. You know,
Speaker 1: they're part time, they're working and there you know, and
Speaker 1: maybe some some people that are listening, you know, they're
Speaker 1: they're they're at you know, they have job, they have families.
Speaker 1: They can't stay in front of a trading terminal twelve
Speaker 1: to eighteen hours a day like I can. Um. And
Speaker 1: I think that's a big part of of finding those systems. Great. Yeah,
Speaker 1: that's uh, that's that's good advice right there. Just look
Speaker 1: at the moving average. Learn one thing. I know you've
Speaker 1: you like you said, you've kind of boiled it down
Speaker 1: to three or four things that you're good at. Now,
Speaker 1: well ahead and wrap this up now. I know you
Speaker 1: just put out something on trading View that rapidly rose
Speaker 1: to the ranks number one on Trading View and it
Speaker 1: kind of actually shows when to buy and sell using
Speaker 1: just maybe two strategies. So recommend people to go check
Speaker 1: that out on Trading View. I think you also have
Speaker 1: like a real kind of like introductory course on t
Speaker 1: A that people can jump in. Do you want to
Speaker 1: talk about where people can find out more about you? Yeah?
Speaker 1: I reallysed this course. It's called the twenty one Day
Speaker 1: Crypto Trader Challenge, And what it is is it's a
Speaker 1: it's twenty one days of of study to learn how
Speaker 1: to trade cryptocurrencies. And what it was is it's not
Speaker 1: designed to create to make you into this advanced trader.
Speaker 1: It's it's really designed to just create a foundation of knowledge.
Speaker 1: And so the biggest thing that I see is most
Speaker 1: people they jump into trying to learn technical analysis. And
Speaker 1: technical analysis is one part of about eight parts of
Speaker 1: a good trader. UH. The other parts that I think
Speaker 1: are even more important are UH psychology, discipline, risk management.
Speaker 1: Risk management is very key. There's an entire module on
Speaker 1: risk management. When it comes down to UH, you know,
Speaker 1: basically win loss ratio, your position sizing, UM, all those
Speaker 1: different things, and then tracking your trades. And so what
Speaker 1: I did was I put this twenty one day Crypto
Speaker 1: Trader Challenge, and I priced it very very affordably. I
Speaker 1: wanted everybody to be able to UH to join, and
Speaker 1: it's only a hundred bucks. And what it does, it
Speaker 1: just gives you everything you need to know about how
Speaker 1: to you know, how to basically build a foundation of
Speaker 1: knowledge for trading. And then what you can do is
Speaker 1: you can take all that information and then start to
Speaker 1: learn the more advanced strategies like actual how to build
Speaker 1: out a trading plan. But you at least you're introduced
Speaker 1: to all these concepts and you can master the foundation
Speaker 1: or the you know, the building blocks, and then you
Speaker 1: can go out and become really really good traders. So yeah,
Speaker 1: Crypto Trading Challenge dot com we do one once about
Speaker 1: every three months. We take on a bunch of traders.
Speaker 1: They go through the course and then we do a
Speaker 1: live Q and a session afterwards. Cool and trading View
Speaker 1: is just Jacob Canfield. I think trading View dot com
Speaker 1: slash you slash Jacob Canfield, um, and then yeah Twitter
Speaker 1: Jacob Canfield. Cool. All right, thanks so much, Jacob, appreciate
Speaker 1: you coming on. It's great talking to you. Thanks guys. Hey,
Speaker 1: if you like this episode of The Market Disruptors Podcast,
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