Don’t Bend The Charts

Ruben Orduz
3 min readJul 17, 2019

Over a year and a half ago, I wrote a series posts describing things I’ve learned throughout the years of equities, futures and options trading. The last installment of that series has become once again relevant once again now that the massive short-term rally of Bitcoin is all but done. However, in this post I want to highlight a common issue I see with traders who have lost money say or do, which I believe to be a coping mechanism but one that tends to make matters much worse: bending the charts.

BTC vs USD as of July 17th, 2019, showing a textbook double top pattern

In the last week or so the vast majority of “crypto trading chat” has been brimming with folks saying insane stuff like ‘strong bullish MACD convergence in the weekly and 4-hour chart’, ‘EMA crossover, $14K re-test within days’ and so on. At first you might assume these are ‘cryptobros’ in denial or paid shills spreading bad/false analysis to keep price from further downswing — and I’m sure there is some of that. However, I’ve seen the exact same behavior in the day-trading community years before ‘social media’ existed. So what’s going on here? So there will always be folks who jump way to late on a fizzling rally. Not unique to crypto trading, but crypto trading is, because of its inherent volatility, very brutal on latecomers. So what happens is that as folks begin to see mounting loses, they begin to fiddle with the charts to justify why they didn’t sell or why they removed their stop-loss orders. They usually begin by changing the scale until the chart matches their narrative. The daily looks bad? No problem, look at the weekly. Weekly still not looking great? Try a random time interval, like 7-hour candles or the 1-minute chart …

BTC vs USD as of July 17th, 2019 1-minute chart showing … something

And instead of focusing on the fact that they might be 30% in the red, they focus on how much it went up last hour. If they want to be even more disingenuous with themselves and others, they’ll bring the weekly, multi-year chart, with all sorts of arbitrary measures, trend-lines and meaningless indicators …

BTC vs USD as of July 17th, 2019 showing … whatever you want to show

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Ruben Orduz

Software, 3D Printing, product reviews, data, and all things AI/ML.