“Crypto currency for new economic system”
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Aside from Bitcoin, which continues to attract “investment” funds through ETFs, for those holding any of the numerous altcoins likely driven by “speculative” funds, the decision on when to sell (or exchange for other currencies) poses a question.

It’s not something to be done on a whim, unless one is a genius trader who can discern the right moment to sell based on market atmosphere.

This question might be unnecessary for those deeply invested in specific projects, the so-called HODLers, but for someone like me who holds a few cryptos bought on a whim, a clear indicator or guideline is needed.

This post stems from a period of uncertain settlements I’d call “pray for profits,” after which I sold currencies that later surged in value, leading to regrettable outcomes.

Moreover, I’ve added “probably” regarding BTC since I haven’t personally completed my technical analysis on it.

Criteria for deciding when to sell

・Set a target price in advance
・Settle when there’s a surge (or plunge)
・Use a trailing stop

These are commonly used methods, whether consciously or not.

Selling upon a surge (or selling in case of a drop, if shorting) seems to be the crudest method, but surprisingly, it appears to be the most utilized.

There’s also the method of “settle when profit reaches XX%,” but since it’s almost the same as setting a target price, I’ll omit it.

It seems many people practice partial settlements, not going all-in at once.

Trailing stop

After consideration, I’ve decided to combine the above methods: “Set a target price, partially take profits when reached, and apply a trailing stop for the rest.”

In other words, I’ll treat it the same as short-term FX trading.

A trailing stop, a common method in short-term FX trading, is described by OANDA Securities as “an order method that allows the stop order (stop-loss) to slide by a certain amount in a favorable direction as the price moves favorably.”
(Reference: OANDA Securities – What is a Trailing Stop? *in Japanese)

Though it says “by a certain amount,” it usually means cutting the position if it retraces by XX pips (points), though in my case, it’s often near the recent pivot point of a specific timeframe.

Thanks to this settlement method, there are rare occasions where I can ride (or keep riding) an unexpected wave… very rarely, though.

Partially taking profits upon reaching the target is meant to prepare for sudden market turns.

For example, in FX trading, targets are generally set near key resistance lines of higher timeframes, where the flow can suddenly change.

The idea that “what lies ahead is unknown” is very crucial in trading.

Altcoins where technical analysis does not apply

The effectiveness of technical analysis depends on the number of participants in the trade: it works when there are many, and doesn’t when there are few. This is natural since technical analysis is essentially about trends and statistics in group psychology.

As for how many participants are needed for technical analysis to start showing its effect, there is no clear answer, although there are rough estimates. However, it can be stated definitively that this is knowledge not necessary, especially for traders who are into short-term buying and selling.

This is because if there is a specific stock or currency one wants to trade, the first step is always to verify it individually.

By tracing the historical data of that asset and gathering statistics, one can decide whether trading based on technical analysis is feasible or not.

The subsection is titled “Altcoins Where Technical Analysis Does Not Apply,” but more accurately, it should be “Altcoins Where It’s Unclear If Technical Analysis Applies.”

This is because there’s too little past data to conduct any verification.

Therefore, no one would think to trade based on technical analysis, leading to the phrase “where technical analysis does not apply.”

In the case of buying and selling crypto, especially when selling, it settles down as mentioned earlier.

Incidentally, the general ambiguity of the basis for technical analysis is a factor disliked by fundamentalists, hence it being derogatorily referred to as “voodoo trading.”

As someone who prioritizes chart patterns, I believe its utility is evident once verified.

Fundamentals and technicals

Fundamental Analysis:
“A method that uses basic indicators such as a country’s economy or a company’s finances to predict the future movement of stock prices or exchange rates…”

Technical Analysis:
“A method that predicts the future movement of stock prices or exchange rates from the shapes of charts based on past movements…”
(Reference: Daiwa Securities *in Japanese)

This is written on the website of Daiwa Securities.

I had a vague understanding that technical analysis was fixated on chart shapes, while fundamental analysis focused on data other than charts. Looking into it this time, it seems my understanding was broadly correct.

Well, the definitions don’t matter much, but what kind of data is emphasized when trading is quite an important aspect in investing and speculating.

Technical analysis is undoubtedly more accessible. Fundamental analysis is so extensive and complex, almost infinite in what needs to be learned, that it could be classified as a branch of economics.

That’s probably why many investment schools and fraudulent investment gurus prefer to teach technical analysis.

Like many others, I started trading thinking I could do chart analysis too, but reading economic news has become a daily routine.

Even as someone who leans towards technical analysis, I thought it wouldn’t hurt to have a rough idea of what’s happening in the field of investment I’m engaging in. However, I also feel inundated with information that I’d have been better off not knowing: hype, positions, misinformation, simple mistakes, misunderstandings, etc.

In the world of investment, where greed clashes with greed, I guess this is to be expected.