Lecture Notes: Strength vs. Greed in Trading

Key Concepts

Strength vs. Greed in Market Moves

• Backside of the Leg
  • Stronger part of the leg
  • Represents larger reactions in the market
  • Protects a larger vertical range of prices
  • Protects a larger horizontal range of time
• Frontside of the Leg
  • Greedier part of the leg
  • Represents smaller reactions and shorter periods
  • Typically smaller price range
  • Less time in the move compared to back

Strength Levels

• Strong reactions due to their fundamental position in the chart
• Supports the entirety of the chart; long-term hold
• Generates larger bounces

Greedy Levels

• Represents the greediest price in the move
• Requires a longer time to establish and break trends
• Potential for higher returns if held over time

Practical Example

• Weekly and Daily Marking
  • Marking weekly and daily gives proper reaction levels
  • Example: 20% bounce off the backside of the leg

Strength Vs. Greed in Real Scenarios

• Market has strong bounces off strong leg levels
• Greed levels deliver the best price but need time to manifest
• Comparison between immediate and prolonged market movements

Trends and Cycles

• Accumulation Cycles
  • Example: Accumulation in Altcoins
  • Cycles and trends breaking for move analysis
• Trend Rejections
  • Trend lines typically reject the price movement (19 out of 20 times)
  • Best entries often align with trend support

Application in Trading

• Identifying Strong Levels
  • Typically larger, high-reaction bounces
  • Tend to be crucial in holding the market
• Identifying Greedy Levels
  • Best price with greater potential if sustained over time

Closing Review

• Strength Levels: Instant significant bounces, strong hold sections of moves
• Greedy Levels: Require patience with stronger eventual returns
• Trends: Important for determining potential rejections and support levels

Takeaways

• Understand the difference between front and backside of leg in market charting
• Recognize how strong levels and greedy levels affect market strategies
• Utilize trend lines carefully as they generally signify movement rejections