Ticker Tape Fever
A book I highly recommend is ‘The Laws of Human Nature’ by Robert Greene. Greene writes about the ‘Ticker Tape Fever’ which can still be applied today. He said that “during the run-up to the 1929 crash on Wall Street, many people became addicted to playing the stock market and this addiction had a physical component – the sound of the ticker tape that electronically registered each change in the stock’s price, indicated that something was happening. Someone was trading and making a fortune. Many felt drawn to the sound itself, that felt like the heartbeat of Wall Street.”
He goes on to say that “We no longer have the ticker tape. Instead, many of us have become addicted to the minute-by-minute news sites” like Twitter or modern-day interactive trading platforms with all the fancy features; flashing lights, instant news-feeds and ‘ping’ alerts of updates.
The whole idea of fast news about what is trending, accompanied by flashing prices or small ‘ping’ sounds – has its own narcotic effects and has been specifically designed as such to make you take action. You have been warned! “It makes us feel like we are connected to the very flow of life itself”. A sudden change in events in real-time followed by expert commentary often follows the same repeat. He continued by saying:
“The need to know instantly has a built-in momentum. Once we expect to have one bit of news quickly, we can never go back to the slower pace. In fact, we feel the need for more information, more quickly. Such impatience seems to spill over into other aspects of life. Our attention span decreases as well as our tolerance to any other obstacles in our path” Greene wrote.
He continues on saying that “We can all recognize our own impatience in life, but what we don’t recognise is the distorting effect it has on our thinking. The trends of the moment (short term cycles) in markets, business or politics are embedded within larger trends (long term cycles) that play out over the course of weeks and months.”
If we turn to the current market it sure is showing similar signs of the ‘Ticker Tape Fever’, as it continuously runs away. Don’t misinterpret the message here, I am not suggesting there is a top, though be aware of your psychological behaviors when executing trades.
Let’s take Bitcoin as our market of choice in this article. Many new traders have been exposed to the very strongly trending bull market since March 2020. It is not hard to understand the excitement in the market, assuming you bought back in March 2020 at $4,000, it would have seen an 8X return, yet in April it would have been 16X return. Do you think a few people had the ‘Ticker Tape Fever’ during this run?
There has been plenty of volatility and speculation, the fact is it is a strongly trending market and more reason to execute and follow your trading plan. The most recent drop in price in Bitcoin shows that the Gann methodology provides a bigger picture setup.
If you take the Highs Resistance Card on the All-Time High at $64,899.97, the 50% level is at $32,449.98. The market has recently fallen closely to this pivotal area.
If you study the low closely, you can see on the daily chart that the market has not closed below this level, yet it has found it to be supportive consecutively days in a row. This level has also been of importance back in January 2021, prior to the All-Time High even making a top.
As you remove the narcotic noise and news from your trading and follow your well-tested plan, you have the power over the markets. Gann suggested that the first higher swing bottom was the safest place to buy, so given we see some strength to the move you can consider rating the strength of the market.
In closing, Gann constantly reminds us about our human element when trading. He mentions throughout his text that we will never succeed in buying or selling when we hope the market is going up or down. He said,
“You will never succeed by making a trade because you fear the market is going up or down. Hope will ruin you because it is nothing more than wishful thinking and provides no basis for action. Fear will often save you if you act quickly when you see that you are wrong. “The fear of the market is the beginning of wisdom”.
Knowledge which you can only obtain by deep study will help you to make a success. The more you study past records the surer you are to be able to detect the trend of the future.
It’s Your Perception
Robert Steer