A year ago, I never thought I’d say the words “buy bitcoin.” I’ve never understood the problem bitcoin solves.
I admit my understanding is limited. It uses a blockchain, which seems like a more complex version of a Google doc spreadsheet. That blockchain lets me spend money electronically, which sounds like a credit card. Bitcoin also provides anonymity — except when it doesn’t. And the FBI can seize bitcoin quickly.
Despite the many shortcomings of bitcoin and cryptocurrencies, I still follow the markets. I’m a trader that will trade anything with a bid.
Bitcoin is a great market to trade. The chart below shows bitcoin‘s Greed Gauge, a new indicator I developed.
Bitcoin Traders Get Greedy
Source: Optuma.
Greed is the underlying force behind all uptrends. Yet few indicators track the level of greed in a market.
The CNN Fear and Greed Index is a popular tool. But it doesn’t give clear trade signals.
I focused on measuring greed and converting it into an indicator with precise buy and sell signals.
My Greed Gauge Is Simple
The results are at the bottom of the chart.
Like my colleague Adam O’Dell, I like the simplicity of green being bullish.
My Greed Gauge isolates how energized buyers are. When they are excited by the market, the Greed Gauge turns green. As traders become sellers, it turns red.
It’s a simple idea that works well in any market. The Greed Gauge can be applied to individual stocks or ETFs. It can also be applied to broad market averages. I follow it on commodities like oil and gold. It also applies to foreign exchange markets and cryptocurrencies.
Why Bitcoin Is a Greedy Buy Now
Over the past five years, bitcoin’s price has gone from about $1,900 to almost $30,000. Over that same time, owning bitcoin only when the Greed Gauge was on a buy signal would have allowed $1,900 to grow to $34,125.
The Greed Gauge sidestepped the bear markets and reduced risk by half. By focusing on greed, we would have captured all of the upside and avoided the worst of the losses.
I’ll talk more about the Greed Gauge next week.
But if you’re ready to learn more, I urge you to sign up for “Greed Gauge Revealed” now.
In my upcoming presentation, I will show you how I can use my newest indicator to watch every stock in the S&P 500 to see where investors are getting greedy at any moment.
Need proof? My Greed Gauge has tripled the S&P 500 over the last two decades.
I’ll have the full details in my exclusive presentation on May 31 at 8 p.m. Eastern.
Click here now to secure your spot.
Michael Carr is the editor of True Options Masters, One Trade, Peak Velocity Trader and Precision Profits. He teaches technical analysis and quantitative technical analysis at the New York Institute of Finance. Follow him on Twitter @MichaelCarrGuru.