Disclosure: I hold Bitcoin and Ethereum ETP price tracker certificates on Nasdaq Nordic in so-called "ISK".
Larsson Line Indicator & Process Applied to Bitcoin BTC 2015-2020
CTO Larsson's "Larsson Line" indicator and process taught applied to Bitcoin BTC result in only 5 trades in the soon 5 years between Oct 2015 - Nov 2020.
- Entry: 19 Oct 2015 (gold flip) @ $261
- Exit: 24 Aug 2016 (blue flip) @ $579
- Entry: 30 Sept 2016 (gold flip) @ $603
- Exit: 26 Dec 2017 (parabola) @ 15,888 + 28 Feb 2018 (blue flip) @ 10988 => Avg $13,438
- Entry: 28 Mar 2019 (gold flip) @ $4,001
- Exit: 29 Jun 2019 @ $12,081 (parabola) + 25 Sep 2019 (blue flip) @ $8407 => Avg $10,244
- Entry: 25 Nov 2019 (TA channel bottom) & 21 Jan 2020 (Gold flip) @ average $7,870
- Exit 8 - 19 March 2020 2019 (Blue-flip, H&S) @ Avg $7,546.
- Entry: 4 May 2020 (Gold flip) @ $8,733
- Holding now at $15,500
=> Total 215x return as of Nov 6, 2020 with comparably lower risk.
As comparison, a HODL strategy to current price as of now would have given 59x, with full downsize exposure to 0.
The massive reduction in downside risk enables us to enter with more capital at the same risk exposure.
NOTE: This is illustrating a process. It is not a precise reflection of my own trading. I had not discovered Bitcoin in 2015. The indicator did not exist until 2018. The process is simplified here.
2018-2020 is forward testing and I posted them publicly. If you were following the field, you know that the indications above were often contrary to the public sentiment at the time.
There are many smart people who spent every day of those 5 years, morning, noon and night, plus alarms at 3am, trying to predict what this instrument will do next.
The obsession is easy to understand. The stakes are huge; life changing fortunes were created or lost in weeks. Sadly, obsessive trading is not helpful for most people. A few got it right. Most got it wrong and lost money along the way, especially those who came into the market during the late 2017 boom.
The HODL’ers (buy & never sell) did better than the traders, by staking everything on one big bet - that the Bitcoin narrative will hold true forever. So far the bet has worked, but the risk with a strategy like that is that *if* the narrative turn out wrong at some point (e.g. because something better comes along) that strategy will lose all the money again on the dip that never ends. The process taught here, would not, as the indicator would flip blue flip at some point on the way.
Unlike majority of people in this space, I have actually replaced many technologies where the proponents thought they were too big to fail. When I am pushing a tech, I am a juggernaut, but when I am investing, I stay humble to the competition and open to *all* possibilities.
The technique I teach largely avoids both the HODL risk, locking in the majority of gains in case the train stops at some point, while providing exposure to the big rides up. The technique also solves the risk for over-trading.
Looking again at the chart above, all it would have taken was to literally look at the color of the Larsson Line indicator:
Flipped to gold? Scale in longs
Flipped to blue? Scale out longs (and optionally scale in shorts).
A monkey could have done it, working 5 minutes per year, beating most human crypto traders and producing epic returns. So much for all the trading geniuses out there :-)
If then firing the monkey and adding a minimum of TA skill, based on principles from 1932, like taking home profits at the distinct broken parabola in late 2017 - early 2018, a near ideal result is produced.
I am using Bitcoin as an example here but the principle is effective on all assets that follow a certain set of key characteristics. FA is required to understand which assets.
Put together, the technique works on most cryptocurrencies, not only Bitcoin BTC.
Quite a few people actually sold the BTC top near 20k. It is what happened next that is interesting: Many of them bought back in and lost all the money again on the way down, and then sold the bottom of end-2018 / early-2019, just before it turned up again.
This is where a cold-blooded binary indicator becomes valuable. Making money in the markets is relatively easy, but keeping it is hard, and the Larsson Line indicator helps with that.
The principle behind the indicator is not new and not my invention. I started by just tweaking it a little to handle certain key edge cases better (that are common in crypto and tech stocks, but not in traditional assets).
But then I also did something else, almost by accident, which became the big discovery that made all the difference in my system:
I removed data, so that it only gives one piece of information in one of three states: GOLD, BLUE or NONE (gray). If Larsson Line indicator is blue, I can't buy, no matter how “once-in-a-lifetime opportunity” it seems. There are no ifs and buts, because all other information is hidden and I cannot justify out-of-system actions by some line that “almost” crosses, because the state is absolute and opaque.
For crypto assets, I have backtested the system all the way back to the birth of the industry, and for tech stocks, decades. However, I am a careful skeptic and I felt that backtesting is not enough, since I could conceivably have made the indicator fit the data. So I have now forward tested it for 2 years, on both crypto and technology stocks. Result: It is scarily accurate.
As a technology man, I know to appreciate simplicity over complexity.
The indicator is simply an implementation of the most famous saying of all trading, that our uber drivers and aunts know: “The trend is your friend, until the end, when it bends”.
Because the indicator is so accurate, it is also dangerous. If someone, or a piece of software, gives good trading advice 9 times in a row - and that is all you know because the actual process is hidden from view - the 10th time any sane person might mortgage their house to go all in. Then of course the 10th time it will be wrong. Such events can cause life long tragedies, impacting the person and everyone they love. I don't want to be responsible for that.
I'm happy to give you access to the indicator, but you need to take the driver's license first (the course and exercises) so that you understand how to use it in a context. Then, by being on the same page with a common set of principles, we can also exchange ideas and opportunities more efficiently going forward.
While all this sounds very positive, remember that just because something worked today, doesn’t mean it will work tomorrow. Any investment is risky. Any investment means a risk to lose all the money, full stop. Read the full disclaimer on the course site, but in short: Don’t invest money that you need!
The process is not the indicator. The indicator is simple. What is valuable is how to apply it - and the understanding of why.
The course costs money because I give something of great value, that costs me something to give: If more and more big investors start doing the same trade, eventually it will reach the point where it no longer works. Right now it’s an open field, but if you are going to jump on this train, don’t wait too long!
Pass the test, and you will get the indicator, but again, that is not the main value. I have played a role in creating the biggest technology ecosystem the world has ever seen. That gave me perspectives which are fairly unique among investors. It is those principles that are valuable, because they are not widely understood by other investors. The indicator is just an aid, like a good hammer, albeit a very good hammer.
In the course, I share my best insights from those 25 years of technology strategy and translate them into very practical hands-on guidelines to investing in cryptocurrencies and tech stocks. Then, combining those insights with the indicator, we become killers on the market.
I have consolidated the course to include both cryptocurrencies and tech stocks, for two reasons:
With minor tweaks, the same principles can be applied to both.
Many stocks will probably be represented by a crypto token rather than an SQL database entry in the future, hence it makes no sense to separate them.
(There are still differences that needs to be managed, and I cover those in the course.)
So don’t buy the course twice, you already get both scopes the first time!
The course is fun and light, on video, and takes only 5-10 minutes per day for 3 weeks, total 21 sessions.
I don’t intend to make this a mass-program. On the contrary, I want it to be a contained and a manageable size of people, since I want to interact and exchange ideas in the future. I am doing this mainly to expand my network to more sharp minds with common investment principles and ideas.
So: Get the free checklist, or roll up your sleeves and Start the course now. It literally takes 1 minute to start and you can complete today’s session in less than 10 minutes from now. So no excuse! :-)
In today’s world, you don’t need money to make money. What you need is a brain and ability to get things done. No money? There are other ways you can bring value back. Everything is possible. Write to me at [email protected] and we will find a way.
My personal humble Bitcoin investment is held in the form of custodial ETP Certificates by XBT Provider, traded on Nasdaq North (similar to Bakkt in the US) in so-called "ISK".
I do this for tax transparency reasons, but that also means that I have no physical Bitcoin, no private keys for you to hack or steal. So if you are a thief, save yourself the trouble. Instead I recommend stealing my car ;-)
P.S. If you have read all the way here, we have a lot in common. Then definitely write to me personally at e-mail [email protected] Cheers.
Thank you for being here. I hope to be of service to you. // Larsson