Do the ‘Better’ indicators work on Bitcoin? Well, yes and no.
Trading indicators are only as good as the data you feed them. Emini-Watch
And that’s the problem. Bitcoin data is all over the place and there is no single unified data feed. As of November 2020 there are (at least) 28 exchanges where Bitcoin trades. On the plus side, the activity is becoming more concentrated in fewer exchanges and arbitrageurs are forcing the “spreads” between exchanges lower.
But we are still left with a data problem.
The CME (that now has a Bitcoin futures contract) has made an attempt at creating a unified Bitcoin data feed. They have taken the data feed from 5 major exchanges and aggregated them together to create the Bitcoin Real-Time Index. However, this index does not include volume data, only the number of trades. TradeStation also has a Bitcoin data feed (listed under their Forex symbols) but I can’t find any details about how it’s constructed.
So we have 3 choices for Bitcoin chart data (on TradeStation):
- Bitcoin (symbol: BTCUSD)
- Bitcoin Futures (symbol: @BTC)
- Bitcoin Real-Time Index (symbol: $BRTI)
And we also need 3 different “Format Symbol” settings:
- Bitcoin: 1440 minute bars and volume = Trade Volume
- Bitcoin Futures: daily chart
- Bitcoin Real-Time Index: 1440 minute bars and volume = Tick Count
And here’s an image of what those TradeStation “Format Symbol” settings look like for the Bitcoin Real-Time Index ($BRTI).
That’s a 1440 minute chart with Tick Count used for volume. I’ve tested using Natural Hours or Session Hours for bar building and it doesn’t seem to matter which setting you use.
The biggest difference we’re going to see between the different Bitcoin charts is in the volume data – and that impacts the Better Momentum and Better Pro Am indicators. So here are the 3 charts side-by-side with Better Momentum below the price bars and Better Pro Am on the price bars themselves.
And as you can see there are significant differences between all 3 charts:
- The BTCUSD chart caught the March 2020 low with Exhaustion Volume and blue Professional bars forming a “V” reversal
- The @BTC chart caught the September 2020 take-off just above $10,000 again with Exhaustion Volume and blue Professional bars forming a “V” reversal, and
- The $BRTI chart caught the August “false” break-out that was being led by the Amateurs causing RAMBO patterns and unstable Exhaustion Volume
We would expect the Bitcoin price to be more similar between the different Bitcoin data feeds – and so the Better Sine Wave indicator signals should match. But bear in mind that @BTC is a futures contract and that trades at a premium to the cash market or index – often as much as $200!
So here are the 3 charts side-by-side with Better Sine Wave cycles below the price bars and Better Sine Wave support and resistance lines on the price bars themselves.
Again, there are differences between all 3 charts but maybe not as significant as the volume signals. Unfortunately, no one chart is ideal. So my recommendation, if you’re a Crypto trader, is to use all three Bitcoin data feeds and follow all three charts.
I hope you found this article on Bitcoin and the ‘Better’ indicators helpful.