Crypto traders who think they can make accurately price predictions are delusional, says veteran trader Peter Brandt.
“Anyone that looks at the charts and tries to tell you where anything is going is actually just kind of fooling themselves,” the 79-year-old tells Magazine.
“There are a lot of people who will argue with me, of course,” Brandt laughs.
That’s not what the chart-lovers on X wannahear after years of doodling lines, and parsing reverse Bart Simpsons and Fibonacci spirals, but Brandt says the only real use of a price chart is seeing where the price has been and where it’s at now.
“In most cases, you can say, probabilistically, a market will pursue the same trend it’s been with some volatility within a range,” he explains.
So the best Brandt or anyone can do with a chart is spot potential asymmetric risks. “Give me a point where I can risk $1 and possibly make four, then I don’t care whether I’m only right half the time or not,” he says.
Brandt’s strong opinions rub some the wrong way, but there’s no denying his track record of success.
He’s been around so long, many of Brandt’s 803,000 X followers were still decades away from being born when he started out trading commodities in 1975.
Over the years since then, Brandt has earned a reputation as one of the most respected chartists in finance. Economist and author Barry Ritholtz even named him among the 30 most influential people in the finance industry.
Who is Peter Brandt?
Surprisingly, Brandt didn’t even study finance. He graduated with a journalism degree from the University of Minnesota in 1970 and began his career in advertising, working with major clients like McDonald’s. He was even around when Ronald McDonald was created.
A neighbor in the soybean trading business introduced him to the markets, and a few years later, Brandt left behind his promising advertising career to start placing bets on corn.
Yep… Brandt’s been trading corn since the ‘70s.
Thanks to unpredictable weather and constantly changing agricultural policies, the volatility in that market made it surprisingly profitable.
He later moved on to handling institutional accounts before founding his own proprietary trading firm, Factor Trading Co., which he still operates today. Brandt’s book, Diary of a Professional Commodity Trader, became Amazon’s No. 1 trading book for 27 weeks in 2011.
Raoul Pal’s phone call was Peter Brandt’s gateway to crypto
Five years after topping the Amazon charts with his trading book, Real Vision CEO Raoul Pal sent him a Bitcoin chart in May 2016, when BTC was trading around $450. The pattern immediately caught Brandt’s eye.
“Raoul sent me a chart saying, Peter, I really appreciate your opinion. What do you think of this chart? I looked at this chart of Bitcoin, I went, Holy, oh, this, this, this thing is sweet.”
Brandt immediately called Pal to ask how to buy Bitcoin, admitting he had no clue where to start.
It turned out to be an easy 2X for Brandt, who sold his Bitcoin for around $1,000 in December of that same year.
“I thought, man, I’m a genius,” Brandt says.
Since then, Brandt’s been calling the tops and bottoms of Bitcoin and other cryptocurrencies, sometimes to the delight, and other times to the frustration, of people in the crypto industry.
Just under two years after that phone call with Pal, in December 2017, Brandt correctly called the top of Bitcoin “within a day” and predicted an 80% correction, a forecast that eventuated over the following 12 months.
“I’ll take credit for that call, but I’ll take credit for the bad calls too, because I’m making those bad calls,” he says.
Brandt admits that some of his dramatic predictions are more playful than serious. In June, he floated the idea of a 75% Bitcoin crash, just a month before it hit a new high of $123,100.
Looking back, he says he could probably do a better job of clarifying his sarcastic tone in written posts.
“I guess I need to learn. I wish there were an emoji that represented tongue in cheek,” Brandt says. “I mean, maybe on some I need to put four winks.”
In Brandt’s defense, it wasn’t a call with conviction; it was just a thought he threw out there.
“Is Bitcoin $BTC following its 2022 script and setting up for a 75% correction? Doesn’t hurt to ask this, does it?” he said on June 10.
But Brandt doubts we’ll see massive crashes in the future.
“I don’t think the age of Bitcoin has become institutionalized and accepted to the point where I don’t think we see these corrections anymore,” he says.
But with half a century of trading, starting three decades before the 2008 Global Financial Crisis, Brandt…
cointelegraph.com