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Dip

HOW TO BUY THE DIP- What is considered the bottom for a coin? - How to identify the bottom? - What technical analysis tools to use? - What are the fundamental prerequisites for the bottom? What is the bottom for a crypto asset? The bottom is the lowest price level of a crypto asset, after which the price of this asset is expected to rise. The bottom is not always an absolute measure for the entire history of the existence of an asset, but can be calculated for a certain period: a year, a quarter or a month. How to identify the bottom Each trader has his own set of tools to determine when to buy an asset. Here are some of the most clearest signs to each of us: There is a protracted flat with the upper border breakdowns The movement occurs in a strong support zone and is accompanied by high volumes The order book contains big bid checks Good news on the market or the project The price is lower than the sale price (ICO, IEO, IDO etc.) The bottom we search for is not a new all-time bottom Protracted flat with the upper border breakout If you observe that for a long time: 2 weeks, 1 month, - the price is at the same level, while occasionally trying to “break out” up, that is, the resistance line is broken, then this is in 90% of cases - the impulse to the rapid growth of prices. However, if the breakout is more often than just the support level, then get ready to test a new bottom. Strong support zone and high side volumes Determine that there is a strong support zone at this level, that is, it met more than 3 times on the chart for the period under study and is supported by good horizontal volumes (Volume indicator). Display the VPVR (Volume Profile Visible Range) indicator on the same period on the screen and evaluate whether the maximum vertical volumes for the selected period are at this level. Big average checks If you observe volumes above average with a “small” candle body, then there are purchases at the same price for a large amount. This may indicate "big checks" or high market density. To confirm the existence of “big checks”, you can refer to the order book and make sure that there are real bid orders for large amounts. Fundamental prerequisites As an extra springboard from the bottom, news resources can: Issue positive analytics from experts on this asset Record the activity of major players - funds Report new technologies that have been released or are about to be released by the project Share the conditions for large investments in the project by large funds, etc. Price analysis for IDO, ICO and Private Sale If the project token or coin appeared on the market following one of the popular types of crowdfunding: ICO, IEO or IDO, the most popular one, then you need to compare the Public Sale price with the current price. If the current price is below the Public Sale price of the IDO, then you can put this in another checkbox on your checklist as a sign of a potential bottom. If the IDO price was lower, then this is not a bottom, there are still a large number of investors on the market who bought the coin at a lower price, which means they can sell it cheaper. Our bottom is not a new all-time bottom As we noted earlier, a support line is formed at the level of the potential bottom. If the price has never dropped so low in the history of the asset, then we cannot build a support zone, which means that the price can go even lower and find many new bottoms.
Education
by Crypto_robotics
Taking advantage of day gamblers and bagholdersDay Gambling & Bagholding makes up most of the activity in stocks I reckon. Not as big with Forex but still here. They allow people to optimise their returns. If markets were always fairly valued you couldn't really make more than 5% a year. And I say 5%, but to get there you'd have to not make any mistake. Perfection ==> 5%. No thanks! Day & swing gamblers, and bagholders, are here to transfer wealth. I describe how in this idea. I cut to the chase, I try keeping it as short as I can, but the subject does take a bit of explaining and I try to not skip important things. What do day gamblers do? - Exacerbate short term moves, move the price away from its natural longer term trend for example. - Hope to make money while paying to their brokers 25% of the money they risk as spread or commission. Roulette wheel takes 2.5%. What do bagholders do? - Sell out of their winners very quickly. The behavior of holding losers goes in pair with getting rid of winners. - And of course hold their losers. Bagholders that bought near the top do not add sell pressure to the pullback. - Bagholders also love to "buy the dip", when the price of something goes down, they buy. - Finally they sell at breakeven both when they hold a loser recovering, or when they are in the green and it pulls back. Can't really say for a fact this is what happened, but that's how I see it in a concrete example: FXCM says its traders average risk-to-reward is 1-to-0.57, on EURUSD in the period 2014-2015. That takes into account all those that have a high RR. FXCM typical gambler risk to rewards is probably closer to what I see on myfxbook, something ridiculous like 1-to-0.25. Even on Bitcoin that goes down 80% and up 8000% I can bet the typical gambler risk to reward is poor. People also "average down", sometimes they call it just that, sometimes they call it "dollar cost averaging". When they average down they increase their risk, all they care about is getting their money back. This is what we call a Martingale strategy. And yes, it is very stupid. And wipes out life savings once in a while. Academics polled people and found that in the general population - or maybe it was in a population of students - about 85% of people would rather take a small guaranteed win than a chance to get a much larger win (with of course odds multiplied by the amount were bigger than the flat win), and the exact same percentage would rather risk an enormous loss than simply take a loss. Prey ruminant mentality. They go for leaves (small wins), and they want to avoid losing at any cost because that means likely death. Compare this to a tiger that has a win ratio of 5 to 10% but gets huge meals providing several orders of magnitude the amount of calories he spent to hunt it, and they don't take silly risk, you'll never see a tiger jump in the violent river to go after prey. And this is why you have the famous: Wave A: A pullback with the majority still bullish (Mainstream media in the case of a bubble...). Bagholders that got in late are in complete denial. Bagholders that got in early enough often breakeven. Not an exact science, they do all kinds of things. I don't know many things that are 100% true in trading. Wave B: Bagholders are quite stressed out. You hear them scream things such as "DIAMOND HANDS", "LAST TIME THEY SAID", "THE BULL MARKET IS BACK". Price does not simply continue up in the presence of bagholders. It tops usually at 78.6% to 100% fibonacci retracement. Wave C: Most bagholders admit we are in a bear market. By the bottom of C, nearly everyone realizes (even the slow ones) that WE ARE IN A BEAR MARKET. Typical extensions are of 1, 1.618, 2, 2.618 (commodities). Wipes out the bagholders, in mainstream markets this is very often "the little guy" and they whine about manipulation (natural selection => great traders end up rich) It has always been like this and data shows they are the ones selling. But they still cry "manipulation" and whine and never learn. This is very typical. Not that entries matters that much, but avoiding getting sucked in "back to normal", and expecting lower prices, can help. I can point out plenty of other examples: Wave C has many names. Capitulation, "AAAAAAAAAAAH", make it stop god oh make it stop, this is BS, as well as when will it stop? When it stops is when it finds the majority of bagholders breaking point. Take a slow trend that went parabolic, the breaking point of the baggamblers will often be spread between the top and the start of the vertical move. This is not precise at all but to get an idea: In theory if 71% of the market is made up of bagholders and 71% of those "take their profit" we can estimate a retrace of 50% (71% of 71%). 90% of people are bagholders I think, but survival selection means the number will be lower in the markets. Day gamblers also have their trends and ABCS. No need to repeat what I already said about bagholders, much of the same applies to day day gamblers. So with much research, knowledge, practice, in theory one should be able to take advantage of day gamblers to get really good precise (enough) entries and exits. Thank you day gambler! Not only do they feed brokers ridiculous amounts (10 times the roulette wheel amount) allowing MY costs to go down, they also improve MY bottom in another way which is with better entries and exits. Thank you day gamblers! You truly are altruists. In this case... We can note that the price after bouncing between 1 and 1.618 dropped and bounced again on the "1" level. Bagholders breaking even? Rather than just buy at a vague price, it is in theory possible to use swing bagholders and day gamblers to have a very good entry. Does not always work. And no point being greedy here, it's already tight enough. Enter at a likely reversal price = better entry = better RR. Stop can be put way way far, further than the day gamblers capitulation, and even the swing bagholders, giving it many chances, and on a high timeframe it will still be a high payout for a small risk. The goal is not to look for perfection, but to progressively improve risk rewards thanks to others mediocrity and gambling mentality. On top, I repeat, of already all being at an advantage compared to decades ago, thanks to daygamblers taking the volatility in the teeth and cratering spread costs. Warren and me, deep down we do the same thing: In a concrete example, a trade I posted recently:
TVC:GOLDEducation
by MrRenev
A QUICK LESSON ON BEAR FLAGS! Hey guys, just wanted to post this quick educational analysis of what a bear flag looks like and how to calculate the measured move. Pretty straightforward from the chart, but if you have any questions feel free to comment. Also, this bear flag ties in with my other idea that is linked below in case you want to see how it plays along with the current situation. As always, this is for educational purposes only, please LIKE if this has helped you!
COINBASE:BTCUSDEducation
by CredibleCrypto