Bitcoin (Gann Fan) Tutorial BasicsGann fans are a form of technical analysis based on the idea that the market is geometric and cyclical in nature. A Gann fan consists of a series of lines called Gann angles. These angles are superimposed over a price chart to show potential support and resistance levels.
🌀 The Gann Fan was developed by W.D. Gann.
🌀The Gann Fan is a series of angled lines. The user selects the starting point and the lines extend out into the future.
🌀Gann believed the 45-degree angle to be most important, but the Gann Fan also draws angles at 82.5, 75, 71.25, 63.75, 26.25, 18.75, 15, and 7.5 degrees.
🌀The Fan is started at a low or high point. The resulting lines show areas of potential future support and resistance.
The Difference Between a Gann Fan and Trendlines
The Gann Fan is a series of lines drawn at specific angles. The 45-degree line should extend out 45-degrees from the starting point. A hand-drawn trendline connects a swing low to a swing low, or a swing high to swing high, and then extends out the right. The trendline is matched to recent price action and is not drawn at a specific angle.
Step By Step - Application;
Gann is a popular tool & has many resources available online - This breakdown was just a quick look into how to apply them.
Please feel free to send questions below.
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Mayfairmoney
Indicators Vs Price action - or both?Many new traders face a magnitude of problems early in their trading journey. One of the biggest dilemmas is caused by the vast amount of indicators available. There are the free basic indicators like RSI, MACD, Bolli Bands and the list goes on. Then you have custom indicators - Paid for, free trails - each offering their own edge.
The issue is not what they can or can't do - it's more bout how they are used, even why they are used.
I put together the tutorial mostly to show what each of the basic & some custom indicators show on the same chart - at the same time.
The idea was to highlight what they can spot and compare it side by side with price action. Also using still simple methods but not automatically drawn indicators such as Elliott and Wyckoff Schematics.
Over the last 20 years, I have collected around 14Gb's worth of PDF's, MT4 indicators, expert advisors, BOTS n all sorts. I play with them and revert back to the old faithful.
PRICE
Take a look at this first chart. A simple RSI indicator that can help identify a shift in the trend.
This is not a strategy - it's a simple "spot the move"
This type of basic understanding of what a lagging indicator is telling you can actually be beneficial. But not necessary.
The next chart shows a simple MACD & this time it can help identify the major (3) move of an Elliott wave move.
From here - take a look at simple Bollinger Bands.
What you will notice above, is that the Mean of the bands matches the Wyckoff Average price. Obviously oscillating a little as the settings are off the shelf. But you get the point.
If we shift to a Parabolic SAR - you can see within the Wyckoff Range of Distribution, the SAR is narrowing almost making a type of sideways Christmas tree.
Below we have a basic Stochastic - this where I have the yellow line shows newfound weakness in the trend.
Elliott Theory
Move away from indicators and you can see an Elliott wave which is actually a 5 wave move within the 2-3 wave move on a bigger timeframe.
This move can be measured and sometimes forecasted by using simple Fibonacci tools - you will see from this chart below, the move was straight to the 50-618 range; sometimes referred to as the "Golden Zone" .
**Measure taken from the swing X to 1 of the impulsive move.**
What goes up, must come down. This move was then followed by a simple A,B,C formation in accordance with the Elliott Theory.
Jump forward a little and using Fibonacci again.
What you can see here, is that the Fibs from X - 5 (Major move) is now heading down to the 61.8% level.
Other Tools
Heiken Ashi - is another popular tool. Although it's replacing regular candles, bars or lines it basically takes an average and cuts out the noise. (this is not to educate as to how each indicator works) more highlighting how they can be used in simple terms.
What you will notice in the chart above - Is again, the level of respect the Average Price receives within the range. Without the noise.
Custom Indicators
As I mentioned above, there are thousands of indicators that come in all shapes, sizes and colors. As well as price ranges from free to thousands of dollars a month.
Here's an example of how a custom indicator can be built to help traders identify key levels or potential shifts in the market.
This indicator looks for the Mean Reversion as well as highlights a curved regression. As price is always trying to move towards its average you can calculate levels of potential reversals based on a load of tools including zones, pivots, or moving avergae touches for example. Again too many to list.
This next indicator shows two key areas of interest. Imbalance candles and Order Block levels.
There are methods to paint supply and demand zones.
These types of levels can be spotted (with experience) on naked price charts.
Another tool could be used to measure the strength of a currency or stock. For this, we have a simple Strength index calculation.
Showing the shift of power from AUD to USD during the range phase.
Conclusion
Regardless of the tools and indicators, bots n algo's - Price is still king of the market and all else is designed to measure it.
As I said, this post is not to teach anyone how to select or use an indicator - but to highlight how some of these things fit into painting or at least helping to paint a path that price will travel.
I hope this helps - please feel free to comment and question below.
Safe Trading!
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Crypto Correlation - Etherium - BitcoinI posted an idea yesterday on the Accumulation phase of Bitcoin currently. I have been asked by several people in the post and in DM's about Etherium, Litecoin and other alt coins.
Thought it be easier to make a post.
As professional traders enter the crypto market - it's clear to see a shift in the behavior of Bitcoin and its merry men.
If you zoom out and look at the daily charts or bigger, it's clear to see the dips and peaks at the same times - meaning BTC is a good indication of the rest of the coins...
Why? - Bitcoin is mainly a store of value, it's making entry into other alt coins easier - it's more trusted (i would like to say it's more understood, unfortunately not the case). You have several types of crypto players:
- Early adopters (usually tech guys n Gals) who believe in the concept and want to change conventional thinking.
- Consultants (usaully ex KPMG, PWC) will call themselves experts, charge the early adopters thousands in fees for their business acumen & adding no real value.
- un-sophisticated investors; wanting to invest in the next facebook.
- Friends of early adaptors who now see $$$ signs.
- Tech investors who see more than a trade setup.
- Savvy investors who want control (these guys take it to "investment instrument level"
- Then the late adapters - who want to play, make a few dollars, and hope to ride the bull wave to the moon.
- Everyone else.
The issue is the more institutional traction, the less likely of a full out bull run - investors know how to play the game to sucker the other parties into making more money for themselves in the process. So we will now start to see behavior more like Gold, Oil, FX - instead of the tech boom bull runs.
As traders, not investors - you need to adapt. If you are not looking for a drawdown, you need to buy the dips. Whereas an investor would pile in the money and come back in 5 years.
As far as Etherium, Bitcoin or alt coins. Think of it like this. Bitcoin is kind of what the USD is to currency and commodities. An easier way of putting it is "Bitcoin is the windows of the operating system space" - Ethereum is like Linux - it can be used for projects, not everyone understands it or wants to. It has its place and that has value in its own right.
Feel free to comment below. Enjoy the rest of the weekend!
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Elliott -Wyckoff Breakdown (2) of (2)Although it's a crazy time with the whole world in Pandemic mode due to Covid - you can still see the Wyckoff theory at work, by looking at these principles near or in key levels you can see the advantage of waiting to join smart money moves.
As a mentor, I often get emails and messages asking should I long this or short that. And usually, as soon as you see the chart, it's obvious that the retail game is being played. And we wonder why over 70% of retail traders lose money.
Looking for confluence and then trading with confidence into or from key zones makes more sense than trading support and resistance levels which have been open to a subjective view. Chat rooms, trade ideas, signals, indicators - all move the trader away from the real structural significance.
Again like Elliott - there are plenty of educational videos, PDFs, and books on Wyckoff and his theory. Some good books include "How I trade and invest in stocks and bonds" by Richard D Wyckoff and another good Wyckoff book is "The Wyckoff methodology in-depth" by Ruben Villahermosa Chaves.
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Elliott - Wyckoff Breakdown (1) of (2)After spending now 21 years trading, It's clear to see that a lot of the old ways work just as well as when I was first introduced to trading. There's a reason names like Wyckoff & Elliott are still popular terminology in the trading communities. Even Fibonacci now centuries old.
I wanted to share a quick top-down breakdown of the market setup using simple but effective tools.
Starting off - I have software called Advanced Get - this paints the Elliott wave patterns on the chart. There are plenty of tutorials available on the exact workings of Elliott wave theory. This is not the point here, it's just to illustrate the concept of how to use them in confluence. There are also some great books out there that go into a lot of detail such as Profits in the stock market and How to Identify High-Profit Elliott Wave trades in Real Time.
Once you have identified the wave levels (even the current wave) you can measure using Fibonacci retracements & extension tools to get areas of interest as I like to call them. (You often find these to also fall into categories of supply/demand and order block levels, imbalance. So they act like a magnet pulling the price. Bear in mind the two charts above are monthly and weekly.
After identifying major trends on the monthly and stepping down to a weekly view - you can now focus on finding these key levels before dropping to the daily.
At this point - personally, I look at how close the move is to the weekly levels and then look at COT along with sentiment data to get a feel for the "great professional" - strong hands and compare it to the weak hands, being retail sentiment. It is no secret that on most broker platforms over 70% (being generous) of retail traders lose money. Smart money is playing the game and throwing the crumbs.
What you might see is one of a few likely scenarios' ;-
1) COT data shows more longs than shorts (assume this NZDUSD example) - which means the move to level 3 wave is more probable.
2) Sentiment shows retail thinking the trend is exhausted and already for the drop at the time of writing 62% of IG sentiment is short.
other info could show that some net long positions have been closed (1) meaning the drop is coming and the wave 3-4 pullback on the weekly is about to take place.
looking at key levels, it's clear to see the (3) high on the weekly is in confluence with a major supply zone.
I will post part two of this idea later today.
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
