The Double Bottom Reversal is a bullish reversal pattern!The Double Bottom Reversal is a bullish reversal pattern typically found on bar charts, line charts, and candlestick charts. As its name implies, the pattern is made up of two consecutive troughs that are roughly equal, with a moderate peak in-between.
Although there can be variations, the classic Double Bottom Reversal usually marks an intermediate or long-term change in trend. Many potential Double Bottom Reversals can form along the way down, but until key resistance is broken, a reversal cannot be confirmed. To help clarify, we will look at the key points in the formation and then walk through an example.
Prior Trend: With any reversal pattern, there must be an existing trend to reverse. In the case of the Double Bottom Reversal, a significant downtrend of several months should be in place.
First Trough: The first trough should mark the lowest point of the current trend. As such, the first trough is fairly normal in appearance and the downtrend remains firmly in place.
Peak: After the first trough, an advance takes place that typically ranges from 10 to 20%. Volume on the advance from the first trough is usually inconsequential, but an increase could signal early accumulation. The high of the peak is sometimes rounded or drawn out a bit from the hesitation to go back down. This hesitation indicates that demand is increasing, but still not strong enough for a breakout.
Second Trough: The decline off of the reaction high usually occurs with low volume and meets support from the previous low. Support from the previous low should be expected. Even after establishing support, only the possibility of a Double Bottom Reversal exists, and it still needs to be confirmed. The time period between troughs can vary from a few weeks to many months, with the norm being 1-3 months. While exact troughs are preferable, there is some room to maneuver and usually, a trough within 3% of the previous is considered valid.
Advance from Trough: Volume is more important for the Double Bottom Reversal than the double top . There should clear evidence that volume and buying pressure are accelerating during the advance off of the second trough. An accelerated ascent, perhaps marked with a gap or two, also indicates a potential change in sentiment.
Resistance Break: Even after trading up to resistance, the double top and trend reversal are still not complete. Breaking resistance from the highest point between the troughs completes the Double Bottom Reversal. This too should occur with an increase in volume and/or an accelerated ascent.
Resistance Turned Support: Broken resistance becomes potential support and there is sometimes a test of this newfound support level with the first correction. Such a test can offer a second chance to close a short position or initiate a long.
Price Target: The distance from the resistance breakout to trough lows can be added on top of the resistance break to estimate a target. This would imply that the bigger the formation is, the larger the potential advance.
It is important to remember that the Double Bottom Reversal is an intermediate to long-term reversal pattern that will not form in a few days. Even though formation in a few weeks is possible, it is preferable to have at least 4 weeks between lows. Bottoms usually take longer than tops to form and patience can often be a virtue. Give the pattern time to develop and look for the proper clues. The advance off of the first trough should be 10-20%. The second trough should form a low within 3% of the previous low and volume on the ensuing advance should increase. Volume indicators such as Chaikin Money Flow , OBV and Accumulation/Distribution can be used to look for signs of buying pressure. Just as with the double top , it is paramount to wait for the resistance breakout. The formation is not complete until the previous reaction high is taken out.
Bitcoinforecast
Bitcoin GPS where are we ? Full PictureHere's the bigger picture just in case those who saw my last posting couldn't work it out . MACD study of two double tops. Chart is looking a bit wrecked, but the only way I could show full MACD study. So far it looks to be working out well. I've also updated some of my earlier yellow lines to better reflect accuracy etc... Hope the visual is self-explanatory.
Model of Economic BubblesA replicated model of " Economic Bubbles " by Jean-Paul Rodrigue which I overlaid onto the BTCUSD -13.83% chart.
Terrifying resemblance considering this this model was created in 2008.
What stage do you believe we are in?
I do not believe this is the end of crypto.
However, I do advise everyone to keep an open mind, and to trade carefully.
I wish you all the best of luck.
Source:
upload.wikimedia.org
BTC Little Explanation from mass psychologyThe end is near!
But it will not be, what many say about a massive devaluation ... No! It is impossible, the behavior of "rational" individuals will always make their value remain high. Now, why do I say the end is near? Pitifully Bitcoin, is no longer a change merchandise and is now becoming a hoarding merchandise.
I give you an example; Today you have a bitcoin, would you buy something with that bitcoin? Knowing tomorrow that bitcoin cost more?
Human psychology shows us that when we feel affection towards something of great value, it is hard for us to leave it. That is going to happen with all the Bitcoin holders at the moment.
Now what happens if the day of tomorrow Bitcoin falls to 5000? Well, nothing ... There will be people who buy bitcoins, increasing their value once more. Giving back the value. It's like a spring Jjejej
Now I consider that the bitcoin is reaching its last period of rise and later the value remained static. Something like a frozen coin.
There is no government that freezes the currency, but the society itself will freeze it at a "x" price. Its fluctuations will be slight.
What can we do ? Nothing, look at other currencies that are just being born or growing.
We can not predict where the price will go currently because we do not have enough information (cycles, waves), it's something totally new. I do not consider it a bubble as many say, but we can not compare with GOLD in the future either.
BTC/USD - Why Most People Lose In Trading – The Traders MindsetHello Traders,
In this article, we want to talk about some educational stuff because we see so many people losing in trading.
How many months or even years are you in trading? 2 months? 6 months? Or even a year or more? Most of you out there who read this article might try to find out why they make the one-day profits and the other day lose it all again. We did a lot of research on this topic and wanted to provide you all the reasons why YOU still not made it so far in trading.
Let us start.
For this question, we want to bend a bow and try to start at the foundation why people start to trade. Most of you out there started with trading for a simple reason: to make tons of money. The prerequisites are low to none! You simply need to open a trading account watch a few YouTube Videos on trading and et voilà you are a trader, right? Well if that would be the case, we would all lay right now at the Bahamans with a Whiskey and relax life as a rich person but trading is so much more.
Unfortunately, when money comes into play as a tool to make even more money, then usually psychological factors and barriers come into play and glare us to make bad decisions. We want to share with you now some facts that might interest you and where you possibly see yourself as well.
Did you ever heard about the 90-90-90 rule? – Well, this rule is often concealed by Brokers when you open an account. But it is true! 90% of the traders lose 90% of their capital within 90 days! – It sounds crazy, right? Like 90% of all traders lose almost all their capital in this short time!
This cannot be true, right? – Unfortunately, it is. Now let us explain why. Well, the objective here in the financial market is clearly defined. – Achieving profits. So, every winner faces a loser on the other side! We need to understand that first in terms of understanding the profits and losses!
Basically, the truth is that we will have to deal with losses sooner or later again and again. And that is the problem for new traders! An unsuccessful trader can NOT deal with losses! They tend to exaggerate with their emotions once they face a loss.
Why is it like this? – Well, by losing money you have earned so hard, we become emotional. Simply, a rising account puts us in joy and euphoria. Whereas a falling account will put us in scare.
If this case applies to you, you need to learn and apply the ability to control your emotions and concentrate on the substance. This will bring us into an advantageous position.
We simply want to provide you an example, which you might be reflected with:
Our risk behavior changes depending on our profit series. For instance, you win 3 or even 4 trades in a row and booked, let’s say, 2 percent from each trade, you made an overall profit of 6-8%. Then our subconscious mind starts to think riskier because we suddenly think that things going well and seems to be quite simple. On the other hand, a series of losses will paralyze and confuse us. We try to get away from these circumstances as quickly as possible without thinking rationally. We become impatient and in the end, lose our objectivity! And this frame of mind could fast become a doom loop!
You rather need to think like a professional! That is:
Preparing for the market
Preparation for the trade
Have rules and strategies that work
Know that the market is ALWAYS right
Never gamble! We are NOT in a casino. This knowledge will give us a huge trading advantage!
Obviously, there is a lot more to talk about but this will give you a short introduction of the right traders mindest.
Hope that helps.
Cheers
BTC/USD - Why Traders Lose In Trading Part 2 -Hello Traders,
As you guys liked the previous educational part so much we decided to continue with that topic.
In picture 1, you can see the interdependence between fear and greed! These characteristics harm us to make good trading decisions and stay calm!
This fact is purely based on behaviour finance! This matter of fact is not only within the trader, it more lays in the market and we need to understand it. Only then we will understand the fact that emotions can control us in negative ways!
Therefore, it is so important to understand picture 2! Only then, we can act in any market situation calm and without any negative emotions! Whereas most of the people simply follow the path of the doom loop described in the graphic above, we need to think like first like a professional!
This knowledge will give us a huge advantage! We want to show you the market behaviour. With this knowledge, we then can implement it in our trading! The lack of risk and money management hinder the trader to ever be successful. The mistake you make is simple. You have the wrong mindset. Either you act greedy or fearful. This basically leads us to the next point: Your way of thinking is too short term!
You concentrate just on your current losses and wins without looking at the whole! You want profits NOW! Not later! This is one of the most emotional problems which you face!
You need to think long-term! Not looking at one trade! You need to judge your trading system over time and not after every single trade. However, most of the people do this! They question themselves if the trading strategy or approach they use is profitable! Of course, you need the right knowledge to build a profitable strategy. But to this later.
Basically, they end up falling in the doom loop again because they get too emotional with every single trade! More they hope on every loser to become a winner and cut every winner in the fear to become a loser!
The emotional behaviour is often caused by two factors:
• Wrong trading approach
• Short term thinking due to impatience
These two factors causing tremendous effects on your emotions!
Now let us explain why. When a trader starts, as you might refer this to yourself as well, we dream to become profitable day trader right! Why? – Because the profits you can make within ONE day are huge, right? This attracts us! We want fast and huge profits! However, after you started with day trading you fast recognize that it will cause more mischief within yourself than it brings the expected good things! Let us take a minute here and explain a fact, which most of you out there probably underestimate or not even think about. What is day trading? – Well, we will skip all the basic knowledge about day trading and concentrate right at the beginning on the interesting facts. The problem with day trading itself lays in the basics. You need to understand the mechanism of day trading. As you already know, you will always trade against someone else. Or in other words, if you are holding a buy EUR/USD position, someone else will hold the exact counter position. So, a sell EUR/USD.
This makes the whole story interesting because you will always have a competition! And as a trader you need to think smart who is your counterparty and what information they have. Only then you can measure if you have any chance or not in the long term! So, let us compare the different trading styles in picture 3.
We trade against computer based algorithms! This makes the story way different now! We need to understand that the execution time and the reaction is way faster than we can even imagine.
Additionally, emotions are also not present due to the use of computers. Now there is not only the emotions we have against us, but also the fact of the executions.
If you want to become successful, you first need to control your emotions and trade disciplined your trading system. However on a time horizon this thing makes the story very difficult.
This Is The EndFew people realize it, but the cryptocurrency markets have already topped.
Bitcoin is currently bouncing back to the $4,500 area, at which point big money bottom accumulators, who were taken by surprise by the recent aggressive dumps, will proceed to exit their positions by selling Bitcoin as well as other cryptocurrencies such as Ethereum.
This will create a blatantly visible double top on the daily and weekly. Bitcoin's price will then proceed to decline by around 80% over the next year or so, powered by profit-taking, miner dumps, government crackdowns, exchange closures, and panic selling by hundreds of thousands of schmucks who bought in at the top of the bubble. My target is $999 or lower by the end of next year.
I've been in bitcoin since 2012. It's been an incredible ride. But at this point, there's nothing powering price anymore beyond the expectation of higher prices by junk/dumb money speculators. This fundamentally defines the top of a speculative bubble.
This is the exact same market sentiment that was around during the 2013 run-up from $100 to $1200 and subsequent bubble pop. It was simply impossible for many market players to imagine that Bitcoin prices would plummet. This is a severe psychological limitation that's especially pronounced in the cryptocurrency markets.
Greed is rampant and big money is out to profit as much as possible on the backs of the endless new, dumb money coming in. Just a couple of weeks ago, a Russian grandmother ("babushka"), a distant relative, called my people looking to invest her life savings into digital currencies. She has no information about bitcoin beyond the fact that she'd heard prices were going up and that it was an easy way to make more fiat.
C-list US celebrities are also jumping on the bandwagon. Floyd Mayweather, Paris Hilton, and Kevin Hart are just a few of the folks who recently sought to promote worthless ICOs and cryptocurrencies to their social media followers.
Ray Dalio, head of Bridgewater Associates, the world's largest hedge fund with $150B AUM, recently expressed his thoughts on Bitcoin. Knowing Dalio, I know for a fact that he'd never talk publicly about anything without having done incredibly thorough research and dampened his psychological biases by speaking with the most talented people in the space. Dalio said bitcoin is a massive speculative bubble. I tend to agree.
It's hard to imagine Bitcoin prices plummeting if you've been in the space for a while. You've drunk the Kool-Aid. You're part of a community that believes one thing and it'd be wrong to believe otherwise.
My friends, I urge you - take a step back. Look at the facts. Look at the charts. Listen to the people who have decades of financial market experience and who've been through dozens of hype cycles. They've lived it - they know what they're talking about.
Bitcoin won't die. Its price will simply decline by around 80%, as will the prices of the majority of altcoins. Until the next hype cycle.
Don't Let Hope Get the Best of YouAbove I have listed the multiple stages of a trade.
A lot of the time it starts with a great buy, which leads to a logical selling point.
Rarely do people go through with this.
Why? because humans are full of emotion, which a lot of the time will get the best of us.
Even though that sell order should be placed, GREED takes over. We hold on just a while longer wanting to make that extra buck.
Then the worst happens, the chart reverses. We then hit the DENIAL stage, where we refuse to believe this is happening, we think that Technical Analysis has failed us and the price will somehow come back.
Eventually we hit a bit of support! This is the HOPE stage, where we hope that somehow the price will rise high enough just for us to break even.
This all eventually leads to the final stage of REGRET. Also known of the land of no recovery.
Do not let emotions get the best of you. Emotions are never a reliable way to predict price movements.
Emotion is something that we all must overcome, if we wish to succeed in the trading industry.
Above, REGRET sets at $4150.
This could be an excellent short opportunity for BTC.
After just about hitting a triple-top, the BTC rise was rejected, which was immediately followed by a break in the most recent trendline.
IF hope prevails we will likely retest the previous high.
IF hope fails we will likely hit our REGRET target of $4150 which rests on a previous trendline.
Always know that shorting in a BULL market is risky. I advise using caution.
If you are not a margin trader, $4100-$200 could be an excellent buy for you.
Wish you all luck!
Bitcoin: The End of an EraThe dumps are coming.
Bitcoin has only one thing left going for it: the halving on July 16, 2016. Post-halving, there is nothing holding the dumps back.
Coinbase, the most bullish bitcoin company to ever exist, is now betting that Ether will overtake Bitcoin in the near future. medium.com
I am SHORT on Whaleclub: whaleclub.co
My past trades:
LONG 415.54 whaleclub.co
LONG 391.41 whaleclub.co
LONG 360.64 whaleclub.co