Elliott Wave Extension 9 WavesHello guys :)
Sometimes we have 9 waves instead of 5 waves. This is rare.
Follow me for more tutorials.
Cheers :)
BTC-M
How to use trendlines when trading cryptocurrency 🎓A lot of newcomers have been asking for educational content because you don't understand why my strategies work and how I conclude that a particular price-action will likely happen on certain assets at certain price-levels. It's lovely that my followers aren't just seeking signals, but actually digests the charts I'm sharing and actively tries to expand their repertoire.
Search no further - here's an easy and free guide to trade cryptocurrency, using trendlines. 🤓
Important aspects of using this strategy
A really important step of this strategy is to consider the number of data points you make your trendline from.
In this educational scenario, I've used thicker lines for the trendlines with more data points and dashed lines for trendlines that almost can't be considered as a useful trend. As you can see, we have a very solid trendline, which makes it likely that some significant price-action will happen – eventually to the upside.
Another crucial aspect of the strategy (and every other strategy other than "hold and pray") is to have a take-profit- and invalidation-area.
We always want to know why we're in the position and why we're out of the position. In this particular scenario, I've decided that a convincing break of the strong, bullish trendline would be an invalidation for the trade. If the trendline breaks it doesn't make sense for me to be in the position anymore, since the trade is solely based on the trendline.
Furthermore, the take-profit areas of the trade are based on historic resistance areas. The highest take-profit area is based on a very weak trendline, which is why I wouldn't leave more than 10% of my initial position size to reach that.
This is an easy strategy for trading any asset, that anybody can use no matter how experienced.
Experienced traders also use this strategy. In my own opinion, simple strategies are the best; you'd be surprised how few indicators experienced traders use.
Feel free to ask any questions or share your thoughts about this strategy! 📝
#BTC - FROM TRADE IDEA TO TRADING PLANYesterday i posted a chart on Twitter, where i was expecting a bounce for bitcoin on the 4h timeframe (i'll post this general idea in the comment section). I had no clue about the kind of pattern it was going to form, so i moved to the 15 min chart, because the bounces most of the time are very fast and you need a lower timeframe. I've seen a double bottom, with the second low higher than the first. Then i've seen an harmonic pattern with a bearish divergence on top, so i was expecting a wave down at that point. The perfect entry point in this kind of price action is the 61,8 % of the last wave up. Using that entry point and a stop loss below the double bottom you have a good risk reward trade setup most of the time.
Learn to Read Charts (Regression & BTC)✅ What is Regression?
Regression is a statistical method used in finance, investing, and other disciplines that attempts to determine the strength and character of the relationship between one dependent variable (usually denoted by Y) and a series of other variables (known as independent variables).
The general form of each type of regression is:
Simple linear regression: Y = a + bX + u
Multiple linear regression: Y = a + b1X1 + b2X2 + b3X3 + ... + btXt + u
✅ We can use linear regression in both Bullish and Bearish markets. All you need is the center and you can easily find the tunnel (channel) for forecasting. Also, you shouldn't let the noises distract you because they might make you misread your highs and lows.
In other words: The tunnel (channel) of your linear regression works as dynamic support and resistance.
✅ TradingView lets you use the Regression Trend for fast and easy forecasting. You can find it in the toolbar beside your chart.
The Lazy Man's Guide To ELLIOTT WAVEElliott Wave Post 2; after writing the first post I have received some questions. So I thought it easier to write a follow-up post here showing some tricks.
To be clear, I am not an Elliottition as a whole, I use it as part of a wider strategy on the monthly and weekly timeframes. But also we have access to an automated Elliott wave tool.
The Elliott wave logic still works today and with a couple of little tricks, you will be able to use to help forecast potential target zones. Elliott can be very subjective and the saying goes "if you ask 10 Elliott wave traders where to plot the waves, you will get 9 different answers" So just like everything else, you need to use it wisely and not rely solely on it.
Again to reiterate - this is not a full-out lesson, there's more to learn on the topic. But these little tips will help you along the way, even to get into the overall concept a little quicker.
Step 1 - if you have this in your mind, you will be able to start the process for an overall measure.
Major rule
Wave 2;
If you can identify a wave 2 but it is less than 50% of wave 1 - be careful as it could create a double bottom (in an uptrend) and dip a little lower before moving up.
with 1 & 2 identified you can start working on estimations for 3.
Knowing wave 3 is usually 1.618 or 2.618 - will give you a good idea of where price is heading. Again you could use things like Stochastic or RSI to assist the directional bias when you feel you have identified the 2.
Let's go all out - let's say we have the perfect setup...
We can also say that a lot of the time, wave 4 is around 38.2% of wave 3 and often no greater than 50% (whereas, wave 2 is often more than 50%)
Then lastly, if we know a potential target for 3 (maybe draw 2 target levels to test) we can use that with 2 levels for the 4 move 382 and 50 as a rule of thumb. You can see what works best for the instrument you are trading. How they play out with backtesting and so on.
It would be great to get some additional comments from traders who use Elliott every day, even from new traders only now getting into Elliott waves. Any additional tips or trips from the pro's for the newer traders?
If you are new to Elliott waves - see the related post below for the basic concept.
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.
Guide to Successfully Trade Crypto (Short Term)Cryptocurrency is becoming more and more popular as Bitcoin rises in value and it is attracting new investors from different levels of experience. If you're new to the space then it's likely you will be buying coins after ICO's and wont be privy to private sales along with the DeFi portion of crypto , which is literally a whole other world.
Since I've started trading Crypto I've had a huge learning curve, with thanks to my team who has gotten me up to speed on this space.
Trading Crypto is not like the traditional assets most of us are used to trading. To be profitable day trading, a few helpful tips I've realized are:
1. You have to follow the volume and momentum. There are thousands of coins that will show great price patterns, but only the coins with volume are gonna be the ones that give you the gains you're looking for. There is AT LEAST 2 coins going +50% a day depending on the exchange you're trading on. The coins that make these moves are usually not your traditional names like ETH, DOGE or LTC. Because there are so much coins, you never know which one will be the one to make that impulse move on the day, which is why I like to make lists of coins showing specific patterns and group them. 9 times out of 10 I'll have 1 coin that makes the big move. Dont wait for a big move due to hype that may take forever to come, i.e ADA
2. Dont fall in love with the projects , you're in it for the money, not the tech. While there will be many uses for the Cryptocurrency you trade, falling in love with a coin because of its use can put you in trouble, because you're more inclined to hold during huge drawdowns, which will put a strain on your margin if you're margin trading, and the opportunity cost of trading a coin with more volume if you're spot trading.
3. Whatever you do, dont FOMO in. Because of the insane volatility of these coins, it can seem like the only place they can go is up. But let me tell you...from experience, it's always best to wait for a more logical and safe reaction when you see a huge 4H candle still pumping. Coins with huge volume will usually have a slow pullback and continuation. Also, if you buy in with a large enough order, you'll just be providing liquidity for sellers and the bots WILL eat you alive.
4. Learn to confidently trade using price action. Using price action will be your best option when trading cryptocurrency in the short term. Because of the rapid movements, traditional indicators like oscillators and moving averages which normally lag, will be of even less help in this market. Some patterns I've found useful that are very easy to spot are triangle patterns and breaking and retesting of an ATH.
5. Do some research. Learn about different tokens and their uses and news specific to your coin. Even you'll be trading short term, learning about the coins you trade can give you great insight to what may happen in the near future. For example, Chilliz $CHZ is a sports related NFT more specifically tied to soccer/football. I am quite familiar with the football industry and see how Chilliz has been implemented in very large clubs; I also know how radical football fans are for their favorite clubs and can see Chilliz growing much more in the longer term as it is utilized by more teams. By me knowing this, instead of exiting a trade, I may be inclined to leave some profit and let it run....dependent on the price action ofcourse.
6. Pay attention to Bitcoin. Most Alt Coins are heavily correlated with BTC and will follow bitcoin and some even suffer a multiplied affect. Meaning that if BTC drops 3% then an ALT Coin may drop 11%. This is the tricky part of trading Alts and its best to expose yourself a wide variety of coins so you know which ones react less (KSM for example).
7. Take your profits. Like any market, it's always best to take your profits, there is nothing wrong with it. There has been countless times I've been up and was greedy and decided not to take any profits and had to sit through a huge drawdown. This is a rapid market, and as quick as price goes up, it will come back down, and you may not have the volume to get back up to your entry until a few days later, which is brutal to sit through.
There is much more that can be said, but for right now, I think this guide will help anyone new to trading Crypto and will help the learning curve. Overall, I think Cryptocurrency is still in its early stages and there is way more to be exploited in terms of trading, staking, farming, De-fi and investing.
If you got this far, thanks for reading! This is also my 100th post so leave a like and/or comment and let me hear your thoughts!
Elliot Waves Complete Guide | Chapter 3.4 - "Barrier/Expanded"Hello Traders. Welcome to Chapter 3.4, where we talk further about two more different types of triangles - the Barrier and Expanded triangle. In the previous chapter we talked about the running flat and contracting triangle, but for these two, they are essentially the same but different overall shape! Most importantly, these are very common patterns within the realm of technical analysis and these textbook patterns also have Elliot Wave patterns within these common patterns. So, as you can see, if you can memorize the simple patterns, then you can start applying more advanced theories on top of them!
Chapter 3 Glossary:
3.1 Zig-Zag Waves
3.2 Flat Correction , Expanded Flat
3.3 Running Flat, Contracting Triangle
3.4 Barrier Triangle, Expanded Triangle
3.5 Double-Three
3.6 Triple-Three
-----
Barrier Triangle
The only difference from the contracting triangle is that the line BD or ACE is horizontal. This is actually a very common pattern we see used daily by traders - the "ascending triangle". The other one goes towards a horizontal line, so a Barrier Triangle is a variation of the contracting pattern. A barrier triangle has the same characteristics as a contracting triangle except that waves B and D end at essentially the same level.
Expanded Triangle
Most rules are the same as for contracting triangles, with these minor differences (make sure to memorize these as well!):
- Waves C, D, and E each move beyond the end of the previous same-directional subwave (the result is that going forward in time, a line connecting the ends of waves B and D diverges from a line connecting the ends of waves A and C.)
In the next chapter we will be going over the double three, and finally the triple three as a conclusion to chapter 3.
Make sure to read review all of my previous chapters. It will start to get more advanced!
How To Lose Money With CONFUSION (timeframe mixing) The issue for many new traders is understanding the correlation between timeframes. We often get caught up in indicators, news hype, chat room posts, and various other things.
One of the biggest challenges I see when talking to new traders is simply the lack of "experience" in reading multiple timeframes. This causes confusion and even self-doubt. The issue with the internet being so vast is there is a lot of info - but what do you go with & why?
In this post I have tried to "dumb it down" - the simple idea is to pick your timeframes based on your trading style.
Now if work gets in the way and you need to trade end of day or even swing (Longer-term) then really, you shouldn't stress so much about a 15 minute candle. A lot can happen throughout the day. But on the opposite side of the spectrum, if you are sat in front of your screen every minute the market is open. (scalping) then trying to work out what the monthly is doing whilst you hold a trade for an hour is not going to affect your trade (in general).
To give you a great example of this - I trade COT data as it's swing, with Monthly and weekly bias. I will have a mentee say something like "COT is a buy, but the price has dropped". Yes if you're looking at the 4-hour candle. If you think what institutional players can manage in terms of drawdown, especially using hedging techniques. It's far greater than the guy investing £5k of savings into Bitcoin.
If a hedge fund buys Bitcoin at 45k and the price drops to 22.5k - the likelihood is they have a hedged position & will be buying it all back at fair value. Whereas Mr £5k has lost some sleep & half of his capital - bailed, only to see the price shoot back up above his original entry.
You think of someone like Elon Musk - if his entry of a Billion Dollars was at 40k (example) and price drops to 20k, he has a paper loss of 500m for sure, it will hurt. But again if the Tesla share price drops from 800 to 700, he has a paper loss of (say 20 Billion) - a 500m loss on paper is less of a concern. *** You get the picture.
Investors & traders know that things don't just moon! they have dips, impulsive moves and so on.
So take the charts into account - You have an idea of what timeframes to pick based on your own personal availability or your style you have already identified. As a scalper it's easy to use 4 hour or even a 1 hour candle for your bias - a 15minute for a local area of interest & an entry on a 1m - 5m chart. (example only).
If you trade swing trades (depending on the overall time & expectations) a weekly bias, a daily interest and a 4hour trigger could be what you look for.
Here are some examples;
In these examples - all I have done is used 1 tool. This is only to show the idea - If stochastic is up then I want to be Bullish, if down I'll consider Bearish moves. Keep in mind this could be anything from above/below a moving average, a key price level or a magnitude of other things. Even other tools like RSI for example.
Example of step down
The idea is this gives you a directional bias.
Then we look at the area of interest.
And finally - we want to look down on the next timeframe for the trigger (entry)
Traders can easily get confused with one timeframe saying one thing and the next timeframe up or down saying something else. If you can treat it like a tick sheet, you can step down with confidence and work on a strategy favouring your directional bias & that's in confluence with the time period & your expectations.
This really is an oversimplified breakdown. Just to give a general idea.
Have a great week!
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.
A Quick intro to Moving Averages (Beginners) I have recently had some questions on some of the basics such as moving averages. First of all, there is some great free content out there via sites such as Babypips
I wanted to share some simple info to at least explain what a moving average is. Where it is used and what are the types of.
Moving average is a simple, technical analysis tool. Moving averages are usually calculated to identify the trend direction of a stock or to determine its support and resistance levels. It is a trend-following—or lagging—indicator because it is based on past prices.
They also form the building blocks for many other technical indicators and overlays, such as Bollinger Bands, MACD and the McClellan Oscillator. The two most popular types of moving averages are the Simple Moving Average (SMA) and the Exponential Moving Average (EMA).
Moving averages are a totally customizable indicator, which means you can freely choose whatever time frame they want when calculating an average. The most common time periods used in moving averages are 15, 20, 30, 50, 100, and 200 days. The shorter the time span used to create the average, the more sensitive it will be to price changes. The longer the time span, the less sensitive the average will be. @TradingView has many of these tools to use under the list of indicators.
A simple moving average is formed by computing the average price of a security over a specific number of periods. Most moving averages are based on closing prices; for example, a 5-day simple moving average is the five-day sum of closing prices divided by five. As its name implies, a moving average is an average that moves. Old data is dropped as new data becomes available, causing the average to move along the time scale.
Then you have an Exponential Moving Average (EMA).
reduce the lag by applying more weight to recent prices. The weighting applied to the most recent price depends on the number of periods in the moving average. EMAs differ from simple moving averages in that a given day's EMA calculation depends on the EMA calculations for all the days prior to that day. You need far more than 10 days of data to calculate a reasonably accurate 10-day EMA.
Highlighting the difference between an MA & an SMA - The Smoothed Moving Average (SMMA) is similar to the Simple Moving Average (SMA), in that it aims to reduce noise rather than reduce lag. The indicator takes all prices into account and uses a long lookback period.
Then how it can be used and applied, *** There are many strategies out there, the most basic starts with above or below a level (above = buy, below = sell) And then it steps into two moving averages crossing for example. Also as I mentioned above - other indicators use a form of moving average to calculate their plot.
Another simple strategy - Investopedia
This moving average trading strategy uses the EMA, because this type of average is designed to respond quickly to price changes. Here are the strategy steps.
🍒Plot three exponential moving averages—a five-period EMA, a 20-period EMA, and 50-period EMA—on a 15-minute chart.
🍒Buy when the five-period EMA crosses from below to above the 20-period EMA, and the price, five, and 20-period EMAs are above the 50 EMA.
🍒For a sell trade, sell when the five-period EMA crosses from above to below the 20-period EMA, and both EMAs and the price are below the 50-period EMA.
🍒Place the initial stop-loss order below the 20-period EMA (for a buy trade), or alternatively about 10 pips from the entry price.
🍒An optional step is to move the stop-loss to break even when the trade is 10 pips profitable.
🍒Consider placing a profit target of 20 pips, or alternatively exit when the five-period falls below the 20-period if long, or when the five moves above the 20 when short.
I hope this helps - Please feel free to add more info below. Any suggestions & comments to help new traders, always appreciated.
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.
BUYING THE DIPS Made SimpleBuying dips can be tricky, the issue is knowing if it's an actual dip or a full trend reversal. I used to think buying at a lower price to double down on an investment going the wrong way was a good idea. However, after reading a book called the Zurich Axioms by Max Gunther - the penny actually dropped. In essence, profit is profit. It does not have to be made from a stock or instrument that you are currently losing. Know when to run, when to cut losses and when to stick with it. Unfortunately by the time you understand true hedging techniques, you will be too late.
Kenny Rogers said it best - "You've got to know when to hold 'em, Know when to fold 'em, Know when to walk away, And know when to run"
I highly recommend both the Zurich Axioms book and a listen to Kenny Rogers - The Gambler.
The logic behind buying the dips
🍒 Buying the dips refers to going long an asset or security after its price has experienced a short-term decline, in repeated fashion.
🍒 Buying the dips can be profitable in long-term uptrends, but unprofitable or tougher during secular downtrends.
🍒 Dip buying can lower one's average cost of owning a position, but the risk and reward of dip-buying should be constantly evaluated.
Simple Ideas for buying dips
Use an arsenal of tools to help you spot opportunities.
You will see in this image RSI and MACD have different ideas - there is no wrong or right, it's up to you to work on the things that work for you. However, you don't want tools that either do more or less the same thing or conflict. So as per the first image - using a moving average for (up or downtrend) this could be a larger period such as a 200.
Envelopes
Utilizing envelopes of sorts will help visualize channels - this could be tools such as Bollinger Bands or Regression channels. Much like Moving averages - you won't need both and there are thousands of tools I have not used. So you need to experiment with something that you like or suits your needs and style.
Like all trading strategies, buying the dips does not guarantee profits. An asset can drop for many reasons, including changes to its underlying value. Just because the price is cheaper than before doesn't necessarily mean the asset represents good value.
Trend lines can be very subjective and educators and mentors teach them in a million different ways. They can be used, but again - back test and find what works for you.
- you can see the difference between a simple trend line and conflict with Bollinger; this is what causes doubt. The subjective trendline says one thing and the calculated/measured tool says another. Which do you follow?
The problem is that the average investor has very little ability to distinguish between a temporary drop in price and a warning signal that prices are about to go much lower. While there may be unrecognized intrinsic value, buying additional shares simply to lower an average cost of ownership may not be a good reason to increase the percentage of the investor's portfolio exposed to the price action of that one stock. (Investopedia)
🎲 If trading stocks there are other tools available that are not accessible in trading currencies or other instruments - things like EBITDA or P&L sheets to give further confirmation of continuation in the trend.
ISSUES
As many new traders don't yet understand the losses are part and parcel of trading, seeing your account in red plays on the human emotions (we have all been there) and this makes us do crazy things - doubling down on trades, adding more money to avoid margin calls, buying into a losing trade again and again.
I wrote an idea recently on how the mindset is represented on a chart.(click for post)
Simplicity
You can use simple price action to spot key levels - over the years one thing I have found is levels such as Order Blocks and imbalances. Plenty of info online for this - no need to go into here, save for another post,
Then when combined with regression channels you can start to paint "expected" levels of interest.
Just to show an example I have added EMA, Bollinger, Hand drawn regression and an imbalance level.
🔢 Elliott Wave Theory 🔠
Another awesome tool for finding directional bias - If combined with other techniques, indicators and tools, this can be mighty powerful as a whole.
A simple explanation of Elliott wave from another previous post (click for post) -
In Summary - you need a belief and a reason that you assume the stock is going higher. It does not matter if it's SPX, Bitcoin or Apple. Secondary you need a directional bias confirmation such as a 200 EMA. I would say to include an envelope (channel) of some description, Something to help you confirm the trend (Elliott) for example. And then a trigger, this could be a candlestick formation, an RSI or MACD overbought/sold signal. Something that suits you and your style.
I hope this helps. Be great to get other ideas, comments or strategies from others below!
Have a great 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.
How to not get rekt 🤩I've seen this too many times to skip writing about it at this point.
This is NOT the stock market. BTC is still extremely volatile, so play your cards safely, folks. Don't FOMO into your positions like a dummie.
A good trick I've learned from the past, is to buy in with a little, just to get rid of the FOMO. Then when the market "crashes" 20% later this week, you can buy in for cheap.
Bitcoin is still in a correction and I am being very careful with leverage. I don't want to get liquidated just to see BTC go to 65k in it's next move.
How to chart Premium/Discount to NAV for BTC Closed-end FundsThis is very different from my usual analyses, but I still hope you enjoy!
This chart calculates the premium or discount you are paying/receiving when trading GBTC . If you don't understand how such a thing can happen I will explain at the end!
For now I will explain how I created such a chart and how you can do it yourself! This can be applied to other bitcoin Trust/Fund.
_________________________________________________________________________________________________________________________________________________________________
How it's done
The goal is to get the premium or discount (P/D), For this example we will look at GBTC :
1. To do that we need to divide the price per share by what the share is really worth (in our case the value in bitcoin of the share). This will give us the ratio of the price vs its value.
Price per share / Net asset value per share
2. We get the value per share by multiplying how many BTC we get per share by the Bitcoin price.
Net asset value per share = BTCUSD*0.00094680 <---- This value can be found on the Fund website
3. We substract 1 out of the ratio to get the value of the (P/D).
(P/D) = (Price per share / Net asset value per share)-1
4. To chart this we go to enter a symbol and enter : GBTC /(BTCUSD*0.00094680)-1
Like I said this can be applied to other BTC fund. Say you want it for QBTC: QBTC.U/(BTCUSD*0.00112383)-1
Extra Notes:
-BTC per share values change so verify before using mine you could be mislead
-I suggest using a line chart, but you can experiment!
________________________________________________________________________________________________________________________________________________________________
How to interpret
1. If the value on the chart >0 the fund is trading at a premium and for values <0 it's trading at a discount.
2. Value are in decimal so if you see a value of -0. 05 the fund is trading at a discount of 5%
3. Values will tend to normalize around the annual fee for the fund(ex: GBTC -> -0.02).
4. After market values will be based on the closing price of the fund, but will continue to fluctuate since Bitcoin is 24H.
Wait for the market to be open to get real time premium/discount
_______________________________________________________________________________________________________________________________________________________________
How does this happen?
Often when we see a premium or discount we can generally blame it on 3 key factors:
Supply and demand , Management team and expectation. While pretty self explanatory if you want to more info I suggest you check out this Investopedia page:
www.investopedia.com
I hope this helped you and your trading. Thank you for reading!
Education - How does a bubble develop and what are the signs?Preface:
This learning content or information is merely my experience, or are those techniques that I use or find useful.
The beauty of technical analysis is that an analysis or forecast can be made using many different approaches.
These differ in effort, approach, tools and technical approaches.
However, I think one thing is important:
Keep the chart as simple as possible, try to see what is obvious and work with as few tools as possible but as many as necessary.
If you base your analysis on what seems obvious, it is likely that many other traders will also see it. This in turn would support a movement in the predicted direction.
= Self-fulfilling prophecy
-> Examples: Moving averages, Fibonacci retracements, Simple formations etc....
________________________________________________________________________________
Remark:
This is supposed to be a small help to identify signs of a bubble formation, I must absolutely note that a lot of experience and knowledge is necessary here, which I can not convey in a hurry, as this would definitely go beyond the scope.
Just try to analyze the BTC rise of 2017 with the help of these signs, or even the current rise.
What is a bubble ?
A bubble is usually easy to recognize in retrospect, a lot of green long candles, few red candles, until usually a high point. Then lots of big and long red candles and few green :)
But how do I recognize a bubble while it is forming?
Important:
Please read through the wave age tutorial I wrote beforehand, this understanding is needed to continue here.
If a trend does not consolidate sufficiently, but on the contrary shows shorter and shorter consolidations, rises faster and faster and ideally is still fueled by media interest, then these are the first signs of a bubble. (See bar in the chart)
Within a trend, the price must consolidate sufficiently after a rise (to go into this in more detail would go beyond the scope).
If now the trend in the period under review over the zenith, so after eg 6 waves, a new high and then further waves, with steeper and steeper price increases, so a bubble is to be assumed.
The price MUST consolidate sufficiently to be sustainable.
In the weekly, we can see that the price is moving further and further away from the standard SMAs (20,50,200) until it reaches an unnatural distance, which also indicates that the market may be in a bubble.
As soon as such signs appear, it is important to set very tight stops, as it can come to an abrupt end.
Summary:
-Ever steeper rises
-Ever shorter consolidations
-Distance to SMAs is becoming uncharacteristic of the market
Bonus: Media coverage of the asset
Annotation:
Since the weekly chart is shown here, it is not possible to see how the price reversal occurred. A SKS formed in the H4 , this was the beginning of the end of the steep rise.
Also today, we have the same signs as 2017, to note was the very strong and violent reaction , this does not mean that the course will now immediately sink it can go before still on 60.000 , 70.000 or even more high, from my point of view, the current consolidations were not sufficient, I have this in mind when placing a stop
__________________________________________________________________________________________________________________________
If I like this kind of tutorial, so leave me a like there and follow me. If there is enough interest I will post more tutorials like this in the future
Best regards and good luck
DCT Trading
Education - What are divergences and how do I use them?
What are divergences and how do I use them in trading?
A divergence usually shows the trader that the price is moving in the opposite direction to the indicator (or vice versa).
To find a possible divergence in the price you can use various indicators (MACD, Stochastic, Momentum, etc.)
I will limit myself to the Momentum indicator, because I use it myself in my trading.
What does a divergence say?
As already mentioned, the indicator shows me a contrary movement to the price, related to the momentum indicator this means for example:
The price rises and forms a new high, but the momentum indicator forms a lower high in the indicator itself compared to the previous PRICE HIGH
How do I use a divergence?
A divergence can be used in many ways if you know what to do with the information gained. In my opinion, this also depends on the chosen indicator, at least in terms of the information value I get from the divergence.
If one is able to identify a divergence correctly, one receives a kind of "warning", in my opinion a divergence by itself does not represent an action signal, but it warns me that in the case of the momentum indicator it comes to a trend slowdown although the price continues to rise.
What is to be paid attention to here?
-> As mentioned, a divergence by itself is in my opinion NOT a TREND SIGNAL, but a warning or information around which I can now supplement or adjust my trading.
-> Very important, there are two ways that one "bends" the divergence to right once the setting of the indicator is crucial, since each trader uses other settings, it is important not to change these in search of a divergence so that one is formed.
->Furthermore, it is important to consider the time unit under consideration, a divergence occurring in H1 is much less meaningful than one in D1.
Summary:
Divergences are a possibility to add important information to one's trading at an early stage in order to forecast possible price changes that have not yet occurred.
They do not represent action signals on their own.
Gartley Pattern Cheat SheetHello, guys!
Here is a cheat sheet for the very reliable pattern - Gartley. If you are able to find it on a chart the successful trade can be executed. The most important thing for gartley is the proportions which should be approximately like on the chart. There are four most popular Gartley's types:
-Crab
-Butterfly
-Bat
-Classical
Please, write in comments how are your trades with this pattern, it's very interesting to know!
DISCLAMER: Information is provided only for educational purposes. Do your own study before taking any actions or decisions.
Simple Swing Trading Strategy - Easy Money!This strategy would have yielded over 2,322% since November 2015 with only 7 trades!
This is a very simple swing trading strategy great for somebody who is just starting out in the market. It lets you get in and start trading without complicating things.
Trading with the trend is where the easy money is. Get into a position and then sit and ride the wave.
Rules:
-Daily Chart
-Use multiple EMAs - 20, 40, 55, 81, 200
-Go long when EMAs crossover and are in the order (from top down) 20, 40, 55, 81, 200
-Go short when EMAs crossover and are in the order (from top down) 200, 81, 55, 40, 20
That's it, couldn't be simpler.
Feel free to play around with EMAs and timeframes but this strategy works as is!
Happy trading.
BTCUSD Bitcoin analysis and educational lessonThe educational lesson is an illustrative diagram drawn regularly that shows most of the movements between the date of January 4th to today in a classic, easy-to-understand way, linking the movement with the next movement
The (COT) - COMMITMENT OF TRADERS Mystery RevealedThis is NOT an in-depth explanation or a way to trade, this is just highlighting some basics from a question I get a lot, you might see some traders talking about COT data. You may even see it in some posts. There's no magic to it, all you need to know is what exactly it is.
Of course, if you can use it within your edge to understand some bias by the bigger operators.
What is COT Data?
The Commodity Futures Trading Commission (Commission or CFTC) publishes the Commitments of Traders (COT) reports to help the public understand market dynamics. Specifically, the COT reports provide a breakdown of each Tuesday’s open interest for futures and options on futures markets in which 20 or more traders hold positions equal to or above the reporting levels established by the CFTC.
The COT reports are based on position data supplied by reporting firms (FCMs, clearing members, foreign brokers and exchanges). While the position data is supplied by reporting firms, the actual trader category or classification is based on the predominant business purpose self-reported by traders on the CFTC Form 401 and is subject to review by CFTC staff for reasonableness.2 CFTC staff does not know specific reasons for traders’ positions and hence this information does not factor in determining trader classifications. In practice, this means, for example, that the position data for a trader classified in the “producer/merchant/processor/user” category for a particular commodity will include all of its positions in that commodity, regardless of whether the position is for hedging or speculation. Note that traders are able to report business purpose by commodity and, therefore, can have different classifications in the COT reports for different commodities. For one of the reports, Traders in Financial Futures, traders are classified in the same category for all commodities.
You can read more info and get the actual data from the CFTC site itself.
www.cftc.gov
Methodology
The weekly report details trader positions in most of the futures contract markets in the United States. Data for the report is required by the CFTC from traders in markets that have 20 or more traders holding positions large enough to meet the reporting level established by the CFTC for each of those markets.1 These data are gathered from schedules electronically submitted each week to the CFTC by market participants listing their position in any market for which they meet the reporting criteria.
The report provides a breakdown of aggregate positions held by three different types of traders: “commercial traders,” “non-commercial traders” and “nonreportable.” “Commercial traders” are sometimes called “hedgers”, “non-commercial traders” are sometimes known as “large speculators,” and the “nonreportable” group is sometimes called “small speculators.”
As one would expect, the largest positions are held by commercial traders that actually provide a commodity or instrument to the market or have bought a contract to take delivery of it. Thus, as a general rule, more than half the open interest in most of these markets is held by commercial traders. There is also participation in these markets by speculators that are not able to deliver on the contract or that have no need for the underlying commodity or instrument. They are buying or selling only to speculate that they will exit their position at a profit, and plan to close their long or short position before the contract becomes due. In most of these markets the majority of the open interest in these "speculator" positions are held by traders whose positions are large enough to meet reporting requirements.
*** Reference from Wikipedia***
When combining with other analysis - you can use it to obtain bias or simple confluence with your existing ideas. For example, here's the chart plotted on a weekly timeframe using Elliott wave theory - Plotted usign another piece of software called "Advanced Get"
If you combine this with the data from the CFTC website - you will see that the professional operators have been reducing long positions and gaining albeit staggered short positions on the move down.
This showing the overall trend move - If you drill down further and look at the difference in short positions between the 19th of Jan and the following week (26th) on a daily chart you will see a rally. (go check it for yourself)
A useful tool
As I said at the start of the post, it's not the master strategy. It's simply another tool - I just wanted to share some info with the community on what it is and how it can be used.
If used correctly - it can prove useful.
Have a great week, feel free to pop 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.
Important for any new futures traders!Going to keep this simple here.
The price of bitcoin has sky rocketed these past few months. During the spring & summer time a few hundred dollar move in price would be crucial!
Now the price of BTC is lingering around 50,000. Those small movements that where only a few hundred dollars are now thousands.
👉 My point here is that anyone using anything above 5x Leverage is critically risking there portfolio.
💀These shake outs & wicks are future traders death call.
📈 Lets took a look just recently when BTC had closed above its critical resistance level at around 49,400.
Many individuals had purchased or over leveraged thinking price will move up after confirmation. (Bull trap)
On average the price shifted down about 3%. Anyone more then 20x leverage would have for sure gotten a margin call or suffered liquidation.
👇👇👇
My point is price is too high for individuals to think that over leveraging will yield them higher returns.
Trade futures with risk management and the correct way.
The reasons exchanges offer up to 100x leverage is so they can make money.
CRYPTO TRADING TIPSI made this post so that myself, along with other traders trying to step into the Crypto world can have a better idea and some insight to what lies ahead.
If you can drop some your thoughts on tokens, the Alt coins and also a few sites like Defi, Coin Gecko and 1inch, it would be appreciated. Trading the lesser known coins obviously are obviously high risk, but they also present opportunity for high reward.
More importantly, outside of the crazy news events that spike crypto sometimes, how does technical analysis stand over time vs fundamentals. Herd mentality, the big discords...I want to know it all..
I'm open to any other things worth knowing!
Thank you!
Chart Patterns Cheat SheetHello, traders!
Here is a cheat sheet which help you to identify the most frequent and reliable chart paterns. I should tell you that the patterns from the group "indefinite" are classified as bullish or bearish in classical literature, but in practice we should be careful using it in trading decisions.
BULLISH PATTERNS
Inverted Head & Shoulders , Double and Triple bottom are the most simple, frequent and reliable bullish pattern. Let's talk about bullish flag . It usually occur on the uptrend. The volume is high at the beginning of the flag and decrease to the end until the massive breakout to the upside with high volume.
The cup & handle is rare pattern and usually play out at the bigger timeframes.
INDEFINITE PATTERNS
The different types of triangles and wedges are very popular patterns and can be seen at the different timeframes. In classical books about TA rising wedge and descending triangle are bearish patterns, falling wedge and ascending triangle are bullish. But in practice it is very important to observe the side of it's breakout, as a result they can be bullish or bearish like the symmetric triangle . We should wait for the proper breakout confirmation to make a correct trading decision.
BEARISH PATTERNS
This patterns are the opposite to the bullish pattern, but work at the same way.
If you want to learn more about some pattern please give us to know it in comments.
DISCLAMER: Information is provided only for educational purposes. Do your own study before taking any actions or decisions.
The Secret of Successful FEAR INDICATORSThe truth is - Indicators are only what you make them. 9 out of 10 indicators lag. The rest are used by so many people that it creates a type of unconscious bias. And above all else can clog up your chart as above!
That's not to say indicators are pointless - far from it, it's more about creating a bias and using indicators or chart patterns as a confirmation instead of guidence in and out of trades. Especially in the COVID era, the markets are not behaving in any form of regular form. In the last 12 months, we have had the virus to deal with, we have had one of the craziest transitions of Presidents, In the UK - Well, Brexit. It doesn't get much crazier than this.
Unconscious biases , also known as implicit biases, are the underlying attitudes and stereotypes that people unconsciously attribute to another person or group of people that affect how they understand and engage with a person or group. in trading terms, this is how indicators and groups of people that use specific indicators. Unfortunately, there is no silver bullet when it comes to strategies and indicators. You will find tools that work in some market conditions, and not so well in other circumstances.
A lot of information you can get from an indicator is actually in the chart. *as a pure example you can spot things like Imbalances from candles prior to current price action. as per the example.
As an institutional investor, it's easy to understand the fear and the bias of retail traders. You only need to look at sentiment from companies like Oanda and IG index - you often find as trends rally 60% of retail positions are Bearish. The reason for this is 75% of retail trading is based on indicators and strategies like breakouts, trend line touches, and moving average crossovers. Measured using Fibonacci levels. Which then makes it easy for the experienced operators to see order blocks and go hunting for stop losses.
If you look at simple indicators like RSI -
A lot of what it shows can be visualised in the chart itself.
Now I don't want to be fully negative to indicators - it's just understanding their value and not fearing the herd. It's not only indicators - patterns can either be complex and you need a mathimatical degree to pin them down to perfection (joke) and they can sometimes be somewhat subjective. Starting points, anchors, measurements etc.
Fibonacci - an amazing tool with countless indicators using it in some way shape or form. But a lot of what makes it so accurate is the psychology underpinning the market moves.
When you add fibs to charts, or measure using other tools and patterns or indicators - they create the levels based on entries and exits of many people at the same levels.
I posted an idea recently on the market mindset (click image for full link)-
The idea is that emotions can control the ups and downs of moves based on perfect entries, terrible entries, ideal exits are simple trades you wished you never took, ones that now look obvious looking back.
So in short - tools cab be useful. But you should not need to be dependant on them. Especially with market conditions the way they are currently.
To summarise - Once you have your bias you shouldn't rely on indicators nor the group chat to execute your trade plan.
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.
