Trading Like a Boss

[theyoungmillionaire]

Trading Like a Boss: Takes Time and Research

Trading crypto is not easy and it takes time and patience. Even if you think you know all the chart patterns, indicators, and cryptocurrency street knowledge you can still lose everything.

Individual who is very knowledgeable about technical analysis, and they also follow the street very closely, might make some very wrong predictions. Cryptocurrencies like bitcoin can often trick traders, and all that street knowledge and TA goes out the window. Traders with extremely crafted TA skills can lose their shirt in a matter of minutes in bitcoin-land. So, make sure you know for certain that’s a legitimate head n shoulder or bull flag.

Confidence is Silent

Learning to trade can be difficult but there are so many experts in the field and online resources that can teach anyone to trade cryptocurrencies. The first thing to realize is that bitcoin markets or any cryptocurrency markets are very different than your average stock or FX trading arenas. In fact, many people will tell you that traditional technical analysis (TA) will never be accurate when it comes to digital currency markets. However, there are those that use TA regularly to day trade, make a living, and predict the short-term price swings we all know and love.

Studying Japanese candlestick charts can produce patterns that may be helpful towards predicting short and long-term price movements.

The first thing a trader should get to know is the most common financial chart used in the cryptocurrency industry which is the candlestick chart. The size of each candlestick represents a certain time interval, and individuals who study TA look for patterns in the market. This is when you will hear about certain chart patterns like the ‘Head n Shoulders, the Cup n Handle, Triple Top & Triple Bottom,” and many more funky phrases. However, these pattern help traders predict cryptocurrency price movements in the short and long term. They say after memorizing enough patterns individuals can see them subconsciously while day trading.

Cryptocurrency traders then take things to the next level by using a wide variety of tools that are also known to help forecast price movements in markets. One of the biggest indicators in the market many traders utilize is moving average data. For instance, a Simple Moving Average (SMA) is used by calculating the average of a digital assets closing value over a set interval. An Exponential Moving Average (EMA) and Displaced Moving Average (DMA) are more complex than the SMA. An EMA responds in a swifter manner to price fluctuations while the DMA is moved in set periods of time so a trader can predict market trends.

Moving averages are common trendlines followed by traders.

Another helpful tool used in trading digital assets is the Relative Strength Index (RSI). The oscillator basically determines the price momentum whether it climbs or falls. The measurement of speed is recorded between 0-100 and it’s one of the most popular trading indicators in many markets. The squiggly line typically meanders about sideways, or up or down, and if the line dips below 30 the market is oversold. When the RSI starts climbing past 70 then the analyst will say the price is overbought.


The RSI and MACd are just a couple of different indicators that help traders forecast price movements.

Moving averages and the RSI is just the tip of the iceberg when it comes to cryptocurrency trading tools. Traders use other tools such as Bollinger Bands, Moving Average Convergence/Divergence (MACd), Stochastic, the Detrended oscillator, Fibonacci retracement and so much more. All of these tools and more are combined with plotting chart patterns used by traders flipping cryptocurrencies on the side or for a living. They are also incorporating other methods like Elliott Wave Theory and the tenets of the Dow theory so they can forecast the infamous bitcoin ups and downs in value.

The basic five wave sequence found in common Elliot Wave patterns.

Now good traders can study all of this stuff and figure out how to use these types of indicators. However, smart traders are also listening to the streets of crypto, so to speak, as many cryptocurrency enthusiasts have realized that news and community emotions can move the price of bitcoin. For instance, if there is a large exchange hack or some government ruling in the short term you can probably guess bitcoin’s price will go down a touch. If there is positive news like CME and Cboe opening futures markets some people bet the price would go up. Most traders are listening very closely to all that happens in bitcoin because they have a lot of skin in the game.

The way a pump and dump works:

Pump and dump groups are scams. The organiser is the only one that generally makes money. They buy a crypto cheap. Then the announce it to a select few who buy not quite as cheap. Then they announce it on a telegram or social media (discord / twitter) platform. The frenzy of noobs buy it up high while the organiser offload it onto the people participating in the pump.

They use all the pump group members as shills (shill = people who hype and advertise a coin without using logic - e.g. xyz coin is going to moon buy it now! ) to spam trollboxes, forums and get them to involve their friends.

Sometimes the shills make some money but eventually they or someone else end up holding the bags (bags = overpriced crypto that you cannot sell without making a substantial loss). The shills will have crypto that is worth much less than you paid because they  participated in the scam and got caught out by the scam.

Pumps and dumps also hurt the crypto it targets and crypto as a whole.

Trader’s viewpoint:

I suggest, you should have actual analysis base on facts and concrete evidences that will show a fluctuation of trades, otherwise it is all bullsh*t. There are long game e.g., 40% Long-Term, 25% Mid-Term, and 35% on-hand currency for quick flips. If you are looking to capitalize on small percentage gains (1-10%) by trading a lot with a decent amount of bitcoin, there are coins designed for just that purpose (do your research). As for those short-term 5,000%+ gains, ironically, that requires a bit mid-term strategy. I do not usually advice putting a bunch of coins on these all at once; you will likely lose your money or scare off the pumpers. Accrue gradually with small amounts that will not make the price fluctuate much and keep in silent, the more people you let know about it will likely smashup your investment, best to do these so you know whether it's stable enough, observe.
 
If you see pump activities, put more on right price before it takes off. When those coins that are going to sprout up in the next couple of days, most are nearly impossible to tell with more than an hourly notice, you pretty much have to stay ready and always observe the markets for coins that were not on the radar beforehand. Remember to never set single sell walls; divide it up on multiple prices, the lower the amount on each price the higher probabilities you have of it being sold. Try to stay under 0.10btc per price on high volume coins and 0.05btc on lower volume coins, might suggest spreading them out deliberately for you to regain your original investments early on and still have free coins to play with.

Source
Source: Pump and dump
Be Positive

[metenjean]

Its a good educative article however OP might want to make a correction about the elliot wave theory, because 2 and 4 wave didn't count as a corrective move as it is still an upside trend. Here is the correct elliot waves move where there are A, B and C waves that describe elliot wave as a cycle to complete the corrective structure.  

[karungbitcoin]

I also still learn about trading plan and strategy, although i has been in trading forex in 2 years but still hard for me to make profit in trading. I more focus to learn and to understand about price action and price patern also how to manage emotions during trading. Try to make trading become simple, easy and fun.

[boyshx]

Thats huge informative article. I wont lie but I tae not one through all the points and I will read it later carefully as it seems really worth reading twice. However I have taken the overview of this and it seems to me general way of doing the trades and things that we need to know while doing the complicated trades. You have simplified the process by dividing the different aspects of the trades here. Like how the uptrend and down trends work and how to predict what will be the next target whether it is bullish one or bearish one!! That clarifies the doubt and next time I will see any graph it will surely help me to understand whether I have to put more money, sell it or hold it! 

[theyoungmillionaire]

Its a good educative article however OP might want to make a correction about the elliot wave theory, because 2 and 4 wave didn't count as a corrective move as it is still an upside trend. Here is the correct elliot waves move where there are A, B and C waves that describe elliot wave as a cycle to complete the corrective structure.  

Thank you so much. I really appreciate it. There are different corrective waves and the example info are just basic, so that people can easily understand. See some corrective waves below:  

Understanding Mass Psychology and Elliott Wave Theory
Wave 1 (impulsive) is an increasing small wave, a light pressure of demand (Bull Move). In Wave 1, prices rise because of a relatively small number of participants who buy traded currency pairs, for fundamental or technical reasons (speculation), pushing the prices up.

Wave 2 (corrective) is a decreasing wave, downward pressure in the supply (Bear Move). After a significant growth, investors may receive fundamental and technical signals that the currency was over purchased. In such a moment, wave 2 increases when people who initially bought decide to take advantage, while the newcomers initiate short positions. Price starts in the other direction but generally does not pass over the minimum initial position which initially attracted buyers at a moment of the wave 1.

Wave 3 (impulsive) is an increasing small wave in a pressure of the demand (Bull Move). It is often the longest of the five waves, wave 3 is a sustained wave when a large number of investors were mobilized by wave 2 to buy. With a larger number of buyers, the safety margin increases, extending above the maximum price originally formed by the wave 1. At this point, the threshold of resistance is one of support.

Wave 4 (corrective) is a small wave in a supply pressure (Bear Move). At Wave 4, buyers start getting tired (they remain without money or optimism) and again use the over purchasing signals. Generally, there are still quite enough buyers on the market, so here the decrease is relatively small.

Wave 5 (impulsive) is an increasing small wave in a demand pressure (Bull Move). Wave 5 is the final movement of the observed sequence evolution. Right now buyers are all motivated by greed rather than fundamental or technical justification, to buy and bid higher prices elsewhere. Normal price reaches a maximum before starting to move in the opposite direction.

Source
Be Positive

[xtraelv]

This one should also be included.  

While it isn't "analytical" it is really important that people recognize when a coin is being artificially "pumped".



The way a pump and dump works:

Pump and dump groups are scams. The organiser is the only one that generally makes money. They buy a crypto cheap. Then the announce it to a select few who buy not quite as cheap. Then they announce it on a telegram or social media (discord / twitter) platform. The frenzy of noobs buy it up high while the organiser offload it onto the people participating in the pump.

They use all the pump group members as shills (shill = people who hype and advertise a coin without using logic - e.g. xyz coin is going to moon buy it now! ) to spam trollboxes, forums and get them to involve their friends.

Sometimes the shills make some money but eventually they or someone else end up holding the bags (bags = overpriced crypto that you cannot sell without making a substantial loss). The shills will have crypto that is worth much less than you paid because they  participated in the scam and got caught out by the scam.

Pumps and dumps also hurt the crypto it targets and crypto as a whole.