This TA is for short term traders or long term traders looking to jump in. Short term traders, you need to set a "Stop Loss" and learn about resistance. So, after an up move where do you jump in? The simple answer is after the pull-back. What does that mean? When you see a big green candle take off, you wait for momentum to stop and then put a buy order at the 38.2% or 50% pull-back point. If the trend is very strong you have to be ready at the 23.6% or 38.2% area using the 2H or 4H timeframe. If the trend is moderate, be ready at 38.2% or 50% pullback.
For a long term pull-back using the 1D be ready at the 50% or 61.8%. What this means is to use your Fibonacci tool and find the swing low and swing high to draw a scale and buy-in at the points I explained above. BTC stopped exactly at the 61.8% retracement of the entire 2019 move which was at the beginning of my optimal buy zone. [imge]
Did I buy-in? Nope, I was waiting for it to hit my green X on the dot and it did not. Am I disappointed? Nope, There will always be another chance to catch it low. For now, I am 25% in and looking to buy more, later. Why later? I'm looking to see how this whole move is affected by the death cross. When we exit the death cross (enter a golden cross) it should be a violent takeoff.
Keep in mind that if another green candle closes today at 8 PM above the trendline we are looking good for a recovery, it takes 3 candles to get a solid confirmation.
cryptoGats
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My TA is directed to new traders so please feel free to ask the most basic of questions, let’s interact so you can learn.
sojournersoul
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Thanks for explaining what a “pullback” means. I noticed through my technical “eyeballing it” method that strong candles upward usually resulted in a 50% retrace. Having confirmation on that thought process and some actual tools to use are much better! What are your thoughts on Alts? With BTC gaining dominance once again, would it be a good time to also try and find some entries on the majors?
cryptoGats
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@sojournersoul, Yes but I highly recommend trading alts for long term only. Trading short term means you are also playing against your exchange. Yep, they are the source of you always getting closed out of a trade. Those long red wicks come from them. They know where you are and they'll take you out.
sojournersoul
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@cryptoGats, "They know where you are and they'll take you out." - extremely good point!
cryptoGats
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@sojournersoul, Infuriating for sure, but that comes from lack of oversight.
investicli
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Fibulous work! I've been using the fib tool, but these examples are a useful benchmark for me to make sure I've set it up correctly and I have made adjustments to the fib, and my plan of action. Thanks, as always.
cryptoGats
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@investicli, no prob, yes the fibo is your best tool to use as an on ramp after BTC takes off. You’ll see that letting others fight for the bottom while you wait to buy after confirmation will make a big difference in your trading.
investicli
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@cryptoGats, Thank you... with the stop limit, how far below current levels do you suggest, what sort of range? An entire fib jump - eg if I expect the price to drop to the 38.20% fib level, is it good practice to set a stop limit just below the 50% fib level? With current prices that's a stop limit of about $400, or 4.5% below where I am expecting to buy in....? Is that too much? I am so aware of spikes triggering my stop loss...
cryptoGats
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@investicli, That's a tricky subject but yes you got the right idea, learning to set the SL is very fluid because it depends on how strong you believe the trend to be. If trading short term you really have to step back to timeframes like the 12H and set below the 61.8%, but heads up that's when your exchange will come in and close you out if you are riding too close.