Hi friends! Let's take a look at Iota! Looking at the four hour chart, we can see that IOT continues it's descent in the downtrend channel. Looking at the channel, we can see that it has several parts. I've divided the primary channel down the middle, to illustrate how reactionary the center of this channel has been. Currently, IOT is trading above the center level, which puts a bias toward a test of the top of the channel. As you can see, there have been several candles printed above the center line of the channel. Looking back through the history of breaks above the center line of the channel, we can see that there are two ways these breakouts have occurred — they're either sustained, and lead to a test of the top of the channel (green circles,) or, they're quick failures, that cause price action to retreat back below the center line. Looking at the price action, we can see that it's currently being compressed between the 50 EMA (in orange,) and the 20 EMA (in blue.) Look for a break of either moving average, as a signal of the forward direction of trading. If the pattern that I previously mentioned (regarding sustained breakouts above the center line of the channel) is to continue, we should see break above the 50 and a retest of the top of the trendline. This is just a basic pattern, that may give us an indication of the forward direction of price movement. We can see that the MACD is beginning to roll over, but it's still trading off of a bullish crossover. Ultimately, the price action is in the center of the channel, so it's best to wait for it to get to the top or bottom, before placing any new trades.
You can see how price action has been all over the 61.8% retrace. LTC has violated it several times, and it's currently trading just above it. This shows us that the 618 has been weakened as a support level, so if the 20 EMA is lost, I wouldn't be surprised to see LTC violate the 618 again. The two aforementioned moving averages should be closely monitored, to know which direction we are most likely to go. Whichever one breaks first, will be an indication of the direction we should trade going forward. Keep in mind, that the middle of a channel is never a good place to make new trades, or to predict which direction price will move. Those choices are best made at the top or the bottom of the channel.
Successful, expert trading, is all about placing high probability of success trades and mitigating your risk. Waiting for the perfect trade opportunity, is sometimes a part of that. In this case, I am waiting to see if we break above the downtrend channel. I am sacrificing these small, inter-channel trades, for a potentially much larger trade, if and when we get above, or below, this channel. That's how pros trade. We wait, and the strike when the success of the trade is heavily in our favor.
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media. Good luck trading everyone!
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-MPC loves you-
-JD-
You can see how price action has been all over the 61.8% retrace. LTC has violated it several times, and it's currently trading just above it. This shows us that the 618 has been weakened as a support level, so if the 20 EMA is lost, I wouldn't be surprised to see LTC violate the 618 again. The two aforementioned moving averages should be closely monitored, to know which direction we are most likely to go. Whichever one breaks first, will be an indication of the direction we should trade going forward. Keep in mind, that the middle of a channel is never a good place to make new trades, or to predict which direction price will move. Those choices are best made at the top or the bottom of the channel.
Successful, expert trading, is all about placing high probability of success trades and mitigating your risk. Waiting for the perfect trade opportunity, is sometimes a part of that. In this case, I am waiting to see if we break above the downtrend channel. I am sacrificing these small, inter-channel trades, for a potentially much larger trade, if and when we get above, or below, this channel. That's how pros trade. We wait, and the strike when the success of the trade is heavily in our favor.
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media. Good luck trading everyone!
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-MPC loves you-
-JD-
Comment:
IOT not LTC***