I want to make it painfully clear the difference between trading and investing. I am an investor for the long haul in cryptos. I have diligently chosen 6 coins I do not intend to sell unless something fundamentally changes about one of them. These are 2-5 year+ holds for me. Agree or disagree, from my experience I know that a solid portfolio out performs trading in and out of equities over the long haul. LTC is one of these coins. However I have allocated some of my money for trading in order to add to my core holdings, with the goal of beating the return if I was to invest in BTC alone. That's the goal! I want to be very clear this is with a small portion of my portfolio, NOT my entire portfolio. On to the charts!
Investing
The upper left chart is the path I believe at this point is a valid path based on EW theory. This is not carved in stone, it is a path of probability. Think of it as driving. To get from NY city to Miami you have to take I95, that is the path. That does not mean there won't be a traffic jam or a few detours along the way. But to get from point A to B this is a valid path. I get the question, can I buy now or should I wait. One question: 1) Do you like the coin and think it is a long term hold? If it is, the chart below shows we are way below the long term trend line and you can buy now with a 1/3 position, add a 1/3 if it dips, and 1/3 on a breakout.
Trading (never more than 2% of your portfolio)
As you can see we have completed and ABC correction and the next move should be up correct? No! unfortunately EW allows for a continuation correction pattern and we must be aware of BOTH. But let's take a look at a few things first to provide a better idea of the best probability. From the upper right chart we can see LTC is pretty much in correlation with BTC. Since we have a theory that BTC may correct more will LTC as well? I have mentioned the first thing traders need to learn is to spot trends. In the lower left chart there is what I use as a trading base. It's simple, and it's the base of my trades. So upward trends I draw from the bottoms of the candles, downward trends I draw from the top of the candles my trend lines. Why? The theory is I'm looking for a change in the current trend. If I'm in a down trend I don't care if the candles go lower than the trend line, I care when they go higher. Why? because that provides a signal for a change in trend. These almost always are points of support and resistance and consolidation before the next move. (Swing trading a correction like we just went through is risky and volatile and if you do not understand trends, patterns etc. should not even be a consideration.) Consolidation trades are easy to spot, easy to trade, and not as risky.
In the lower right chart, you can see several lines, the green long term trend line, and the red short term trend line. Ahhhh notice it broke through the down trend and is now consolidating. This is not rocket science, this is not a fluke, this is how it works 90% of the time. Now I have mentioned in previous articles how to trade the consolidation box and your welcome to read if you haven't. The orange line is a major support resistance line. It's obvious why as you can see where it was historical support and resistance points. Again it will not be a coincidence when we get there and it consolidates. This is the kind of trade I wait for, but we have something looming out there. A secondary pullback. If we break to the low side of the box, I am ready as a long term investor to snag up shares at $33-$35 on any sign of trend reversal for a small profit. Heck I bought my first at $50, i'm estatic to buy at $35. As a trader, if it breaks the box, I will try and spot the trend reversal and buy the breakout and use trends to find your sell point.
If you notice on the left I marked two small consolidation boxes. In previous articles I detailed these trades.
God Bless!
Investing
The upper left chart is the path I believe at this point is a valid path based on EW theory. This is not carved in stone, it is a path of probability. Think of it as driving. To get from NY city to Miami you have to take I95, that is the path. That does not mean there won't be a traffic jam or a few detours along the way. But to get from point A to B this is a valid path. I get the question, can I buy now or should I wait. One question: 1) Do you like the coin and think it is a long term hold? If it is, the chart below shows we are way below the long term trend line and you can buy now with a 1/3 position, add a 1/3 if it dips, and 1/3 on a breakout.
Trading (never more than 2% of your portfolio)
As you can see we have completed and ABC correction and the next move should be up correct? No! unfortunately EW allows for a continuation correction pattern and we must be aware of BOTH. But let's take a look at a few things first to provide a better idea of the best probability. From the upper right chart we can see LTC is pretty much in correlation with BTC. Since we have a theory that BTC may correct more will LTC as well? I have mentioned the first thing traders need to learn is to spot trends. In the lower left chart there is what I use as a trading base. It's simple, and it's the base of my trades. So upward trends I draw from the bottoms of the candles, downward trends I draw from the top of the candles my trend lines. Why? The theory is I'm looking for a change in the current trend. If I'm in a down trend I don't care if the candles go lower than the trend line, I care when they go higher. Why? because that provides a signal for a change in trend. These almost always are points of support and resistance and consolidation before the next move. (Swing trading a correction like we just went through is risky and volatile and if you do not understand trends, patterns etc. should not even be a consideration.) Consolidation trades are easy to spot, easy to trade, and not as risky.
In the lower right chart, you can see several lines, the green long term trend line, and the red short term trend line. Ahhhh notice it broke through the down trend and is now consolidating. This is not rocket science, this is not a fluke, this is how it works 90% of the time. Now I have mentioned in previous articles how to trade the consolidation box and your welcome to read if you haven't. The orange line is a major support resistance line. It's obvious why as you can see where it was historical support and resistance points. Again it will not be a coincidence when we get there and it consolidates. This is the kind of trade I wait for, but we have something looming out there. A secondary pullback. If we break to the low side of the box, I am ready as a long term investor to snag up shares at $33-$35 on any sign of trend reversal for a small profit. Heck I bought my first at $50, i'm estatic to buy at $35. As a trader, if it breaks the box, I will try and spot the trend reversal and buy the breakout and use trends to find your sell point.
If you notice on the left I marked two small consolidation boxes. In previous articles I detailed these trades.
God Bless!
Comment:
You will notice after you gain experience, that after a impulse buy trend you get an impulse sell trend. News has nothing to do with it. Look at a hundred charts and you will see the same pattern. Parabolic buying is followed by vertical selling!
Comment:
correction to upper right chart. apologize
