There is a guy here that I've been read him carefully, albeit he does not write much. His name is Avramis (https://www.tradingview.com/u/Avramis/). In one of his post (you can see here: https://www.tradingview.com/chart/SPX/2xiIiwdZ-Lets-take-a-look-at-how-an-uptrend-reverses/) he wrote:
"In every technical analysis book you read, they mention that an uptrend is a series of higher tops and higher bottoms. But in no book that I have read do they explain how to precisely identify a top or a bottom leaving the answer to realm of subjectivity. Identifying the correct tops and bottoms is an essential part of any method that uses price action pattern recognition like Avramis Swing Method. (...).
The minimum requirement to identify a Top is to have at least 2 large red candles after price reaching a new high. The second condition is that the second large red candle must have a lower-low from the previous large red candle, and a lower high from the previous large red candle. Thirdly the two red candles, do not necessarily have to be consecutive as long as the previous conditions remain for size and lower high and lower low. The reverse applies when identifying bottoms."
I read the paragraphs above many times and I asked him what is a large candle. His answer was:
"That is the million dollar question- well asked. (...). One simple way would be to calculate a moving average of the last X candle body sizes and compare the current candle size with that".
I do not have all tools to follow his instructions but I tried to do it visually (and subjectively). The result is on the chart above. Green lines connect tops to bottoms.
About the chart, my conclusion is;
Starting from the minimum price of December 15, 2018, and trying to follow the criteria established in the Avramis text, we that since that date the BTC has established "higher highs and higher lows" until June 26, 2019. The rule was broken wiht the top of July 10, which set a maximum price lower than the last top. If the BTC price drops below the July 2 low, then we will have a lower low - which may characterize a reversal in BTC trend.
"In every technical analysis book you read, they mention that an uptrend is a series of higher tops and higher bottoms. But in no book that I have read do they explain how to precisely identify a top or a bottom leaving the answer to realm of subjectivity. Identifying the correct tops and bottoms is an essential part of any method that uses price action pattern recognition like Avramis Swing Method. (...).
The minimum requirement to identify a Top is to have at least 2 large red candles after price reaching a new high. The second condition is that the second large red candle must have a lower-low from the previous large red candle, and a lower high from the previous large red candle. Thirdly the two red candles, do not necessarily have to be consecutive as long as the previous conditions remain for size and lower high and lower low. The reverse applies when identifying bottoms."
I read the paragraphs above many times and I asked him what is a large candle. His answer was:
"That is the million dollar question- well asked. (...). One simple way would be to calculate a moving average of the last X candle body sizes and compare the current candle size with that".
I do not have all tools to follow his instructions but I tried to do it visually (and subjectively). The result is on the chart above. Green lines connect tops to bottoms.
About the chart, my conclusion is;
Starting from the minimum price of December 15, 2018, and trying to follow the criteria established in the Avramis text, we that since that date the BTC has established "higher highs and higher lows" until June 26, 2019. The rule was broken wiht the top of July 10, which set a maximum price lower than the last top. If the BTC price drops below the July 2 low, then we will have a lower low - which may characterize a reversal in BTC trend.
