One thing I am pretty certain about the charts. Each time, there is a big swing, be it up or down, there would be a pull back. Duh? Sorry, but that took me a while to realise it. What I am unsure is how soon will it happen and how long will it last ?
As you can see from the chart, if you buy on the first bullish sign , you would make some good profits at the top before the sell down. That is, if you take some money off the table. Of course, if you are super bullish and have a long long time frame to hold and believe without a shadow of doubt that the price will go to 25,000 or more, then it is fine to buy and hold.
For me, I prefer to trade bitcoin, not invest. That I am clear.
So the candles help me a lot in my chart. Attempting to enter the market (buy or sell) before the candles closed can be suicidal like the candles forming in process now , as of writing. Can it retreat and continue the selldown? YES !!! Or can it repeat like the first box I indicated? YES!!!
So, relax, let the candles tell you what to do next (if you like candles pattern reading or else , move to something you are comfortable with). Of course, if it repeats like the first box and you do not enter now, then the opportunity costs is not getting it at the so called bottom price (where the lowest price or closing price of the hammer candle). It depends on your risk appetite , really.
Can the hammer pattern betray you with a series of greens and surprise you with a doji pattern just before you thought the price is going to shoot up? YES! So , you see, nothing is certain in charting. Just because it works once, twice or even 10 times, does not mean it would repeat again. There are just too many variables affecting the price action. I do not want to dwell deeper and it's not my domain of expertise as well.
I am mildly bullish for now based on the chart patterns but to buy is a counter-trend strategy. Fast in fast out , in my opinion. Trade safely, guys!
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It turns around, tricking the buyers into thinking it would scale up higher. See the 3 red candles that follow suit? Watch the 10,000 mark as this is the psychological level that was previously breached. If it breaks down again, it might go even further towards 8000 zone. Be extra cautious now.
Very late buyers are either fearing of their losses more than the initial excitement of getting into the game. Better to get back whatever capital left they had put in than to have a negative return. Learning to cut loss and cutting it fast ain't easy. I have been there, it's really painful .
It takes even more courage and conviction to enter the same pair after cutting your losses as the trend could do a 360 degree turn. This also explains why it is good to only have a small portfolio , maybe 3 pairs to begin with. That way, when the market makes a drastic turn, you are fast enough to cut loss, adjust your SL, take partial profits,etc.
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2nd last candle touched a low of 9927, breaking the all important 10,000 psychological support level. There seems to be a lot of support to shore up the price at this level. Be cautious now.
This was taught to me by my mentor. I had since used it and it has proven to work for me. But indicator as I said is not the holy grail to trading. It's the mindset that ultimately wins the game.
Just take a back seat and ask yourself - how many courses/webinars/talks have you seen/attended by any authors/gurus/experts that covers exclusively on psychology of trading? Why are there more and more indicators in the market? Why are there more youtubes that teach you to win $$$ for bitcoins, stocks, options, etc?
If psychology takes up 90% of the winning success as many said, then how come the emphasis is on the 10% , a contradiction of what is being said? Even if one has lots of money to burn to learn his lessons, he may not have the right attitude towards winning. On days when he wins, he bets bigger, hoping to make money faster. Then market turns against him, he got angry, he double up and lost even more. Until...........
You know the story. Quiet your mind, understand your emotions, study yourself not others, not market news nor how each indicator works. All indicators work if you know how to use it , be it 100 or 200 EMA. I have attended one seminar where the expert uses no indicators and still he gets the right signals. I had paid my share of tuition fees to the gurus and had also outsourced my responsibility to them. Now is time that I do it on my own and I write to encourage others to do the same.
BethanyJoy
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@dchua1969, thank you for your summary, I appreciate your wisdom! I am a very new trader- only 6 weeks ago I had never studied a financial chart before. My lifestyle is very intuition based and I do have a background studying psychology in high school and college. This whole crypto space fascinates me. Thanks again!