BTC/USDT Technical Analysis May 29th 2017
I've been learning about technical analysis for the past month and have had some success with trading recently, so I figured I would pay what I've learned forward. This will not only help me cement the techniques I've acquired so far, but hopefully help you all see the tremendous upside trading crypto can have This way you might be able to perpetually generate some income on the side!
Disclaimer
I am not a licensed trader and this is purely my interpretation of the charts. Education, risk management, and proper capital allocation is essential if you wan't to minimize losses and maximize gains! I am not responsible for any losses that might occur, so please only invest what you are willing to lose.
BTC/USDT Hourly, on Poloniex
Bull Flag
A flag is a continuation pattern that allows you to enter a favorable position during consolidation before the trend continues. In this instance, it looks like we have a bull flag forming, which occurs when we see an uptrend heading into a previous support ($2252) during consolidation. As consolidation continues in the trend direction (in this case up), the candle sticks will continue to trade in a narrow range, followed by the price eventually breaking in the original direction of the trend. On this specific chart I'm noticing a bull flag forming, with the candle sticks beginning to trade in a narrow space, while simulataneously getting closer to a key resistance at $2251.94 above, and the uptrend line to the right. I'm going to most likely set an alert for the price to get above $2251.94 and get a position after I confirm a lot of bullish volume. This way I can minimize risk by confirming that I am not caught in a Bull Trap. Here is a recent post I made, that describe what bull traps are and how to avoid them.
https://steemit.com/cryptocurrency/@waphilip/don-t-buy-or-sell-it-s-a-bull-trap
The Importance of a Plan
It's always important to have a plan for
- Capital allocation (how much money you plan to invest)
- Risk management (how much money you are prepared to lose in each trade)
- A goal price (the price where you plan to take profit).
Risk management is the most important aspect of your plan in my opinion because it will allow you to cut losses early, and insure you are not taken completely out of the game. There are many times where I was able to get out of a bad trade early, and enter in a better position at a way lower price. This allowed me to acquire more coins than I had before, which provides me with great upside potential during my next trade.
What makes a good trader isn't the gains they've made, but rather the losses they were able to minimize. In this trade, as I mentioned earlier, I am only planning on entering a position after confirming that that there is a lot of bullish support to the upside. Yes, I am probably leaving some money on the table, but I'm better off in the long run because there is a higher probability of making a successful trade in the end.
Goal Price
After analyzing the chart, I see the next major position is at $2320, so I am planning on scaling out of my trade and lock in profits at around 2294.11, which will allow me to avoid the huge psychological resistance level of $2300, and a second sell order around 2307.9, a few dollars under the expected resistance level. As the trade progresses I will perpetually move up my stop loss as to ensure that I end the trade as profitable as possible. It's important to note that humans love nice round numbers, so you can use that fact to your advantage when making buy and sell orders.
Important Note
It's important to remember that their is a lot of Human Emotion, Inexperience, and Hype, that currently surrounds this market, and you have to take it upon yourself to learn how to read and interpret charts, as well as properly forming and sticking to a plan. I've found that i've been most successful trading when I became a robot, by sticking to my plan and avoiding using my emotions and intuition to sway my decisions. Technical analysis isn't a crystal ball that will correctly predict the direction a market will move. It is however, a method to increase the probability of you correctly interpreting where the market will go. Also, please let me reiterate that I am not a licensed trader, let alone an experienced trader, so please use my analysis as another means of making an informed decision whether or not this trade is right for you.
Thank you for reading my post! If it was helpful by any means, please up vote, follow, and comment. Also, please let me know what you think about my overall analysis and delivery, so I can become a better trader and hopefully help out our amazing Steemit community in the process!
Also please feel free to tip me in Steem or Bitcoin if your feeling generous! I'm planning on creating another post after the trade to analyze my preparation and execution, so I can make the best possible trade next time! Follow for more technical analysis, as well as current crypto news! With that being said, keep on Steeming on!
BTC: 1BbP89PcZDpn1PYhi3nr3zhxWXiCxouJWb
Steem: 78282d649b7d7220
Sources:
https://learn.tradimo.com/advanced-chart-patterns/flag-chart-patterns
Picture via screenshot.
Great analysis! I have been doing technical analysis for years! It is quite a journey but very rewarding to be able to dissect market moves. I also post a lot of technical analysis stuff as well!
Hey thanks that means a lot coming from a vet! Although my journey has just began, I am have a blast learning and executing trades!. I'm going to follow you so I can learn as much as I can from your posts, so that I can hopefully continue to improve. Looking forward to reading your future posts!
Follow as many people as you can and take bits and pieces to make yourself even better! One thing I got caught up on when I was new was the patterns. What I have learned is the psychology of the market behind the patterns to understand what is going happening on a deeper level. Are people waiting to get out? Are people tripping over themselves to get into a rally? Questions like those will put you in the right mindset.
Hmm, I definitely never took the psychology behind the market in regards to which direction it will head after finishing a patter. I'm sure I could have found myself on the winning side of many of my previous trades if I interpreted the market on a deeper level. I'm going to definitely pay attention to your posts and ask as many questions as I can, so thank you for the advice! Looking forward to your continued support!
Excellent!
Thanks dawg!