Basics to tradev cryptocurrencies correctly. | Part 1- Crypto Academy / S6W1 - Homework post for nane15.
Hello is a new season on week of crypto academy, I welcome every one on my home work post on "Basics to trade cryptocurrency correctly" by my dear professor @nane15 am @kingworldline
The word trading actually means to give an exchange of something to something which actually has these value to the other, hence with respect to the financial ecosystem, means the act or the process by which an exchange is carried out by the means of buying and selling of an asset, cryptocurrency, commodities and cryptocurrencies, hence the essence of this exchange is to yield am interest from our stake, therefore our profit or loss are derived from the amount or the value of the assest, commodities etc minus the capital used, hence this speculation can be achieved by the increase and as well the decrease in that of the price of the asset or value involved.
Hence in trading there is nothing like having the same equivalent of what the seller has to offer the buyer, meanwhile they must differ either in value, quantity, quality and nature of the asset to set up the demand and supply.
Hence in the crypto world of trading involve the movement of price up and down which are initiated by the buyers and seller, hence whenever the buyer are dominating the market in the crypto chart are called the bullish trend and when the seller are dominating the market is known as the bearish trend, hence the presents of the buyer and seller is to fulfill the demand and supply by fulfilling their individual orders.
Trading is a form of exchange that involves buying and selling assets to make a profit. These assets are purchased with the speculation that the value will either increase or with the speculation that the value will decline. In the financial market, this activity can be carried out on brokers or exchange platforms. These platforms enable users to buy and sell assets at ease using simple clicks on their devices.
Hence these debates in the crypto market creates the fluctuations of the market price which lead to the irregular movement of the candle sticks, line chart, and others in the crypto chart.
Trading especially on stock,cryptocurrencies, indices, forex and many others are so risky and meanwhile this is carried out in trading platform like Binance, Kucoin, probit and poloniex and others, hence all this brokers has provided all necessary equipment which helps in making decisions in trading .
SCREENSHOT FROM TRADING VIEW
Hence due to the reactions between the buyers and the sellers determine the price action of the the market, meanwhile
Hence there are two basic hands in the market which are the strong and as well the weak as shown and explained in the below screenshot.
The strong hand in the market are known as the big investors or the Wales which actually has all it takes financial, materially and intellectually to manipulate the market to their test, hence with there large capital and the capacity they have, they can determine the direction once they invest in buying and selling at a specific point in times, meanwhile this strong hand can be commercial, financial, private firm or institute which has actually has good reputation on investment and returns.
Hence the strong hand buys in large quantities and as well sells in large quantities which cause shooting in a crypto market, the strong hand is after accumulating (buying) and as well distribution (selling), graphically the large firms tend to buy at low price and and they keep pushing up in order to force the weak hands to sell up their asset in their possession, they maintain this mean of extraction while the push the market to buy until their supply are reduced or exhausted at the peak of the market where they start to sell off gradually in the downward trend. Meanwhile, at a point of selling off the asset the distribution method attracts more buyers which thought that the market will pump up again, hence after the distribution from the strong hand comes a further deep in price as shown on the below chart.
The weak investors are known as the little investors or the smaller traders which have small assets, value or capital to boost in the market, meanwhile they do not have the potential or power to give the market direction aside when they are multiple and have collective effort on a common direction.
Therefore as the market is moving toward the peak, the weak hands continue to drop out from the trend, hence at the distribution stage the mind set of the weak hands is that the market will still pump up, hence at such a point suddenly the market will fall more and more causing the weak hands to lose.
To me, I can say that thinking like the pro is the way out than the pack, meanwhile as I mention above the pro has what it takes to manipulate the market intellectually, hence when you adopt the same mentality the pro has we can strongly catch up with some of their tricks to deceive us, hence by adopting that initiative of the pro we can buy at low price and sell at the peak of the market, hence for me is to think like the pro.
As regards to the pack, they lack knowledge and understanding on how the market moves, hence they ordinarily believe in the buy and sell without understanding the insight hidden principle or use against them.
Therefore trend trading is a component which defines the direction of price of an asset at a calculated period of time or interval hence being conversant with trend trading is quite important in trading in terms of figuring out trends for trade setup, hence this can be demonstrated by the use of Eliott wave pattern.
Hence Eliot wave indicator is one of the trading tools which is used by trader who knows how it works in figuring out the peaks and as well the lows of a price trend, therefore this wave comprises of the impulse wave and the corrective wave, hence based on this, the impulse has 5 micro wave of 1, 3, and 5 and while 2 and 4 are known as the corrective and the corrective wave comprises of 3 waves which are (a, b and c) having the (a and c) as impulsive while that of the b as the corrective move.
Hence below are the lay down rule of the Eliott wave formation
• The wave 2 of the impulse should not be more than the low point of the wave 1 of the impulsive wave.
• That of wave 3 should be the shortest among the 1,3, and that of 5 of the impulsive wave.
• The wave 4 should not go beyond the lowest point of the wave 3 of the impulsive wave.
SCREENSHOT FROM TRADING VIEW
Hence with the chart above, the Eliott wave rules should be in alignment and in accordance of the rules where the 2 did not exceed below the point of wave 1, having the wave 3 to be more larger than that of the wave 1 and 5, therefore wave 4 didn't exceed below the point of wave 3.
Therefore the Eliott wave fulfilled all the stepwise movement of the bullish trend which formed the higher highs and the higher lows forming the bullish trend.
Hence to identify the first wave in the wave we have to take a close look at the current trend and ensure that the wave 1 to 5 is completely formed, then alongside the corrective wave a, b and c. Meanwhile according to my screenshot below having it as a bearish trend. hence the C can be identified at the bullish trend where it is found above the swing high being formed by the a, then if that is the trend then there is probability that it could be a new trend forming the first impulse.
SCREENSHOT FROM TRADING VIEW
SCREENSHOT FROM TRADING VIEW
Then to identify the last impulse, using the Eliott wave theory, then considering maximum count 5, at the point we can look out for the corrective wave of a, b and c, then the corrective wave is always formed after point 5.
•Hence the main reason for the postulate is to have understanding based on having the sense on when to enter the market and when to exit the market as well.
•Hence the impulse aspect tells us when to buy or sell and where the impulse tells us when to take out our profit and exit.
•And it also helps us in controlling our emotions towards the market.
• It also gives us insights on how to abstain from the manipulation of the wales.
Using the Elliot wave we can figure out the trading opportunity with our ability to observe trends and as well using confluence trading, therefore to achieve this we can consider the uptrend first.
With the uptrend market which has the Eliott wave, we has to figure out the wave 5 of the impulsive wave and as well wave c after having wave 5 in place we can now wait for a lift, after a little bullish progression we can enter the market take profit at the top of the wave, with stop loss further below our entry point.
SCREENSHOT FROM TRADING VIEW
Hence on the downtrend order this principle and step wise move is still applicable in the reverse form of the downtrend, on this aspect of identifying the wave 5 of the impulsive wave we have to retrace the price to close below that of the wave 5 awaiting the corrective wave to get formed at the peak of a, then we can now place an order to sell with stop loss further above the the the entry selling point and take profit below the our selling point.
SCREENSHOT FROM TRADING VIEW
ELIOTT WAVE THEORY AND WYKCOFF METHOD
The Elliot wave and Wykcoff have a common concept with that of trend trading therefore they have a common relationship to share.
Then using the Eliott wave we have the corrective wave to show up at the beginning of the new trend having the price closing above or below that of the wave.
On the other hand the Wyckoff method makes use of the accumulation and the distribution to show up the critical point where reversal and trend continuation are likely to take place, hence this works alongside with the price action in determining the trend trading .
Hence since the two have common similarities, meanwhile that u can be used together to make confirmation based on trend trading as shown on the below screenshot.
SCREENSHOT FROM TRADING VIEW
In conclusion trading is actually based on the exchange of services which could be value, meanwhile the exchange carried out during trading is a deal of buying and selling of values at a speculated price in place to make devident.
On the side of cryptocurrency, there are some terms and intellectual application has to be applied in order not to incur loss due to the fact it is highly volatile.
Meanwhile to achieve all this, some technical analysis has to be adopted which involves the use of strategies, indicators, postulates on trends, which call the attention of the Eliott and strong and weak hand in the market which involves their pattern of the big and small investor in the market.
Therefore it is necessary to have an understanding of the tactics involved in the market before trading in and out.
THANK YOU FOR READING
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