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[Reading notes] : chapter 13 how & when to sell shortHello, everyone This is a threads of my reading notes for the great book: [ Technical analysis using multiple timeframes ] And here is the notes of chapter 13, how & when to sell short I will go through all of key points of this book, and find proof from the bitcoin chart. Why to selling short? from the book : bear markets occur every 39 months on average and typically last for about 18 months. that is a lot of time where the odds are stacked against long trades and where selling short makes sense to generate market profits for the purpose of current income. And let's have a look at the bitcoin market for the bear market times: 02.Dec 2013 ~ 24.Aug 2015 last 21 months. 18.Dec 2017 ~ 28.Jan 2019 last 14 months. In the long time of bear market, shorting is a good tools to catch great profit. Measures of sell short By selling short, the trader expects to profit by repurchasing the shares at a lower level and profiting from the difference. And cutting losses must be taken very seriously when selling short since the unlimited losses. Shorting takes the right mindset Selling short is a skill that every serious trader learns to utilize during stage 4 market declines. The best time for sell short is during a bear market, but there are always stocks in a stage 4 decline that can be sold short regardless of the overall market environment. What is a bear market? The most obvious sign of market bearishness is when the majority of stocks are in established downtrends or when the overall market indices are below key moving averages. the best way to define a bear market is an environment in which markets where the 200-day MA is declining. Let's look at the chart pattern of bitcoin in bear market 2014 and 2018 with 200 day MA. From the chart above, we can see in the bull run, bitcoin will not touch the 200 day MA, if bitcoin drop below the 200day MA, then it's high possibility we enter the bear market, and 200 day MA will become a major resistance line of bitcoin. But is it the best indicator of bear market? how can we measure we are near the peak of ATH? find the bear market indication in in early stage is very profitable and very risky also another clue is the price of stock/bitcoin drop below the long term support line. such as in 2017 bull run, the 20 week MA is the most important support line for bitcoin, but it drops below the 20 week MA on 29.Jan 2018. This may indicate the bear market is coming! And I found another indication is the bitcoin is not correction in healthy range (20 week MA) and resume to advance again, this means the final ATH will be very soon. Sentiment of bear market In the bull market, everyone is very confident, but in bear market, stock tend to drop much quicker than they advance and it has a great deal to do with emotion. bear market are characterized by a stronger emotion response than bull markets because people are complacent when they are winning and become frightened when they are losing. fear is a much stronger motivator than complacency, and emotional liquidation from frustrated long holders can lead to quick declines. Choosing shorts Timing need to be more accurate when it comes to shorts, in bear environment, try to concentrate only on the highest probability setups, and keep overall trading activity low relative to your trading volume in a bull market. you need to have the patience to let the market present you with the lowest-risk opportunities. This occurs when the trend are aligned on multiple timeframes . Some of sharpest rallies experienced by stocks occur during a downtrends, and while these rallies usually fail to hold up in a down trending stock. Trend trading is the safer way to consistent profitability, so do not allow yourself to be enticed by the rapid movement. Short alignment Trend alignment of short trading positions is the lowest-risk, highest-profit potential trade scenario. Whether we trade long or short, the basic cyclical structure of the market never changes. Find the candidate with daily timeframe The first step in trading short is to find a stock in an established stage 4 downtrend. when trading from the short side, we ideally want the overall market, the sector and the stock to be in a decline. In digital currency market, we hope the bitcoin is in decline when shoring the alt coins. And if the daily MA 10-, 20-, 50- stacked below each other 10<20<50 is another bonus for shorting. let apply these rules. Shorting choose in bear market 07. Feb 2014, lower high formed in Jan 11, and consolidate in the neck line range ~ 790, but after 1 month, the market choose downside direction, when 07.Feb 2014, we can see obvious MA stacked 10<20<50, it's a sign of bear formed, good point to start short. 13.Aug 2014, lower high formed in 01.July 2014, and break the neck line in 14.Aug 2014, with daily MA 10<20<50 stacking, good point to shorting. 05.Mar 2018, daily double top seems formed, this chart pattern in bear market have strong power to drive the price down. we can setup shoring with stop loss in here. 05.May 2018, daily double top formed, we can shorting with stop loss from here: 29.July 2018, bitcoin price formed lower high in daily chart. shorting! 14.Nov 2018, bitcoin break the major support which support bitcoin ~ 1 year. the longer the hold, if breaks, the large dump will happen. shorting without reasons! Shorting in bull market I have to say shorting in bull market is very risky, bulls driven by FOMO of crowd. Don't short in bull market otherwise you're very experienced in trading. And one rule we should always keep in mind is we should ride the trends, not try to violate or control it. So in bull market, just find the right position to long, don't try to stand on the oppose/low possibility position.
BITSTAMP:BTCUSDEducation
by HuPan
The Advantages of Price Action (Technical Analysis) Technical Analysis (AKA Price Action) Technical analysis is the understanding and observing of markets through the only thing that matters; price. Prices generate similar patterns over time, in every market. A single price chart contains more information than you would ever imagine at first glance. Everything you need to know about any company, or market is on the chart in front of you. The current price is what the true value of the market is, regardless of news, indicators, or anything else. The Advantages of Technical Analysis (Price Action) No News - Everything you need to know is on the chart in front of you. Completely disregard all news and outside information. All news is already built into the current price. The price action of the market is all you need to know. Once you understand how institutions operate, you can follow them. No indicators. All indicators are a derivative of price. For example a Fibonacci level. Every price on a chart is a Fibonacci level of some other price on the chart. Although they appear to work, these levels do not work because of Fibonacci. But instead due to the traders equation, which is the mathematical formula institutions use to enter and manage trades. Clearly define support and resistance. You can see on a chart where prices are likely to do something. These are "Key entry points" or "Buy and Sell Zones." Clearly define risk and edge. With technical trading, you have the ability to define your risk before getting into a trade. If the market does not do what you expected, and instead goes beyond your stop, you exit. Without needing to wonder about why this happened, or constantly observing the news. Identify the strongest markets without relying on outside information like news, indicators, someone else, or a "tip." Become independent and trade for your self. If you found this helpful please like! Feel free to comment or ask questions.
Education
by tradersmentality
Using Long Term Trend Lines in CryptoI wrote this one 8 Dec 2018, but because i wanted to add more things i kept it on hold in a hidden post. I just did not have the time to complete it, so i will post it as it is now and based on question/comments, i might make a part 2 on this post. Every week i keep seeing this long term LOG chart and i simply just can't stand it anymore. I know most people think TA is about drawing some lines and we can simply trade based on those facts. In many cases that is very true, no doubt, it is just not that simple. I have mentioned many times that i simply do not look back at the period before 2017. I am 100% convinced without a second of doubt, that this long term chart of Bitcoin' is as useless as they come. There is one very simple reason for my assumption, the market dynamic (the buyers and sellers) are completely different back than. - The percentage of professional traders is so much more now than back in those days. - HODLing days are over, who still has the confidence to keep 100% of their portfolio in crypto. - Maybe the most important fact of all, it used to be buy and sell only, nowadays shorting has become a defining factor in this crypto world, do not underestimate this for a second. - Leveraged trading, is much more in 2018 than it was in the past. Of course there are levels where certain early investors, who were smart enough to sell (at least part of their portfolio) during the highs, who might think; "what the heck, lets try a little bit again around 1.000/2.000/3.000 or whatever price they think might be worth the shot. Because they remember certain support levels were important to them back in those days. Current support levels are mostly created because buyers step in, but just as much levels where bears take profit on their shorts (which are also buy orders). Since we usually see shorts squeezes at certain levels, it is maybe even safe to say that the bears determine the support levels nowadays. Just look at how many people kept adjusting trend lines the past months and referring to past support levels around in the 5K and 4K levels. But i think we have all seen what value these levels had the past month, absolutely nothing. They all cracked like it was nothing. Now i am not saying i knew it would go like this, i never expected it to get dumped so much so fast. But it was quite obvious that a break of the 6K would be very bad for the market since it was a huge support for 8 months. Throughout 2018, how many times did we have breakouts on those descending trend lines from the 20K level (yellow circles). The only solid useful line i can see here, is the blue one. For the rest, what is the value of them? You need to look at them upfront, not in hindsight. Crypto is a very young market which still has to mature. So it will take many more years to achieve that level. Only THEN can you think of giving real value to these long term trend lines . The best example is the break of a few weeks ago. Not matter if you were a bull or a bear, but the 6K support zone held as support for more than 8 months. Would you really try to buy long term based on that trend line? Or was it quite clear the bears had won the big fight and we would start to see a crash. Now my message is not that it is pointless, there are enough (mature) assets where it does work, i just want to give the message, do not stare blindly at these long term trend lines . Maybe use them as an extra tool to confirm your analysis, but nothing more than that. I talk with several professional traders on a regularly basis, there is not even 1 of them that even mentions these trend lines . To put it in more simple words, when looking at a chart (no matter which time frame) it's like one big story. And like each story it is divided in chapters. What i am trying to say is, do not mix up the different chapters. For example, the 6K triangle is a chapter, or the current possible triangle as a chapter as well. Many of you follow several analysts here, we all make good, decent and bad analysis, but i don't think i need to remind you what catastrophically bad predictions have been made based on these trend line . I don't want to step on any toes, but i just had to get it of my chest, because it's not fair towards the less experienced traders :) Previous educational post: Another educational post, worth the read, makes you understand my message here better; Don't forget to give a like if you appreciate this :)
BITSTAMP:BTCUSDEducation
by botje11
92
Analysis on the trend of ethereumAnalysis on the trend of ethereEth I have also given several previous analyses, and you may still have fresh memories of preventing the fake breakout on February 24. We look at the 2 hour trend, the current formation of a zig-zag line breakthrough of the technical form, if the upward breakthrough of $137, it is likely to challenge 144, 149, 156 three resistance levels. If it falls below $132, the trend is downward. My advice: break through the previous pressure line of $144, macd forming a long trend, can participate in the long, target 144, 149, 156, but must set stop loss.
BITSTAMP:ETHUSDEducation
by peter-l
Use moving average indicators to find short - termpWhen a wave of market into the horizontal consolidation, how to choose the next buy? I will give you a simple indicator today. The moving average is a common technical indicator used in tables. When many people start trading, the first thing they come into contact with is the moving average and K chart. The moving average is the average of the closing price of n days, and also the average cost of n days. Early investors all know the theory of reason and the galanz method, which are the tools to use the moving average for investment behavior. Although traditional, they work wonders in the digital currency market. As shown in figure, I set the ma12, and in this wave of market, the price obtained the obvious,, ma12 also showed a trend of obvious rise, after all line go flat, also is the first time we have underweight position, after some form, should be on average once again become warped, price placeholder line, is to make the average also become one of your support, hold prices up. Once the formation of a moving average pressure, is the signal to reduce the departure. Although this index is simple, but easy to operate, the disadvantage is poor sensitivity, not suitable for short - term trading, but the amplitude of the currency market, band trading profit is also very rich.
COINBASE:BTCUSDEducation
by peter-l
Bull run still not confirm ( ETH/USD )Fairly good, now Many people think the price will Bull run. but still we are not confirm it will bull run or not. Prices may grow a bit more in coming hour. How the price bull run went up last year. Bull run does not match with last year. We are now in a very important place. If ETH cross $124 Afterwards we have a further support in $130. and if ETH cross $130 most of the possible increasing price. but We are still in confused, because If ETH go down to $ 120 again. ETH again can touch $115. If we look to indicator RSI showing downtrend. So we need to confirm, So you need to wait least 24 hours for market price direction. And My All Tradingview Crypto Investor & Trader. I have a good Cryptocurrency Trading software for you. This is world's fastest and most secure trading bot. I liked this software very much. If you want to know more, you can Visit their website : wolfpackbot.com This is my new account. the name of coinvan official. Now try to share regular good analysis. If there is something wrong about analysis. Please make a comment. I will try to correct my mistakes. Thanks
COINBASE:ETHUSDEducation
by CooDesk
ETH patternslargest time frame pattern (blue): falling wedge, ETH has been riding resistance for a while, a drop to support would be devasting bring price to the 10-25 dollar range...(funny oscar predicted ETH to 16, and i have a chart to support that). medium time frame pattern (red): descending wedge, ETH fell outside of this pattern in december but got right back into it, currently sitting on support, a move up to test resistance brings prices to 120. Descending wedges typically break down. Target for this pattern fits perfectly with the larger time frame pattern @ 25. small time frame pattern (yellow): falling wedge, currently playing around at resistance, a fall to support lands ETH around 90-92. This pattern typically breaks up. A breakout could take ETH to 140. This target is also the .65 on the fib retracement from high in january. If the small TF wedge breaks up, this could get us out of the other patterns. I noted in the green marker a potential IHS with a descending neckline. 140 could potentially be the neckline test, and a bullish break of that pattern could bring us to 240. Excited to see how the next week or so plays out!
KRAKEN:ETHUSDEducation
by prospectANALYTICS
ETH Spoofing, what did they do and what was the resultToday i described the spoofing that was going on with ETH, almost step by step. I will post all the messages here below, look at the signs and try not to get fooled by these cheating bastards. 1) 4 hours ago Comment: Ping Pong action again, always the same when volume drops to these levels. Nothing really changed, except that we have a resistance now around 3840/50 as well. Alts are still doing okay, Litecoin even reached the target already. ADA also been strong the past days. But i personally want to see XRP show some strength. That one still has a lot to make up for. ETH seems to be used as well by the whales for spoofing. The volume on this one increased a lot the past month, so probably a lot of money to be made by them. At the moment seeing a 2 mil and 4 mil sell order, of course completely fake as usual. They probably try to get their longs filled. 2) 4 hours ago Comment: Just watch the price action closely of ETH on Bitmex. You see those big sell orders go away as soon as there is a little bit of buying. They stay away, just until the buying slows down, they pop up again. Just think of it this way, if you have such a big amount you want to sell. Would you throw in a 6 mil sell order while the buys are like average 100/200K? If you really want to sell, would you scare the whole market with your sell orders? There are 2 reasons why they do it, that is to push the price down to new lows or (what they usually do) push the price down into their buy orders. I remember the drop from 8K to 6K after the 8.5 high. Back then we could see similar tricks, but was going on at other exchanges as well. So of course we can't really say what their intention is, but if we don't see a controlled operation throughout several exchanges, we could assume they are just trying to fill up their longs. But if we see them doing it on several exchanges, than we can assume they are trying to push the price to new lows. 3) an hour ago Comment: Here we can see the chart of ETH, yellow circle is when i saw the spoofing (could have been going on even longer). Blue circle is when i mentioned it, as we can see, we have only been moving up since. Also we can see the bigger candles are buy candles. With the current drop (just logging in again), i saw again spoof sell orders. People just keep falling for it. As i mentioned before, it's not easy to say what their plan is. But general advice is, ignore the spoofing and just follow your own TA. 4) Just look at this shit, those manipulative bastards. Creating a fake (ugly) H&S on the right. With their spoofing, scared traders who react on it and eventually we see a small short squeeze. Taking the money of the ones who shorted because of their spoofing. Now after this squeeze, it could be their plan is already finished, but it the move seems to be a bit too small. So it would be likely to move up some more. But earning 2/3% on a few million, is not small of course.
BITMEX:ETHUSD.PEducation
by botje11
23
3 trading methods with my indicator. :)it's mainly for swing trading, i use the 3 day / 15 day / monthly charts with it and it works perfectly, it works good for stocks and cryptocurrency. you will use heiken ashi chart style and turn on the EMA DOTS indicator. once the indicator is on you will hide the heiken ashi so you only see the dots. when a green dot -0.57% -7.44% appears you buy, if a green dot -0.57% -7.44% appears after that green dot -0.57% -7.44% you hold your investment. if a red dot appears you sell your position. easy as that. the standard dots setting will be set to 10 - use this for any chart above 3 days change the dots setting to 6 for 3day charts and below shorter time frames will be choppy. larger time frames will be smooth. *Daytrading smaller timeframes is possible but not recommended.
NASDAQ:AMZNEducation
by UnknownUnicorn2319099
3
Slow and Steady WINS the race.Buy Green Sell Red // it's mainly for swing trading, i use the 3 day / 15 day / monthly charts with it and it works perfectly, // it works good for stocks and cryptocurrency. // you will use heiken ashi chart style and turn on the EMA DOTS indicator. once the indicator is on you will hide the heiken ashi so you only see the dots. // when a green dot 0.35% -0.78% -0.78% -6.68% -7.44% -7.44% appears you buy, if a green dot 0.35% -0.78% -0.78% -6.68% -7.44% -7.44% appears after that green dot 0.35% -0.78% -0.78% -6.68% -7.44% -7.44% you hold your investment. if a red dot appears you sell your position. easy as that. // the standard dots setting will be set to 10 - use this for any chart above 3 days change the dots setting to 6 for 3day charts and below // shorter time frames will be choppy. // larger time frames will be smooth. // *Daytrading smaller timeframes is possible but not recommended.
BNC:BLXEducation
by UnknownUnicorn2319099
1
Exploiting pricing discrepancy to win ZEC XMR DASH ETC ETH NEOIts all explained on the graph but in summary, we selected our favorite larger cap digital assets that are already working products. In this case we used: Currencies -BTC, DASH, ZEC, XMR Platforms: -ETC, ETH, NEO The objective is to make gains in FIAT and and accumulate digital assets by making use of arbitrage under market volatility whether it be a bear or a bull market. The graph is a little complicated but its worth the read. The reason i don't graph back further or use smaller cap assets is purely because of graph scaling. My favorite smaller caps (ETP, GAS, PIVX, BURST, ZEN) present opportunities that make the gains on this graph look insignificant. *The major disclaimer is that you need to be able to understand when the market as a whole is bearish or bullish. Finding the bottom can be challenging but it comes down to buying the dip, often over and over again. Good luck
COINBASE:BTCUSDEducation
by warrenhochfeld
2
Market Cap: Controlled Supply vs. Gigasupply CoinsLeft chart shows market cap of top 10 coins calculated using data from coinmarketcap.com from 28 July 2018 Percentages are share of the top 10 rankings. Right chart is market cap of same coins calculated as if they all had the same circulating supply as Bitcoin (approx 17.1 million) This makes it clear why it is absolutely pointless to compare the market cap of gigasupply coins like XRP, EOS, XLM, ADA, IOT, TRX and ETH with controlled supply coins like BTC, BCH and LTC. In fact even Litecoin is a large supply coin with its 57 million coins, but ffs Cardano has 28 BILLION coins and Stellar has 19 BILLION !!!! It doesn't even make sense to talk about market capitalization for these coins. At the end of the day, if these large supply coins are really cryptocurrencies, we should question why such massive amounts have been produced and of course who really holds them! << mean 'much less than'
BITSTAMP:BTCUSDEducation
by RealMcafee
15
ETHBTC – Gann square + Fibonacci ArcsHi Guys. As all crypto market went down it is a good time not to panic and learn something new. Today we prepared for you nice indicator Gann Square combined with Fibonacci Arcs. This enables us to see supports and resistances not only linearly but also circularly. Looking at the chart we can see at the horizontal axis we have a time and on the vertical axis we have price. Gann said ideal harmony is when they both move in a proportional way. That is way is middle line on this indicator is 45 degrees – it means when following this line price and time are in the harmony. When below that level price goes faster down (particularly in this case) than time. This means SELL. If we go above 45 degrees this means price goes faster than time and there is a time to BUY. Ok but what happens in the middle. Is prices’ and people’s behavior linear? Not necessarily. What can we do when being in between the lines 2/1 and ½? So the answer is Fibonacci Arc. Imagine those circles are like pulsing sound. Fibonacci claimed everything has a cycle and proportion. You can find numerous examples of shells, flowers and many more. People’s behavior changes over time. It pulses in someway. Each pulse has circular shape so Fibonacci Arcs are so as well. As you can see on the chart, many of the breaking points are aligned with levels marked by the circles. They give us better insight when to enter and when to exit. In this case we should SELL at around 0.098, reload at around 0.06 – the most important without fear we are below 1/1 level. Once bought wat the previously mentioned level we should sell ETH at 0.078. If someone plays on this pair once would make 30% in a 3,5 months. We put first circle in the lowest level of the 3 following bars. What do you guys think? Do you use it? Do you find it useful? Please do comment, share your thought and don't forget to follow us. THANK YOU FOR ALL YOUR SUPPORT! :) Hugs! WBM Team
Education
by WBM_Team