Fundamentals of Trading

I FOLLOW TWO TYPES OF TRADING STRATEGIES: TECHNICAL, AND FUNDAMENTAL. The fundamentals won't help you with timing, price is driven by behaviour, not logic. That is where technical trading comes in. Technical trading consists of two categories: position trading, and swing trading. They both have their own tactics which should not be confused.

With position trading, I follow a yearly cycle, or even a multi-year cycle. On the other hand, swing traders should follow a daily chart. Candles represent the daily close, while pin bars are shorter actions.

d4rkEnergY writes: "If you want to become a good and successful trader, you need to think like this as a combination between chess and poker." It is a nice quote, but he has a more profound view that technical signs are not fatal warnings, but tools we can manipulate, like burning paper. On another post, d4rk explains: "Trading is basically like quantum-mechanics. Have you ever heard about Heisenberg's Uncertainty Principle? It is one of the most famous ideas and principles in physics. It tells us that there is a fuzziness in nature, a fundamental limit to what we can know about the behavior of quantum-particles and, therefore, the smallest scales of nature. Of these scales, the most we can hope for is to calculate probabilities for where things are and how they will behave."

It is interesting that you as watch features evolve, what looked at first like a declining channel, turns into an ascending triangle. There might be something of String Theory to this... the trade could be any number of patterns at the same time, vibrating at different positions of the string. looking reading it right. went off paper burning about 10 years ago.

Juanchobanano accurately predicted the fall of Bitcoin's price, after its peak in December 2017, to US$6050 a month or two later.

Nice idea, but I went off paper burning about 10 years ago.

Marc P Markets says price never lingers beneath resistance lines in bear markets. Conversely, price is never content to bounce along the bottom of resistance lines in a bull market... it will rear on up.

Triangles
Ascending Triangle // Descending Triangle // Risk Reward Ratio

From an Elliott Wave perspective, triangles must contain at least two lower highs and two higher lows. Therefore, at least four points are required to construct a triangle (and, ideally, there should be 6.) That said, don't make a move until the triangle is at least 3/4 complete.

According to Trading Strategies, triangles can be traded on any time frame, with no indicators required.

Descending triangle, MaidSafeCoin, 2020.

In an uptrend, old peaks will tend to act as support when price breaks through them.

Fibonacci Retracements
Some common levels are 23.%, 38.2%, 50%, 61.8%.

Look for fakeouts.

Time To Pay Attention: Famed Bollinger Band Creator Comments On Bitcoinhttps://t.co/20eGsyMbz8

With Bitcoin trading sideways for so long and volatility dropping to such uncharacteristic lows, crypto analysts are watching the Bollinger Bands closely.
Even the tools creator ... pic.twitter.com/fSWoqyklGM

— TradingBTC (@tradingbtc1) July 16, 2020

Bullish Divergence
: See here.

Venzen Khaosan made the observation, in 2014: " This up-sloping support line can be interpreted as Bitcoin’s minimum growth trajectory. It is currently at $120 which means it has doubled since a year ago, and this doubling continues at an annual pace according to the support floor’s present inclination..."

Rising price paired with declining volume is a bearish signal.

Stop Losses

ONCE UPON a time, I had the general trading rule: "Never sell at a loss". I now realize this was naïve. Price can drop at any time, and might never recover to its previous highs. Stop losses can save you from crashes. If price crashes, you will be able to make purchases at lower resistance levels.

As one Steemer wrote, "If you want to protect yourself from risk, you need to set a STOP LOSS order."

Stops are what differentiate a novice trader, from a pro.

To determine your stop losses, consider the reward/risk comparison.

Finding reliable trading sites is the main problem. One should be aware that exchanges crash regularly taking all your coins. This is a factor of Exchange Rot.

GENERAL RULES
2. Never chase a rally.

3. If I find myself wondering if I have understood the nature of the market properly, that it is a sign this market is Too Good to be True (TGTBT). This is often a red flag that needs further investigation!

Due to the explosive nature of price rises, automatic selling is more of a priority than automatic buying. Basically, once a coin has entered the Fourth Quadrant, I should start booking sales on exchanges.


TACTICS
Rallies
If I make three profitable trades from the one rally, my strategy will change. From this point on, I need to have at two potential sales pending, before executing a trade.

If I continue to make another three profitable trades from the same rally, I will need to have at least three potential trades pending, before executing a trade.

That said, if I fail to make a successful trade within two months of the activation of this change, I can assume that the rally is losing st the default mode.

CASCASING SELL ORDERS

Here is a table showing the 10 grades of sell opportunities for altcoins, for all three fund components:

1. 10%.
2. 25%.
3. 50%.
4. 75%.
5. 100%.
6. 200%.
7. 500%.
8. 1000%.
9. 2000%.
10. 5000%.

CASCASING SELL ORDERS
Here is a table showing the 10 grades of sell opportunities, for all types of cryptocurrency:
1. 10%. 2. 25%. 3. 50%. 4. 75%. 5. 100%. 6. 200%. 7. 500%. 8. 1000%. 9. 2000%. 10. 5000%.
TOTAL POTENTIAL GAIN: 896%.

Here is a table showing the 10 grades of buy opportunities, for Bitcoin:
1. -10% (GAIN: 11%.) 2. -20% (GAIN: 25%.) 3. -30% (GAIN: 42%.) 4. -40% (GAIN: 66%.) 5. -50% (GAIN: 100%.) 6. -60% (GAIN: 150%.) 7. -70% (GAIN: 233%.) 8. -80% (GAIN: 400%.) 9. -90% (GAIN: 900%.)
TOTAL POTENTIAL GAIN: 192.7%.

One could therefore identify six realistic long targets: US$8000, $7000, $6000 (AUS$8000), $5000 ($7000), $4000 ($5000) and $3000 ($3600). If I had AUS$3600 to spend, I could enter long at each stage with $600, buying: 0.057B, 0.064B, 0.075B, 0.0866B, 0.114B, 0.12B and 0.166B. That's a total of 0.682B!

Now, considering that I am limited to 1/2015th of my CJ cash fund for each Bitcoin purchase, it might be difficult to accumulate the desired levels at the lower targets. Buying $800 of Bitcoin at US$8000 should be easy, because that will remain in the price range for another 18 months. However, I have only another 6 months to buy Bitcoin at $4000. Therefore, it is only natural that buy orders at this level to be 3 times the value (that is, they can be worth 3/20th of the CJ cash fund.)

If I am able to buy an asset at a below target price, I will then be able to sell this asset for a small profit in the event that price is bumping along the bottom of a trough, so long as I immediately place a new long order at the given target price.

DECEMBER 23 2017: 10% SELL TARGET.
I bought 0.006B for AUS$117.
That's AUS$19,500 each!

JANUARY 5 2017
I sold 0.006B for AUS$131.
That's $14 profit!

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