- in an upward trending market, bullish TA works and bearish TA fails.
- in a downward trending market, bearish TA works and bullish TA fails.
To determine the trend, use moving averages, channel S/R, and price highs/lows.
A good starter to determine trend is to use the 200ma. You need to see higher highs and higher lows, even on your trade timeframe. For example, if there are higher highs on the 1h and 1d, but on the 1m you're seeing lower highs, don't trade until you do see at least one.
If you're trading into a falling wedge, the trend will be down on the minute charts, but make sure the trend is up on the hourly charts, or the pump just won't be worth it.
Bullish TA falls apart in a bear trend, and bearish TA fails during a bull trend. Fake outs, dead cats and sluggish horizontal resting periods are common.
This is the second most important rule after #1, and the hardest to follow by far. You should choose an exit where you decide you are wrong well before you enter a trade. If the trade breaks an important support or switches mode from upward to down, no matter what the loss is, you must exit. This for me was the single most difficult lesson to learn and I lost a lot of money due to breaking it over and over.
Small losses can turn into huge losses in literally seconds. Never, ever let this happen. Choose a maximum loss you are willing to sustain per trade and if you go beyond it, drop the trade and walk away - come back to the chart with fresh eyes in ten minutes and re-assess.
You are not a wizard. Sorry. You cannot predict the future and the charts will not help you in doing so. You are merely attempting to create a scenario where you have the best probability of favorable price action. Never try to guess the bottom. There's always a deeper bottom.
There are only really 2 or 3 decent pairs to trade each day and many times there's none. If you trade ANY of the others, scalping will lose you money, every time. You need to be able to enter and exit the market on a pindrop.
Generally, a coin will have some great FA news and it will be bullish all day, the excitement builds on itself. This is ideal for trading.
Most people leave trades unattended because they are down, not because they are up. This should legitimately never be a scenario. Especially in a bear market, the odds are deeply against you. If you are in a comfortable position with your trade, and you need to exit, sell or stop loss directly beneath on a move up. Don't stop loss during consolidation as you're likely to get stopped out by stop hunters, just sell instead or wait for a move up and then stop loss.
Setting a stop generally means it will hit, accept this.
Hard stop losses (versus manual soft stops) are not good as profit earning strategy, they are merely protection against catastophic loss. You are taking an 80% chance it will hit for a 20% chance the coin will moon while you're away so high that the stop never touches. It's extremely unlikely.
Remember that when a coin goes down, buying interest increases and so does the chance of reversal so it's highly highly likely that your stops are not advantageously placed no matter what you do. If you buy and place a stop 2% down, and it hits, chances are good that the price will rebound and you'll return to a loss.
The best way to utilise stops is to use them if you really need to physically leave and you're already in a decent position. If you're just on break even, SELL. Setting a stop is throwing money away and don't let anyone tell you otherwise, it's just statistically infactual.
Never double down past your agreed upon baseline. Only double 'up' as the price goes up, if you're seeing aggressive buying action.
An aggressive candle is one that shows high volatility in one quick sell or buy. Large sell orders in the L2 buying up the book, etc. If these are green during a long, consider not selling until they cease. If they are red however, and ESPECIALLY if the price wicks below a support you've agreed upon, sell immediately. The risk is not worth it.
Candle closes really do send a sign to the rest of the market, and you'll probably see more activity just before a candle close on certain timeframes, in order to manipulate the price. The 1m and 1h in particular.
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Always look for /convergence/. Indicators that overlap each other, for example price action bouncing off EMA or bullish divergence + fib bounce.
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Always look for /divergence/ - on price/buy book vs rsi/macd, divergence can also occur when price is uncertain vs rsi bouncing up. Commonly accepted divergence patterns aren't enough, you have to understand what divergence is doing eg. more buy averages vs what is being depicted on the chart.
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The more esoteric the trading skill, the less likely it is to work. Most scalpers use price action a lot and perhaps RSI and MFI including divergence and convergence. Elliot wave and so on just doesn't seem to work very well to pick wave oscillations in real time. If you know it, keep it in mind, but don't let it be the first thing to inform your choices. Nothing beats the simple logic of price action.
- When bitcoin is dumping, alts drop. When bitcoin is pumping, alts drop drastically. The time alts prosper is during bitcoins slow, organic growth. When bitcoin is sideways, coins pay more attention to fundamentals. In the bear market, old tricks (coin listings, mainnet launch, partnerships) don't matter any more, but new coins or public-facing utility are raved over.