Things we will cover:
Trading in crypto • Candlestick patterns • Swing failure pattern • Fibonacci retracement • Elliott wave
We won't be covering RSI, MACD, Ichimoku, CCI, and so on because these are things you can learn to see without indicators as you study more about technical analysis.
What is Trading in Crypto?
Trading in cryptocurrencies involves buying and selling digital currencies like Bitcoin, Ethereum, or other tokens with the aim of making a profit. Traders use online platforms to speculate on price movements, hoping to buy low and sell high or profit from short-term price fluctuations.
Candlesticks
Candlestick charts are a fundamental tool in technical analysis. They originated in Japan in the 18th century. A single candlestick represents a specific time period and consists of four main components: Open, Close, High, and Low.
Bullish Engulfing Pattern
This pattern occurs when a small bearish candle is followed by a larger bullish candle, completely engulfing the previous candle. It suggests a potential bullish reversal.
Hammer
A hammer is a single candlestick with a small body and a long lower shadow. It often appears at the bottom of a downtrend, indicating a potential reversal.
Morning Star
A bullish reversal pattern consisting of three candles: bearish, indecisive, then bullish. This pattern signals a potential uptrend.
Bearish Engulfing Pattern
A small bullish candle followed by a larger bearish candle, suggesting a potential bearish reversal.
Shooting Star
The opposite of a hammer with a small body and a long upper shadow, indicating potential bearish sentiment at the top of an uptrend.
Evening Star
A bearish reversal pattern: bullish candle, then indecisive, then bearish. Signals a potential downtrend.
Introduction to Swing Failure Patterns (SFP)
Swing failure patterns are price patterns that traders use to anticipate potential trend reversals. Key elements to focus on: Swing Highs and Lows, Price Behavior, Candlestick Patterns, and Volume.
Swing Failure at a Swing High (Bearish)
When the price approaches a recent swing high but struggles to break above it, forming a bearish reversal candlestick pattern, this suggests a potential reversal to the downside.
Swing Failure at a Swing Low (Bullish)
When the price approaches a recent swing low but fails to break below it, forming a bullish reversal pattern, this implies a potential reversal to the upside.
Introduction to Fibonacci Retracement
Fibonacci retracement is based on the Fibonacci sequence. The key levels are 0.236, 0.382, 0.500, 0.618, and 0.786. Traders use these levels to identify potential reversal points.
The Golden Pocket
The Golden Pocket is a specific Fibonacci retracement zone formed by the 0.618 (Golden Ratio) and 0.786 (Silver Ratio) levels. Price reversals commonly occur in this zone.
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Introduction to Elliott Wave Theory
Elliott Wave Theory predicts future price movements based on recurring wave patterns: Impulse Waves (1-2-3-4-5) move with the trend and Corrective Waves (a-b-c) move against it.
Importance of Risk Management
Capital Preservation — protect your trading capital. Emotional Control — avoid impulsive decisions. Consistency — assess performance over time.
Key strategies: Position Sizing, Stop-Loss Orders, Diversification, and maintaining a Risk-Reward Ratio of at least 1:2.
Basic Trading Strategies
- Trend Following — trade in the direction of the prevailing trend
- Swing Trading — capture short to medium-term price swings
- Buy and Hold (HODLing) — hold for the long term
- SFP & Fibonacci Golden Pocket Indicators — use our premium indicators for day trading
Conclusion
There is no 100% winning in trade. You must get used to accepting your loss. If your strategy doesn't work, try it with minimum amount. Always record your trades and study the market.