3 Keys to cryptocurrency trading you’re not using w/real examples

Some of the biggest dangers in trading are the things you don’t think of or don’t know through experience.  That’s where cryptopatterns can help.

Here are three keys we strongly believe in to be a successful long-term trader that have made (or saved) big money many times over the years.

KEY #1 DAILY CLOSING PRICE IS WHAT MATTERS MOST FOR TRADE STRATEGY.

ETH new lows 6 25

We get it. The crypto market never closes — in real life– but it most certainly does close on charts. Every 5 minutes, hour and day another candle or bar is formed on your price charts. That’s the close we’re talking about.  On Poloniex which is a high volume exchange–that close for the daily chart is 8 PM Eastern Standard Time (U.S.) — watch how interesting things tend to happen around that time — it’s no coincidence.

You saw a huge example of “Close is what matters” just yesterday.  What this means is  we give most credibility to closing price on daily chart vs volatile moves that happen during the day.

Key support broke for ETH and BTC last night (they fell to recent lows) as well as other altcoins (ZEC for example) BUT the drop was

  1. with low volume
  2. not “in sync” BTC would drop then bounce, the ETH would drop and recover – big moves down in markets don’t work like that
  3. right after close (8 PM EST) so it didn’t effect “final” price on daily chart and if anything is slightly bullish as many daily charts are showing potential “reversal candles” so far today with generally higher volume than yesterday.

 

KEY #2  MARKET LIQUIDITY  = Is there enough volume to make a real market?

bitcoin dark 6 25

Your technical analysis or news you think matters presents a huge trade opportunity in BTCD — you’re sure this is the next 250% + return and you want in.

So you buy 5 BTC worth –you actually see the price go up as you trade! Of course it drops back down in a hurry. Why?  You’ve just invested 5% of the entire day’s trading volume and are now at the whims of whales and bots who can easily drop the price 50% and get you to bail out before taking BTCD up the 250% — in 6 months.

A good general rule for traders is to look for a history of strong consistent trading volume.  This makes any technical analysis much more reliable.  In addition, staying away from low volume crypto or at least adjusting position size when you realize you don’t want to be at the mercy of a few other traders is key to long term success.

KEY #3 TRADING STRATEGY FOR HIGH  VOLATILITY PERIODS – What will you do if you can’t trade?  THIS WILL HAPPEN TO YOU – ARE YOU READY?

These are from two of the biggest exchanges:

coinbase outage 6 25

poloniex outages 6 25

Outages  and  trades not executed happen all the time, especially during high volatility periods (as we said, all the time in the world of crypto).  Do you have a contingency plan of what you’ll do if you have a huge position in ETH, see it start crashing, want to get out but can’t?

Remember when XRP had it’s huge run?  We saw multiple traders lose everything while trying to do the right thing and cover their short positions–but the platform was jammed and they simply couldn’t get their order executed.  It can (and likely will) happen to you.

So what’s the solution?  Admittedly there’s only so much you can do – same goes for hacking — it’s a risk you have to assume to be in the game. BUT–you can do a couple of things that make sense given the challenges of the new crypto market:

  1.  Minimize margin trades.  There’s plenty of money to be made on straight buys of cryptocurrency.  If your serious about long-term trading, maybe you don’t need 1000% return on your entire investment account each month?
  2. Cut back on position sizes  If your serious about long-term trading, maybe you don’t need 1000% return on your entire investment account each month?
  3. Use hard stop losses — not always a great solution as last week’s Coinbase/GDAX fiasco shows,  but if you insist on playing big then play big responsibly.

 

We have more unique keys for traders including subscribing to our cryptopatterns newsletter.   We’re constantly monitoring the crypto markets to give you insights on how to trade safely and profitably for the long haul.

 

 

 

 

This site is for informational and entertainment purposes only and not in any way intended to be investment or trading advice.  You are 100% responsible for your financial decisions at all times.  It is highly recommended you DO NOT  make any investment or trading decisions depending upon what you read on this blog/newsletter!  All information presented (c) 2017 JBP cons, inc.  All rights reserved.

 

What are “waves” and why should cryptocurrency traders care?

waves

tl:dr?  Key takeaways and a useful chart are at the bottom of this post.

Waves refer to a method for analyzing markets called “Elliot Wave Theory” that says the market “ebbs and flows in clear trends”.  Like everything else in trading analyzing waves can be as complicated as you want to make it, but we like to keep things simple.

Waves are a type of pattern (just like candlesticks, volume and many other indicators create patterns, cryptopatterns considers them all as part of our analysis to “build our case” for moves in the cryptocurrency markets).  Here are 3 keys to waves we use in our pattern analysis that might prove useful in your trading efforts.

1. If you look at investment price charts over years, you can clearly see buying and selling patterns move in waves.

If you know the market moves in waves, and you see these waves repeated over decades and a wide variety of investment vehicles, don’t you think it would be helpful to your crypto trading to know how those waves work and where we are in the “wave cycle”?  We do.

2. Exact wave counts are extremely hard to identify in real time, and there are multiple interpretations of which wave we’re in by simply looking at a single price chart.  

Just take a look at this example and you’ll see:

waves complex

chart source: Safehaven.com

3. KEY: Waves come with certain identifiable “market behaviors” and this is where waves can prove most helpful in assessing probabilities in your trading strategy.

Here is a solid overview of those behaviors–pull out a chart of your favorite crypto and see if you can identify the waves using these behaviors.

wave definitions

What’s the takeaway?  Learn the basics of waves, and be sure you consider them in your trading strategies or you might find yourself buying when there are screaming red flags that say “now is the time to be selling!”

Of course, you can also subscribe to cryptopatterns newsletter and get daily updates and analysis on our take on wave counts along with other important patterns for all the most important cryptocurrencies  as well as newer ones in the market that can give you the edge to trade or invest with probabilities on your side.

This site is for informational and entertainment purposes only and not in any way intended to be investment or trading advice.  You are 100% responsible for your financial decisions at all times.  It is highly recommended you DO NOT  make any investment or trading decisions depending upon what you read on this blog/newsletter!  All information presented (c) 2017 JBP cons, inc.  All rights rese

How (and why) to define your BTC cryptocurrency trades VST ST IT or LT to make money

trading guidelines 6 20

Sure, it’s impressive to read the trader’s post on Reddit bragging about turning $300 into $50,000 trading crypto in a year.  Bitcoin’s skyrocketing – maybe it could be you next?

It happens, but the odds are overwhelming that it won’t happen to you.

So if you’re like the rest of us in the real world who seem to always “just miss” that home run trade, cryptopatterns is here to show you how you can make real money trading cryptocurrency.  It may not be reddit worthy, but it can pay the bills and definitely beats joining the 90% of traders who funded that annoying trader’s $47,700 in profits.

Making money trading crypto for years

For some additional useful reading check this post out:

5 Steps AND REAL TIME TRADE SET UP to profit trading (and losing) in BTC Cryptocurrency now

Part 1: Define your trade 

trading guidelines 6 20

Some additional notes about this table:

  1. What you’re thinking is more key than the investment itself!  You might just think you’re investing $1000, but if you need the $1000 next week to pay your credit card, that’s a whole lot different than investing the $1000 to start a retirement plan.  Same $1000–very different definitions for the trade, get it?
  2. The more you invest, the stronger the case needed.  This is where most of the money is lost by traders.  Jumping into insanely high risk trades without really believing in the outcome– hoping rarely works out well.  If you are a cryptopatterns subscriber you have seen just how much information can be used to “build your case” and get probabilities on your side before you invest.   How much information most traders have no clue about.
  3. The more you invest, the more you want time (and probabilities) on your side. Look, everyone would love to be a professional gambler if they could gamble full time and make huge money. Do you really think that’s how your trading efforts are going to work out?  Will everyone be right and get rich trading?  How about proving you can make ANY money trading for a few years before you go all Phil Ivey on us?  Make your biggest trades/investments the ones you can truly sleep at night holding knowing you’ve assessed the risk, defined your trade and probabilites are clearly on your side.
  4. Don’t trade without defining risk as VST ST IT or LT  Unless you’ve CONSISTTENTLY turned $300 into $50000, now is a good time to build a long-term trading plan that can work for years in the real world of cryptocurrency trading if you are serious about putting probabilities on your side.
  5. Subscribe to cryptopatterns newsletter.  We’re the voice of reason and real world trading education.  We teach you how to win and lose, be consistently profitable with good returns (great vs most investments) and, most importantly, stay safe and stay in the game.  cryptopatterns newsletter is definitely the place to be for everyone who doesn’t routinely turn $300 into $50000 trading cryptocurrency.

PART 2 Position Management Strategy coming soon……

 

This site is for informational and entertainment purposes only and not in any way intended to be investment or trading advice.  You are 100% responsible for your financial decisions at all times.  It is highly recommended you DO NOT  make any investment or trading decisions depending upon what you read on this blog/newsletter!  All information presented (c) 2017 JBP cons, inc.  All rights reserved.

REAL TIME Bitcoin Trade Set Up Shows How to find Patterns and Targets

HeadandShoulder

A basic “pattern” in trading crypto (or other investments)  is a shape with certain characteristics that appears on price charts and indicate a predicable move in price.

A common example that most traders quickly become familiar with is the “head and shoulders” pattern (HS) .  The name says it all as you can see in the pic above.

Over time, patterns have emerged that allow you to predict what happens to price after a HS pattern occurs that gives traders a tradeable “target”. For example, the head and shoulders pattern typically anticipates a bearish result (drop in price):

CAReport_HeadShoulder target

Source for HS and IHS charts: Investopedia

If a price chart shows buying and selling patterns, and the HS pattern = bearish result,  it should make sense that in “inverse” head and shoulders (IHS) = bullish result, right?

inverse h and s

NOTE: subscribers to cryptopatterns newsletter are often shown “volume” patterns in addition to price patterns and you can see an example in this chart – volume typically spikes on breakout of an IHS. That’s an example of “confirming a pattern”

REAL TIME BITCOIN PATTERN AND TARGET ANALYSIS

So can simple patterns on charts be a better predictor of moves in price than the latest crypto news about “halvenings”, miners squabbling about segwit, reddit bitcoin gurus predicting BTC 100000 while mocking altcoins and Goldman Sach’s discovering bitcoin and now sharing expert views?

Yes. Though don’t take that to mean the patterns always work–because nothing always works.  But let’s go to the charts and see what the patterns and targets have to say about what’s next for BTC

BTC IHS 6 18

Notice, the price pattern by itself wasn’t enough to analyze the chart. cryptopatterns is always saying “volume doesn’t lie” and on the first breakout of the IHS Bitcoin didn’t have the volume,, and back price came.  Now we have a breakout with volume.

SO WHAT’S THE TARGET PRICE FROM THIS IHS PATTERN?

Traders are taught that the target for an IHS is = the distance between the head and the neckline, so here’s what that looks like in the case of our real time BTC trade:

btc ihs target

Targets can change based on where traders draw their lines so they are only approximations, but they can give you a “target range” that can be very useful for trading.

IS TRADING PATTERNS THAT SIMPLE?

Is BTC heading for $2880? What about that article today saying BTC has no future?  More importantly what patterns and indicators can emerge that can confirm the target is likely to fail or be reached,  or perhaps skyrocket past it (which BTC did multiple times from $850-2900)?

Obviously, there’s no guarantee BTC will reach $2800 because of a certain shape on a chart (there are many more patterns than HS and IHS).  If it were guaranteed. 90+% of traders would be making money instead of losing it which is what is really happening out there (not just in crypto–in all asset trading).

EXTRA CREDIT: Study the LTC charts from the last few days to see if you can now see how cryptopatterns identified Litecoins breakout move.

But for answers to how gain an edge in knowing where BTC is heading so you can invest in, trade, or just understand the BTC and Altcoin markets better, studying patterns and targets is essential for a trader who wants long term success.  We also believe subscribing to cryptopatterns newsletter can be a helpful (and profitable?) part of your studying,  as there is far more to the pattern and target story than most ever dreamed possible.

This site is for informational and entertainment purposes only and not in any way intended to be investment or trading advice.  You are 100% responsible for your financial decisions at all times.  It is highly recommended you DO NOT  make any investment or trading decisions depending upon what you read on this blog/newsletter!  All information presented (c) 2017 JBP cons, inc.  All rights reserved.

 

BTC ETH Crypto: Healthy Retrace or FULL Reversal? How to tell the difference.

This site is for informational and entertainment purposes only and not in any way intended to be investment or trading advice.  You are 100% responsible for your financial decisions at all times.  It is highly recommended you DO NOT  make any investment or trading decisions depending upon what you read on this blog/newsletter!

Found this great table that you’ll likely refer to often in the next few days/weeks – we have been anyhow when considering ST IT and LT patterns — and it’s served us well….hope you find it helpful…

retrace or reverse table

source: http://www.investopedia.com/articles/trading/06/retracements.asp

5 Steps for successful cryptocurrency trades – Scaling IN and OUT

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When trading the probabilities of cryptopatterns, managing high probability trades successfully is more difficult than finding them.  Getting in or out at the wrong time can be the difference between huge gains and losses, even if you know where the crypto is going!

Here are some guidelines to  manage the funds in your trading account for long-term trading success.  Of course these can and should be adjusted to your personal goals and risk tolerance.

You can see this post for terms and abbreviations you don’t recognize or understand:

Cryptopatterns Basics: Terms, Abbreviations

tl:dr

Step 1  Define your funds

Step 2 Define every trade

Step 3 Determine each trade’s “buying strategy”

Step 4 DEFINE RISK WITH SPECIFIC SCALE OUT STRATEGY

Step 5 Subscribe to Cryptopatterns to trade with the probabilities on your side

Total of your trading account =       100%

Step 1 Define your funds   example:

LT Trading Funds                                         35%

IT Trading Funds                                         35%

ST Trading Funds                                        30%

VST Trading Funds   (Gambling)              5% (NEVER MORE THAN 5%!)

Step 2. Define every trade:

Define as LT IT or ST.   You can use more than 1. Example: You want to buy Bitcoin as both an IT and LT trade.  This means you would like to cash some out fairly soon and hold some for the “long term” (months or years)

No trade can be more than 50% of the defined funds.  

Example: IT and LT Bitcoin trade

up to 50% of IT funds

up to 50% of LT funds

Step 3 Determine each trade’s “Buying Strategy”

Example: Using 50% of IT and LT funds to buy bitcoin

  • 10% when you decide to make the trade (IF NECESSARY TO KEEP FROM RUSHING IN)

then break up rest of funds into 3 pieces

  • Invest 20% more before “ideal entry”
  • Invest 50% right in the ideal entry range
  • Hold back 20% to add once trade pattern is “confirmed”

Of course you could also simply invest 100% at any price near the ideal entry range if you have the discipline to use a specific stop loss that will clearly define your risk on the trade.  Many traders cannot manage stops which is why Step 4 must be completed before starting any trade.

 

STEP 4 DEFINE RISK WITH SPECIFIC SCALE OUT STRATEGY

If your trade turns profitable – you want a “position management strategy” We’ll cover that in a future post.  We also have previously covered guidelines for expected returns for ST IT and LT trades — we’ll update again soon too.

Here we cover the more important strategy which is – what if you start losing money?

THE MOST IMPORTANT STRATEGY IS

DON’T PANIC

That’s easy for those not losing money to say but very hard to do when you see your account balance plummeting.  This is why you must have a plan before you trade.  Here’s one way to do that.

Almost as important as don’t panic is:

Never trade funds you cannot afford to lose. AND Your risk on a trade should never be more than 50% of your anticipated profit.

No trade should be entered if you are not clear on the price where “something else is going on” = you’re very likely wrong and the trade has a low probability of reaching your profit targets.

Whales and bots know where those “trade probably isn’t going to work” points are too — so you need to be a little flexible.

This is why traders always say “they hit my stop then took off without me”  Traders always say that, right? Oh, I guess it’s just me.

So a scale out strategy might look like this

Example: BTC sell range 2740-2780.

Try to set stops on your trading platform so there’s no risk of freezing up when the time comes to sell.  If for some reason you can’t set stops you want to have this all thought out well before you have to act–then just act.

Sell (close out if short) 25% of position if top of stop range hit (2780 in example) – don’t wait, just sell 25%. Prove to yourself you can be disciplined and sell when your plan says to sell.

Sell 40% when the BOTTOM of your trade range gets hit

Sell the final 35% if the price isn’t back inside your stop range by the end of the day. Sell immediately if drops below bottom of range any time after that day.

NOTE: This last piece of scaling out comes with HUGE risk as price can just keep dropping — so you might want to establish additional rules for scaling out in “crash” situations

It’s a big step in succeeding LONG-TERM if you recognize when your plan didn’t work and taking the actions you decided to take when you were calm and logical about how the trade should work.  

If you follow the above guidelines, or a similar scaling strategy that KEEPS YOU SAFE and works for your personal trading situation, you won’t stress about losing trades, and, more importantly, you’ll have lots of funds available for the next trade — and there is absolutely ALWAYS another trade to be preparing for by studying the charts and, of course:

Subscribing to and reading cryptopatterns newsletter so you know the probabilities  

This site is for informational and entertainment purposes only and not in any way intended to be investment or trading advice.  You are 100% responsible for your financial decisions at all times.  It is highly recommended you DO NOT  make any investment or trading decisions depending upon what you read on this blog/newsletter!