This chart is looking at bitcoin from a purely trading aspect taking away indicators and just focusing on the price action.
first we establish the overall high and low in the range (in yellow)
next we establish the current price trend over the last few days (in red)
we can see bitcoin has recently broken out of smaller consolidation pattern (in white) and has bounced of previous long term support at 40K. it seems bitcoin will retrace back to the previous consolidation zone. a bounce off the lower support turned resistance (red arrow) would be a confirmation of a going short back to 40K at the least.
if bitcoin can break back above this lower resistance (in green) area then we can expect a move back towards the top of that consolidation zone before being rejected or breaking out above which would be very bullish probably leading to a huge sentiment shift in the short term.
if you happen to be in a trade below these white zones i would take profit at each resistance . the point is to lock in gains afterall.
few tips i wanted to pass along to new traders.
horizontal support and resistance is key to trade setups and take profits. DO NOT trade based off of diagonal lines as they are more subjective and can be changed to make the picture more bullish or bearish which will cause bias.
you have to remain unbiased and the best way to do that is to establish important horizontal support and resistance levels on both high time frames and low and pair those levels with indicators like RSI and MACD for instance to find the right time to enter and which position to take.
always make a plan before you trade and always have a stop loss.
stick to your plan and your stop loss and leave your ego at the door. no one is seeing this but you its ok to lose the small one to catch the big fish.
preservation of your bank roll is key. never gamble never go on a whim and only play with what you can afford.
first we establish the overall high and low in the range (in yellow)
next we establish the current price trend over the last few days (in red)
we can see bitcoin has recently broken out of smaller consolidation pattern (in white) and has bounced of previous long term support at 40K. it seems bitcoin will retrace back to the previous consolidation zone. a bounce off the lower support turned resistance (red arrow) would be a confirmation of a going short back to 40K at the least.
if bitcoin can break back above this lower resistance (in green) area then we can expect a move back towards the top of that consolidation zone before being rejected or breaking out above which would be very bullish probably leading to a huge sentiment shift in the short term.
if you happen to be in a trade below these white zones i would take profit at each resistance . the point is to lock in gains afterall.
few tips i wanted to pass along to new traders.
horizontal support and resistance is key to trade setups and take profits. DO NOT trade based off of diagonal lines as they are more subjective and can be changed to make the picture more bullish or bearish which will cause bias.
you have to remain unbiased and the best way to do that is to establish important horizontal support and resistance levels on both high time frames and low and pair those levels with indicators like RSI and MACD for instance to find the right time to enter and which position to take.
always make a plan before you trade and always have a stop loss.
stick to your plan and your stop loss and leave your ego at the door. no one is seeing this but you its ok to lose the small one to catch the big fish.
preservation of your bank roll is key. never gamble never go on a whim and only play with what you can afford.