What goes up must come down! – How I use ‘FIB Extension’ – Fibonacci Extension

Bull runs are great, aren’t they? Unfortunately though as the title says the old adage is true.

It goes up it comes down = volatility.

Bitcoin is extremely good for this and makes trading fast and fun, if you’re on the correct side of the trades.

Bitcoin, and cryptocurrency in general, is the stock market… On steroids, wheeeeee.

There can be lots of money to be made/transferred to the educated, or lucky, but that would quickly run out. Knowing where to buy and sell intentionally is the way forward.

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For me this is the most essential trading tool. Fibonacci Retracement – Using support and resistance.

I remember looking at my first Bitcoin chart and thinking “Oh, awesome!” – Now what? Especially when Bitcoin was touching $19,000 (I’m not bitter about not buying £100’s worth still, honest!)

I believed for a long while that these movements were fairly random and there must be some sort of luck involved in managing to work out where to place a buy or sell trade. I considered it to be ‘trading bots’ automatically knowing when to trade.

However, I have a very determined personality and refused to give up looking for the “key” to trading. These movements were too structured to be just luck.

If only I could work out what this is doing, where is it going?

After months of searching I actually found a pretty effective way.

Continue reading “For me this is the most essential trading tool. Fibonacci Retracement – Using support and resistance.”

Elliott Waves – Sounds boring, right? I can assure you it’s not…

Somebody called Ralph Nelson Elliott, who was a lot smarter than me, worked out that that all tradable assets on the stock market move in waves. This was I believe in the 1930’s way before the time of Bitcoin and cryptocurrency.

The good thing for us though is that the same trends still occur in cryptocurrency trading. Why? Well, it is all to do with everyone looking at the big chart together.

When we’re all working out our support and resistance lines, and looking at channels etc, we’re all buying and selling at particular points.

This creates a “wave” effect and equals an increase in price and retracements.

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Sorted, I understand the indicators. Show me the next lot of fancy stuff! – TA, Trading Analysis.

Now that we have established a price direction using cryptocurrency indicators, we’re going to have to see if this direction is following any trading trends.

Bitcoin, similar to the stock market, has certain ways in which the value is traded. Imagine there is a big chart and everyone has seen a trend together and are following the same lines and levels. It is this that we need to identify as well.

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I’ve got me a TradingView chart. What do I need next, what are these indicator thingamajigs?

The main thing when trading (or looking to buy a cryptocurrency at a really good entry point) is that you’re going to want to identify the direction that a coin is traveling in. Now, even though this sounds easy I can assure you it really isn’t.

Cryptocurrency like all markets is 50/50, most of the time. Either traveling up or down.

There can be times though when a coin just travels sideways, known as “Bart” or “Barting”. This kind of sideways action gets its name after the Bart Simpson character’s hair style. Short movements moving only slightly up and down for a period of time.

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