I recorded a video analyzing bitcoin's recent drop from 9800 to 9330 by explaining some technical concepts so that beginners in TA can get what I'm talking about. See the video at the end of this post. Below are the technical concepts I covered and explained in more detail in the video.
My Bald Head: It's the first thing you'll notice when you see my video. I just wanted to prepare you for this shiny sexy baldiness.
Your feelings: Believe it or not, emotional intelligence is one if not the very most crucial skill to develop to become a successful trader. Whenever you are speculating, you will inevitably encounter losses, no matter how good of a trader you are. Unless you recently replaced your heart and head with cables and a microprocessor, your human feelings of frustration, anger and disappointment will dawn on you. It's crucial that you take this into account when trading. If you've booked a profit after having made some losses which made you feel like crap, don't be greedy, take that profit on that trade to create more confidence in yourself.
Downtrend: When the chart marks lower highs and lower lows on a certain time frame. We are on a down trend on the weekly chart but on an uptrend on the daily chart for bitcoin right now.
Volume: If a price move is accompanied by volume as the recent one hour dump was, it gives that move more strength, more credence. It increases the probability that we will see the price move further in that direction.
Support Level/Zone/Area: This is one of the most common TA concepts, likely the first one you will hear about. A support level is not a technically accurate term despite being used ubiquitously. It should not be thought of as a place where price will definitely bounce from. Think of it as a "potential" support instead. This principle is emphasized in "The Art and Science of Technical Analysis" by Adam Grimes. What is meant by this is that there are no certainties in trading so it's not technically a support, it's a potential support.
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Disclaimer: Note that this article contains referral links and I may earn a small commission for my effort in spreading the word about crypto if you click on them. This is not financial advice. Trading presents financial risks. I cannot take responsibility for losses you might incur.
