Topic: Cryptocurrency trading for beginners. - page 4. (Read 888 times)

Very detailed and easy to understand. Gonna try to put some of this into practice in a near future. Thanks!

If allowed I want to translate this post, many people will read it and will be useful for anyone who wants to start trading or learn trading. certainly not in this forum, I will post it on my blog.
thank you very much if allowed.

Yes, i agree with mate you are right and your points of facts are really good to be noted. Fundamental analysis is not up to the mark as it lacks the right and good information by which we can do fundamental analysis in detail. And yes, now the best tool in our hands is a Technical analysis which can help you a lot if you take it seriously and trade with it seriously. This post is a must watch for beginners who are already trading in the market but not as successful traders do it.

First of all, a commendable work with this thread @AlexZHankok.

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Here are my tips for newbie traders that are interested in day trading.

Whenever I day trade, I make use of one very important indicator. It is called the Moving average convergence divergence trend-following momentum indicator, in short MACD.
Since most crypto trades are done by bots these days, you will always find a recurring pattern of Buy's and Sell's. This buy/sell trend is best described by a MACD indicator.



All you have to do is make sure you find the repeating patterns and the most extreme points (crests/troughs) of swing.
I always buy at the deepest troughs and sell off at the highest crests of the MACD curve. You can only judge this by observing the trend for a few hours.
Now, remember, MACD will always show a wave-like structure even when the market is in a downtrend. So to best ascertain if you should buy or sell, you need to also take a look at the market order depth.

Here you can see that the cumulative bids are way higher than the cumulative asks.



Which generally means there's a lot of buy orders compared to sell orders.
This is ideally the best time to buy.

But be careful, many coins have a huge buy wall just to entice new buyers, as soon as people start buying, that buy order is cancelled and people sell off in panic. (This is also a form of pump/dump)

So observe the market pair very well before you invest.

Thank you for your comment. In the near future I will write about a set of tools in trading and computer analysis of the market.

Looking forward for your supplementary posts. and thank you for sharing your knowledge to us especially for beginners like me. it's very useful and when i am already capable i wanted to try trading too.

Thank you so much for your comment and merit. I hope that it really will be useful for beginning traders. Gradually I will supplement this topic.

This is really useful for many new crypto users who will start trading. With this useful writing I give you some merit. They can start learning with all this especially with people who are very blind to the crypto world.
Good work.

Coming soon: computer analysis, tools for trading, basics of fundamental analysis and another.

1. Add tools for trading https://bitcointalksearch.org/topic/m.33320761

Technical analysis is something without which it is impossible to predict the movement of prices. The analysis is made on the basis of understanding the psychology of the market and monitoring the behavior of the price of a particular cryptocurrency.

What should one remember about TA?
 1. All factors affecting the price are already included into the schedule;
 2. Price always moves in the trend;
 3. History repeats itself.

Therefore TA is most important on cryptocurrency markets, rather than other tools. The market itself is still very young, so that you can use only one fundamental analysis and very volatile, because at the moment its capitalization is negligible compared to other markets. In addition, there are a large number of newcomers, which primarily use technical analysis.
 As the practice of many successful traders, such as The Wolf of Poloniex, Bob Vulgaris or Whale Panda, is, the basics of TA are much more effective than complex elements, as almost everyone uses them, and the basics of TA behave like self-fulfilling prophecies.
Here's a small tip - all ingenious is simple and everything is simple genius!

What can be attributed to the basics of TA?
1. Trend lines: support and resistance levels;
2. Using RSI, SMA;
3. Patterns (graphic: figures: flags, double bottom/top, head and shoulders, wedge, pennant, candlestick patterns)
Having disassembled these simple TA tools, you can feel like a superman in the cryptocurrency market.
Let's take a closer look at them:


Trend is our everything. All technical analysis, its basis (Dow theory), all this is based on a key understanding of the fact that the price always, in one way or another, moves in the trends. And there is no easier way to define them than simple trend lines.
How to build a trend line?
The line is constructed very simply. One minimum or maximum value is taken and connected to the other, after which the line extends further. Voila - our trend line is ready.
To build it, you need at least two maximum or minimum values. Remember! For a trend up the line is drawn down; for the trend down - up.

The main function of trend lines is to work as support and resistance.

As long as the price is above the trend line, with its growth and under the trend line, when it falls, the trend is considered strong and stable. In the same place, you can expect a rebound in prices from these inclined levels. When the price crossed the line - then the trend is complete.

How to determine the movement of prices on the trend line?
- Assess the strength of the support / resistance lines. To do this, it is enough to see how many times the price of each line was knocked. If we see 7 rebounds from the resistance level and only 3 rebounds from the support level, then most likely, the price will go down.
- Additionally use indicators such as RSI
- Analyze the movement of prices on different timeframes. The error will be analysis only in a small time interval. So you will not see the movement of the price entirely.
- Work off the lines. The main problems of newcomers is that they are not able to spend at least a month working on the development of such lines or other tools of TA.


RSI is an indicator that has one line and serves to determine the strength of the current trend, as well as possible points of its turn. RSI compares the absolute value of price growth for a certain period of time with the level of its fall for the same period. The result of the calculations is displayed in the form of a curve on the chart with a range of values ​​from 0 to 100%. Standard parameters of RSI: time period -14, overbought zone -70%, oversold zone -30%. Accordingly, if the market is for a long time in the overbought or oversold zone, a turn is likely

Patterns are stable, repetitive price models, the appearance of which indicates that we have a positive probability that, following the appearance of such a model, the market will continue to move in a pre-determined and well-known direction.
In other words: the patterns can tell us whether the current market trend will continue or it will reverse on the contrary.

Patterns are divided into:
- Figures of chart analysis;
- Candlestick combinations;
- Fractals;
- Statistically significant price patterns.

For a beginner this is too big amount of information, so we'll just look at the basic chart patterns and candlesticks. The rest at the initial stage is simply not necessary, the main thing is not to complicate things!

Figures of the continuation of the trend:

the flag, the pendant are the classic figures of the continuation of the trend. Breakdown of the upper limit is a signal to continue the trend. The formation of a figure should also be supported by the volume of trades typical for it.

Figures of the fracture trend: head and shoulders, double top and double bottom. When a fracture of the trend is formed on the market - this means that we have a high probability that the current trend will change its direction.

Figure head and shoulders:

a strong indicator of trend change, the more it is, the more likely that you have correctly defined the pattern. The usual head and shoulders - a bearish indicator, means a price drop. Inverted H&S predicts further growth. The signal for this figure is the breakdown of its base or the so-called neck line. When this happens, we can expect that with a high degree of probability the current trend will change.

Figure double top/double bottom:

is also quite common and popular figure of the fracture trend. This figure also applies a signal if the price overcomes the line of the base of the figure.
 

are combinations of Japanese candles, the appearance of which shows us that the market is very likely to reverse the current trend to the opposite.
Among the basic patterns of candlestick analysis, I would single out: bullish or bear absorption and the morning and evening stars.

The figure of absorption is bullish or bearish:
They give a powerful signal to reverse the trend. To form these figures, you need three conditions:
1. The body of the first candlestick should be smaller than the body of the second;
2. The body of the second candlestick should cover the body of the previous one (the body of the second candlestick may not overlap the shade of the first candlestick, although this situation is an even stronger signal);
3. The second candlestick should be opposite in color to the first one.
Strong signal - when the candlestick completely covers the price range of the previous day - from the minimum to the maximum, and not just the body of the previous candlestick.

The candlestick combination morning/evening star indicates a high degree of probability of a trend change. The candlestick combination consists of three candlesticks: the first candlestick is a growing/falling candlestick with a long body followed by a candlestick with a short body. The third candlestick is falling/growing and its body covers a significant part of the body of the first candlestick.

It is important to know! Candlestick analysis works best on long-term time intervals, such as: days, weeks, and months. The most optimal period at which candlestick combinations give the most reliable reversal signals are weekly time intervals.

I would also like to add that trend lines and patterns are the basis of the basics and it is necessary to understand these points in great detail. I have not covered a lot of subtleties: the location of the contact zones on the line, the angle of inclination, the internal trend lines, the breakdowns; other patterns of trends, etc. All this is a great material for self-study. Regarding candlesticks, I would recommend the book of Gregory Morris - Japanese candles.

Well, at last a couple of tips:
 -Do not trade too much. People often lose money constantly buying or selling a coin. Patience is the key characteristic of any professional trader.
 -Never hurry! The main thing is a clear, deliberate and unhurried analysis. The market will not run away from you.
 -The fear of losing everything or the syndrome of lost profit. I described these errors in the previous article. I advise you to read it again. https://bitcointalksearch.org/topic/m.29236037
 -Follow news, use the calendar of important key events. I will write about this later.

Friends, I welcome you, I'm very glad that the previous article was useful for many https://bitcointalksearch.org/topic/m.29236037, so I decide to write a little more about trading and investments.

Trading for a beginner is a dangerous thing, so everyone should decide for themselves: not to be a beginner, or not to be a trader. Why is that?
Here are a few facts:
 1. Cryptocurrency market is highly volatile, the rates change constantly and it is almost impossible to predict the price movement up or down.
 2. Cryptocurrency market is practically not subject to fundamental analysis. Basically, this is a market relationships, or the manipulation of the market by large players.
 3. Cryptocurrency market does not have a transparent information background, no one can be 100% sure of it. Very often it happens: there seems to be believable news, but in fact it was just a market manipulation, for someone's re-purchasing or information was just incorrect.

If the newcomer wants to succeed in trading, he should study in detail 6 tools for analysis:
1. Basics of technical analysis
2. Computer analysis
3. Use of tools for trading
4. Basics of fundamental analysis and analysis of market movements in the past.
5. News
6. Cryptocurrency technologies (whether there is in general a sense in this or that technology, whether it is useful to a society, whether carries something new or it is the next fork of what that of coins).

To become a professional trader you will have to learn a lot, practice a lot, plunge deeply into the market, conduct a certain number of transactions, survive ups and downs, as well as incur certain losses.

It is this approach will allow eventually succeed and become a successful trader. Learning and knowing a certain tool shifts the scale in your favor: if initially your chances of predicting price movement are estimated at 50/50, many mistakenly think that knowing all the subtleties of trading their chances will approach 90/10, unfortunately this is not so.
Good indicators are 55/45, at best they will be 65/35, because one transaction is not indicative, it will be necessary to open many transactions and only at the distance in the theory of large numbers the results will approach the mathematical expectation. You will start to guess more often and less often make mistakes, this is the best way to succeed in trading on the crypto exchange market and this is no longer the path of a beginner. You will have to cease to be a beginner and become a professional. Or you can choose another way – not to be a trader. Do not try to predict the movement of a course, but simply buy something that has fundamental reasons for growth, buy something that is inextricably linked with cryptoeconomics. It is known, it grows, grows very violently for a long time, even when local corrections occur, even when markets or individual market sectors collapse locally. Thus, changing the approach to a more fundamental one: portfolio or index, you very often can get rid of those problems that are in trading.

Historically, in a variety of markets: foreign exchange, commodities, securities markets and other proven -traders tend not to overtake the market itself. So, for example, if you invested in all American stocks by not a lot, you would get a better result than you looked for the asset that you want to invest in now, anticipating its price movement in the short/medium term.


Nevertheless, many people try their luck in trading, because it is precisely in times when the cryptocurrency itself does not give such a rapid growth and trading comes to the fore as a market neutral strategy, a strategy that can bring you profit, even when the whole market is in the flat or in the red. After all, trading allows you to earn on the fall and stagnation of the market, not just on its growth.

So I decide to sort out all 6 tools a little, so that the beginner had the opportunity to combine trading with investment.