Trading 101 - how to find a swing trade opportunity P3 by mastercore

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· @mastercore ·
$1.21
Trading 101 - how to find a swing trade opportunity P3
*__05/01/2019/11:00CET__*

Since this is a how to guide, I thought I would share some of the more nuanced observations that go into technical analysis.

Let me start with a bold statement: "Technical analysis is not a science, nor is it a skill" (TA for short)

Why do I say this?

Because, even though there is such a thing as good and bad TA, bad TA can be proven correct and good TA can end up wrong. I would equate TA to prospecting.

A good background in Geology can certainly help you in prospecting (the mineral mining type), but it does not assure you of any certainty. And then there can be a newbie with no geology training who strikes it big. Chart TA is a bit like this.

Now a good background in Geology will improve your hit rate in the long run and that is why just as in mining, a good knowledge and experience in TA will improve your hit rate in trading.

With that out of the way lets take a look at the charts and see how our trade is doing...
___

Before I dive in, here are the previous 2 posts which will give you some background to this post. I recommend you go read them in conjunction to this one. And remember to upvote and follow me.
___
Here is our chart  again, zoomed out for context (and I have switched off all indicators and the trade P&L areas)
<center>![](https://cdn.steemitimages.com/DQmaZ2BJcJNU3cZT1Rvp14qXAi9fpm2YCVWZKjhBbfQwfYB/image.png)</center>
## What can we see here?
* The descending channel which started back in mid Nov. Now note how the 3 equidistant parallel lines were followed by price action.
* Then we broke out to the upside between 21st and 23rd Dec
* Notice that price action seemed to now be reluctant to break back into the channel. So the channel boundary was now acting as support, albeit descending.
* Then on 28th we had a strong daily candle close significantly above the channel support line. This was hinting to a short term trend change. That is when I drew the ascending support line to see if price action would respect it. I also saw a possible upper channel, or in this case wedge (channels are parallel or near parallel lines) boundary. It is in very light blue because it is not yet reconfirmed. _(In general my convention is to draw in lines where I see possible trends, at first in very light colours and then darken them as they get reconfirmed. In some cases I also tweak them as I go.)_
___
So now we have what looks like a wedge with an ascending bias which could run for the next 5-15 days.
What I wanted to show you is best seen in the hourly.

<center>![](https://cdn.steemitimages.com/DQmR4AVZPWm8cD8ns5qrLNYatiPTuu311b2mX5ns119TetG/image.png)</center>
* Later yesterday evening we had a small breakout that hints to a reconfirmation of the ascending trend line. It is the right most red circle.
* The other 2 circles mark the precious confirmations of the trend line.
* The start of the trend line is off screen but you can see it in the daily

Trade over the next 12-24 hours will be interesting.

# <center>Word of warning!<br><br><br>TA is not a science, it is more a craft<br>It is tempting to see patterns and lines everywhere in charts<br>Resist this kind of _over analysis_<br><br>Keep it simple, and always be ready to admit you were wrong when the facts go against your predictions.<br><br><br>Hubris is the traders worst enemy!</center>
<br><br><br>
As always guys, leave comments, have fun and trade safe.
___
#### Disclaimer: This post is not financial advice. Before investing any funds do your own research and make your own decisions. Cryptocurrencies are highly speculative. <br>And finally: Do not invest money you are not comfortable losing.
___
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@tts ·
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vote details (1)
@etka ·
Hey mate, once again thank you for sharing your knowledge in such a pleasant and constructive way. Enjoyed it a lot. That last hourly chart is looking great! Do you expect an interesting run up that could be followed by some FUD regarding BAKKT to get to a new (hopefully final) low? I know you are going to take some early profit, so to speak, this time.. Thanks for sharing
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@mastercore ·
As I write this, we are pushing down through that support line again. Not a positive sign.
<center>![](https://cdn.steemitimages.com/DQmZiEXW96gT4ZPg6PmnpZuCZAspwT4W6sAuCBKwCbrcUcf/image.png)</center>

And vols have dried up. It all feels like the other times when btc suddenly suffers a major down candle.
I am considering today to take some of my capital off the table from this trade in anticipation of a this dump and re enter to average down my entry point. Not what I wanted to do on my Sunday.


__*Do you expect an interesting run up that could be followed by some FUD regarding BAKKT to get to a new (hopefully final) low?*__
@Etka in general, I do follow the background noise of the news closely. It is a huge driver of price.
# But...
it is impossible to reliably meld it consistently together with technical analysis.
In my mind, TA must be as pure, unbiased analysis of historical market action as possible. As soon as you add it some bias for potential news influences, TA becomes very difficult, to pointless.

The best that can be done is to muster all your self control to combine the fundamental and news analysis with the TA at the end. Now this would take  _a better man than I gunga din_. Mental rigidity and discipline are essential.

I feel anything esle is like changing 2 variables in an experiment. How do you know which one is responsible for the effect?
___
It is a difficult subject to properly articulate, and victim to such subjectivity. 
___
__jeder fΓΌr sich__ _(german for: every man for himself)_
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@mastercore ·
Ha!

And in this low vol environment this can also happen!

<center>![](https://cdn.steemitimages.com/DQmSviVW7qXahUrmRJKEjoQipa8WpfDort62Xoa3SYJ93NC/image.png)</center>

And we wonder how #btc went from 4.5k to 20k in just 3 months last year!
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@etka ·
Haha...thank you so much for your replies! I understand TA should not be mixed with news and sentiment manipulation, but this past year I felt that people in control like to combine both to move the market. Now we had a beautiful Sunday staying green above 4k, well see what Monday comes.
Vielen Dank!
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