Trading Bitcoin is rather very simple compared to other stocks and commodities on Wallstreet as High Frequency Algorithmic Trading Systems have not yet hit the Bitcoin Market. If you are new to trading or never traded the stock market, you can:
Learn the basics through self-learning by following our trading analysis on our Twitter and Trading View account. Also your will find on this page further below, FREE essential trading patterns and indicators that you can incorporate in your day to day trading that will simply make your life easier and save your lots of time. So make sure you follow us on both social websites regularly!
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Initially we'd highly suggest to follow us on Twitter and also constantly checking our Live Trading & News section on the website. There is nothing better than learning at your own pace on your own time.
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Our Free Live Trading & News section
Of course let's add some self-learning material all under one spot to complete your initial training in becoming a trader. That's where the overview of our own Bitcoin or Cryptocurrency Trading Indicators and Trading Patterns will be helpful to you.
5. Parallel Channels
A channel in a trading chart is a pair of fixed straight-line trendlines encasing a price action. This channel consists of one line drawn along the top of a price series; and another line parallel to the first along the bottom of the price series.
Parallel channels are widely used in the Bitcoin Market and other stocks or ETFs to establish uptrend or downtrend channel's. The channels let the attentive traders point out the top line resistance and the bottom support line. Usually these channels are perfect for swing trading (sell or short at the top of the channel and rebuy or relong at the bottom of the channel).
The below is an example of both a bearish/downtrend channel (left) and a bullish/bulltrend channel (right) within the Bitcoin Market plotted on the 1D (daily) timeframe. Channels can also be plotted on lower timeframes such as 30min 1H and 4H and are usually accurate as well as the 1D.
Before getting started, you will need to register with Trading View to be able to chart Bitcoin, draw, and add the indicators. It is FREE but it comes with limitations. Hence, I recommend signing up for the Trading View Pro plan for only $9.95 per month. You can register for a Trading View account by clicking here. If you already have an account, then skip to the next section.
2. Descending Triangle
A descending triangle is usually considered to be a bearish continuation pattern which forms during an downtrend. It usually occurs during a period of consolidation in an bear trend or bear market.
Upon the breakout of the lower side of the triangle, the sellers will aggressively send the price lower.
In some cases the triangle will break upwards from the upside of the triangle which is common during Bull Market or uptrends/rallies. Often novice traders will make mistakes using this bearish pattern in a Bull Market. So it is important to use this pattern with the indicators (SQZMOM, RSI, Willy and Volume) we presented in Section 2 above.
The first chart represents a descending bearish triangle that broke to the downside as expected by that bearish pattern. The second example on the right represents a descending bearish triangle that broke out to the upside in a bull market (being in a bull market can play a big role in the direction of a break out)
1. Ascending Triangle
An ascending triangle is usually considered to be a bullish continuation pattern which forms during an uptrend. It usually occurs during a period of consolidation in an uptrend or rally or bull market.
Upon the breakout of the upper side of the triangle, the buyers will aggressively send the price higher.
In some cases the triangle will break downwards from the bottom side, which could have bearish implications short term on the uptrend that was formed earlier in the market. Often the sellers will send the price downwards to previous horizontal support. It is also important to note that beginner traders mistake using this bullish pattern in a bearish market and incur losses if not used with other market indicators (SQZMOM, RSI, Willy and Volume) presented in Section 2 above.
The below two examples depict ascending triangles in a bull market. As expected they broke to the upside!
4. Head & Shoulders (H&S)
An IH&S on a technical analysis (TA) chart is a bearish reversal patternusually found when a market tops.
The H&S pattern is one of the most reliable stock patterns found in TA but it must be confirmed with a high volume breakout to the downside. It usually is formed with 1 Left Head Shoulder (LHS), 1 Middle Head which goes deeper in support and finally 1 Right Head Shoulder (RHS) and then an bottomside neckline or support broken with high volume as seen in the example below
The H&S below occurred during the Bitcoin Bear Market on November 13th 2014, it lead to a big leg down with high volume and volatility from the $350 - $400 down to $160-$200 levels.
3. Inverted Head & Shoulders (IH&S)
An IH&S on a technical analysis (TA) chart is a bullish reversal pattern usually found when a market bottoms.
The IH&S pattern is one of the most reliable stock patterns found in TA but it must be confirmed with a high volume breakout to the upside. It usually is formed with 1 Left Head Shoulder (LHS), 1 Middle Head which goes deeper in support and finally 1 Right Head Shoulder (RHS) and then an upside neckline or resistance broken with high volume as seen in the example below
A typical example of the most remembered IH&S on the Bitcoin Market was the one that put a bullish reversal and final bottom at the $200-315 USD level on August 25th 2015, which gradually led to a mega-high volatility volume rally from that level to $500 few weeks later after the consolidation had ended. That IH&S started the Bitcoin Bull Market back then which continued through 2016 and will continue through 2017 as well.
The secret weapon of every trader comes down to the best combination of trading indicators. Finding the best combination of indicators does not only make it simple, effective and clear when or when not to jump on a trade but it also will assist you greatly in managing your risk reward, time spent watching the charts and identifying trades that really matter to you from the ones that don't.
Find out the secret trading indicators combination used by Bitcoin Guru to make the most accurate calls for a small fee. We highly recommend that you enroll in the 1-on-1 Bitcoin Guru BGMC-102 course titled "Overview of the Main Trading Indicators & Patterns" to get you the skills you need to start trading.
Head over to our Bitcoin Guru Cryptocurrencies Trading Mentorship and Coaching Program page to enroll in the course by hitting the button below: