Basic Technical Analysis: Drawing Lines

The purpose of this post is to show my thought process as it pertains to lines on a chart. Support and resistance lines are very important for getting good entries and exits. It’s also one of the few things I use and take into consideration when evaluating a stock or crypto. As you can see on the chart below, I’ve been drawing some lines on this recent Bitcoin price movement for the past couple days.

btc1hr.png

The first thing I noticed when I started drawing these lines two days ago was the descending wedge. You’ll notice that on the chart as the triangle pattern pointing down. The lower line of this pattern (support) is considered a good entry as long as it is towards the bottom of the pattern. You’ll see that as the pattern comes to a close, we see upwards price movement, which breaks the top line (resistance). Profit should be taken when the Stoch RSI appears to be capped out at the top (the bottom indicator on the chart).

After the significant retrace from that increase, I drew a line from the peak of this local pattern to the peak of the breakout from the falling wedge. I also drew a line along the bottom points to create two parallel lines, which makes a downward channel. The bottom line is support and the top line is resistance. After the retrace, we came back down to support for another touch on that line. BTC attempted another touch only hours later, but was rejected with significant buy support. This was my signal to get in. I saw signs of BTC bucking the downward channel. I entered the trade at that point and exited when we did see a spike towards the resistance. I played this one safe and exited before resistance because I thought it was possible that we might get rejected and continue down. I was able to make profit, but it turns out that I exited a little too early. That’s okay, though. Profit is profit. Don’t every weigh yourself down with what could have been.

Currently, we are seeing Bitcoin use the former resistance as support as we retrace from our breakout. What I am watching for here is if we fall back into the channel or if we bounce from here. This is a no-trade zone for me and I’ll be sitting on the sidelines until I see an opportunity. Sometimes the best trade is no trade at all.

$ZCL Update

Earlier today, I entered ZCL. Following my entry, ZCL pumped by almost 40%. It has since cooled off and I’m now up around 15% on my original entry. This coin has a long ways to go in my opinion. The direction of the market is dependent on BTC’s moves, unfortunately. I’ll be watching ZCL closely in the coming days/weeks leading up to the BTCP fork. Here’s a chart:

zcl1hr.png

I think that ZCL will maintain an uptrend and may not even retest the established support for quite some time. It looks like it may be preparing for another leg up.

$GUP Reentry

I called my exit from GUP before the market movement last night. I was able to get out with a slight profit. At that time, I made it known that I would be looking for a better reentry because I think this coin is bullish long term. Last night, I reentered GUP. I was able to get one entry at .0000715 BTC and another at .000074 BTC. Here’s a chart: gup4hr.png

The 4 hour RSI is way oversold and although we dropped below support last night briefly, we got a great bounce and I think that the upper support is still intact. I will obviously adjust as time goes on and things change, but for now I’m comfortable holding GUP until their two product launches later this month. If we break below .000074 BTC, I will be selling off my higher entry to get in at a lower price once again.

Market Update

Last night, the market received a pretty thorough beatdown. The only coin that I sold during this was SALT, as I did not like the way that it was going against what I thought would happen and thought it would be best to secure my profits and move on to the next coin. I am still holding ETH, OMG, NEO, ETC, CAPP, ICX, SUB, and a few other small coins.

On the market dip, I added ZCL (upcoming Bitcoin Private Fork), and GUP (Coin I exited earlier the other day but it has catalysts).

The reason for the dip seemed to be that South Korea was contemplating a cryptocurrency ban. This is nothing new. This type of FUD (Fear, Uncertainty, Doubt) comes up every couple months and the market always bounces back. I will be watching Bitcoin closely because it’s an indicator for the rest of the market so if things look bad there I may decide to move some funds to USD to hedge against the market dip and look to buy some stuff while it’s low. The BTC bounce from the dip has been rather weak, so it may continue down. The Altcoins, however, have been bouncing back pretty well overall.

I will update with a chart on my entries later today. Thank you for reading!

$SALT Update

I have exited my position on SALT. I recorded a decent profit, but wasn’t seeing a bounce that I liked following the other day’s spike. I may look to reenter this coin, because I think the platform has a lot of potential, but having it break out of a falling wedge/channel downwards was too bearish for me to continue holding. I’ll be watching closely, but for now I’m out. salt4hr.png

The 4 hour chart actually looks decent, but so far charting this coin hasn’t been going that well for me. The 4 hour RSI is on the way up and we did bounce off an established support during the market dump last night. I’d say things look overall okay for SALT, but I like to go for trades that I’m more confident in. I was able to nab a 15% profit on this coin by averaging down my entry and selling my high entries on the spike the other day.

$SALT Update

SALT is at a little bit of a weird spot right now. It seems to be the start of a falling wedge. It almost broke out upwards earlier today but was stalled. In my opinion it will either continue to fill out the wedge and eventually break up at the bottom, or it will break it in the next few hours. After a short retrace, SALT seems almost ready to go again. I am holding this for one more leg up and then I will likely sell out of my position to pursue coins with catalysts.

salt1hr.png

$SALT Update

After it’s fairly big pump, SALT has been cooling off a little. On the chart, it looks like we might be starting a little falling wedge, which is bullish of course. Here’s the chart:

salt1hr.png

As you can see, the 1 hour RSI is basically at the floor. I expect another run up either when we complete this wedge or sooner. If we break bottom support of the wedge, I will sell SALT for a decent gain and wait to see if a good entry spot comes up. Thanks for reading!

$SALT Update

So, Bitcoin finally cooled off a bit. Hopefully it is done charging for a while so that the alts can recover. SALT has not had a very big bounce yet, but both the 4 hour and 1 day charts are looking good and ready for a decent recovery. Like I said in my original post for my entry, I am perfectly comfortable holding this coin at whatever price it is in the market because I know that I can redeem it for $27.50 on their lending platform if I were to take out a loan backed by crypto.

Here’s the 4 hour chart:

salt4hr

As you can see, the 4 hour RSI has begun to turn up. The first test is the resistance that was formerly a solid support. If we can get past that, I’d be comfortable calling it a recovery. If BTC decides to go again, we should drop down to the descending support line.

Here’s the 1 day chart:

salt1d

Same thing here. Bounced off our new support and looking to cross the former support turned resistance. RSI is at the bottom. Hopefully all signs for an incoming recovery.

If things still refuse to go our way within the next couple days, holding this coin long term is not a bad decision. The arbitrage change is very appealing. I might take out a cash loan on SALT’s platform and pay it off with the discount tokens we’re getting now just for the 300% gain. Before I do that though, I’d prefer to be able to see 300% gains against BTC if at all possible.

Thanks for following along!

$SALT Update

Welcome to your first Bitcoin baptism. Alts got absolutely destroyed by Bitcoin today. No worries though, I’ll walk you through this.

SALT was looking great until Bitcoin decided to go wild, but that’s how things go. As much as it sucks, my strategy with SALT is to just hold tight. As more and more loans are granted, the higher the demand for this coin will be. I a perfectly comfortable holding this coin for the long term, so in the short term I’ll just have to stick it out. If you are able to do so, .0006 BTC is a great place to add more.

salt1hr

We fell through the solid support today and it looks like it will find a new, declining support. Hopefully the bounce will be strong on that line, otherwise we will have to reevaluate and possibly take the loss on this trade. If we do bounce, former support will likely become new resistance. I will keep you updated via twitter.

Binance

One of my first blog posts was a tutorial on using Bittrex, one of the most popular cryptocurrency exchanges. Today, I’d like to tell you about Binance. Binance is a fast-growing exchange due to its innovative fee structure and friendly user interface. It is widely seen as a better alternative to Bittrex because of faster speeds and more features. Being on multiple exchanges allows you to access more coins and projects which means that your investments will hopefully grow faster.

Deposit/Withdraw

Deposits and withdrawals are quite easy on Binance. The process of sending from your wallet is the same. You’ll need a deposit address and an amount. To deposit, locate the top navigation bar. Hover over “Funds” and click “Deposits/Withdrawals”.

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When you arrive to the balances page, find the coin that you need to deposit and click “deposit”.

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It will provide you with a deposit address and from there you just need to send it from your wallet.

This is the same process as Bittrex, but it might take some getting used to the navigation on the site. To check your deposit/withdrawal history, hover over “Funds” and click “History”.

Trading

To begin, hover over “Exchange” in the navigation bar at the top, and click “Basic”. On the right side of the screen, you can select your currency pair and then search for the coin you’d like to purchase.

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Once you’ve found your coin, click on it to go to the exchange page. Placing a buy/sell order is once again, very similar to Bittrex. You simply specify the price you want to pay and the amount you want to purchase.

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Another reason that I love using Binance is because of how they do their fees. If you hold their token (BNB), you can toggle a setting that allows you to use that token to pay any fees from your transactions. If you use their token, you get half off your trading fees (which are already lower than Bittrex). This also happens to make BNB a good investment. As more people start to use Binance, this coin will obviously increase in demand and therefore drive the price up.  I am slowly accumulating BNB not only to save money on fees, but as an actual investment.

Binance is quickly becoming the hottest exchange in crypto. If you are planning on trading frequently, you should absolutely have an account there.