CoinPanel recently announced that G-Traders from Stellar Trader Academy will soon be joining the platform as a team of Chart Mirroring Analysts. But who are they? In this article, they explain their take on the cryptocurrency industry and digital asset trading.
Cryptocurrencies are unlike other financial markets in that they are very sentiment-focused, and social media tends to lay a large part in the movement of the assets. Here at Stellar Education, we have over 25 years of experience in financial trading, training traders, and building discipline amongst the trading community.
Trading is not a punt; it is a business, so it needs to be run like a business. No business wanders blindly, hoping to make money; it involves strategy and planning, and trading with money is no different. To be successful, the best traders do their research, draw up plans, and plan a trade, to trade a plan. Without getting the basics right, the foundations of your trading decisions can be left to the mercy of other more intelligent investors.
So, what tools do traders have at hand? Clearly, there is enough information, but the question is, how good is it, and why rely on it without doing the work yourself? After all, it’s your money! Firstly, we would like to point out that so much analysis is based on perception rather than reality. Too much analysis we review is to buy and hold, or totally bullish; all this appears to be based on the premise that over time the core cryptocurrencies will keep going up! That may be true, but we are not here to speculate on that broad analysis. The key is to manage your portfolio or positions, and this includes entry, profit targets, risk, and so forth.
So, for this reason, Stellar Education has decided to weigh in and provide some guidance on what traders should be doing rather than following someone else’s ideas. The most common tool used is technical analysis – charting is essential not to sit and worry about the noise but to ween out critical areas of interest and levels where price action may assist where the market will go next.
For example, look at this chart; what do you see?
Let me share with you our thoughts and give you some ways of looking at this…
Volume
This is shown at the bottom of the chart, and this tells us a couple of things:
- Either heavy selling or buying is going on.
- Profit-taking after a big move.
- New participants into the market.
These points can help identify where investors protect, enter, or exit positions. Knowing this lets, you mark down areas where key levels may exist.
Candle Patterns
These tell us the behaviour of market participants and their interaction with price. On the 31st May 2022, it posted a Doji, failing to move above 50% of the sell-off starting on 5th May 2022. The posting of that doji, along with the trend, was a sell signal.
Candle Shadows/Wicks
These are the areas of rejections and or support and resistance as traders reject the initial move of the market; they can be at the top or bottom of the candle often, they are followed by consolidation and the high or low of the shadow to move out of the range will need to be done on higher volume, remember sellers don’t want the market to go higher. Buyers don’t want it to go lower, so consolidated range trading occurs when big shadows appear on candles. Further confirmation is needed as to which direction the market will move next, though once the shadow is breached, the market becomes volatile. You will need to know the next target level in either direction.
Trend
It’s evident that the trend of the market is down; despite attempting to test previous highs, the overall trend has been going lower and lower; it has not been making new highs since November 2021; for longer to medium-term investors, this is key, since the high of 1st November 2021, the monthly chart has posted 6 bearish months and only 2 bullish months! See for yourselves below; the two key areas for the fate of bitcoin lie around 15, 572, the break from the previous uptrend. Below that, and it will be very bearish, or to move out of the current bearish phase, we need to see a break of around $30,000.
So did you see the same as us here at Stellar Education? We have only covered basic analysis here but trust us, and we saw so much more to assist in potential direction, entry and exit points, profit-taking, new market participants, and overall market sentiment.
Here at Stellar Education, we teach people to learn from our experiences and what it takes to be a truly well-rounded investor/trader.
Check out the G-Traders’ charts on CoinPanel’s Market tab in the coming days!