The combination of Technical and Psychological aspects ensuring successful trading in cryptocurrency market.
In order to be a successful trader in the crypto market arena, you need to choose the right technical and strategical combination suit your personality.
During my involvement in the cryptocurrency trading, I was lucky to have two good mentors one from India and another one from Japan who taught me what I need to do in order to become a successful trader.
The Japanese thought me the fundamentals of trading, especially how to read and use the Japanese candle together with the other technical fundamentals especially moving average for establishing the trends, resistance and support lines for identifying the entrance and exit timing.
The Indian mentor taught me mainly the psychological aspect of trading and the understanding the price action. His main message was that you, first of all, need to know who you are. What kind of personality you have. Are you good in tactics or have strategic capabilities? The answer to these questions is critical for the establishing of your trading strategy accordingly. For an example, if you are implosive and emotional in this market you can’t be a daily trader due to its high volatility.In this case most of the time you will find yourself running after the green candles forgetting about the technical fundamentals and losing most of the time.
The alternative for this type of personality is to concentrate more on the strategy side.It gives you more time to refer to the fundamentals and avoid the need to make a quick decision dominated by the emotional and implosive feelings.
On the technical side you need to understand the fundamentals tools like Japanese candles Patterns, Support and resistance (RS), Fibonacci retracements and extension, Bollinger and Moving averages however the most important thing is to treat the market as human as its technical behavior and price action is caused by the human nature and especially greed and fear.
When watching the price action should consider the above.Most important thing is to understand that the market is moving by the big boys.We need to understand what the price action is telling us about their behavior and act accordingly and not against it.To understand what is the story behind the price action who is buying and who is selling and why. Buyers and sellers are the market movers but we need to understand the psychological aspect of the buyers and sellers in each stage.Allways ask who is dominating the market and dictating the price in the relevant trend (Up or down) and how they do it.For an example in a downtrend where the candles are very big is because the big boys would like to have a big discount when they buy and the other way around when it is an uptrend.What is the power of their price action and how we measure it? For an example when the trend is down/up is it strong or weak what is the size of the candles compare to the retrenchment (resting part)?
Only if we can combine the two factors together we can find the way to be successful more frequently. First, we need to understand what is going on what the big players are doing and only afterward to use the technical tools to predict until when they will proceed with their intention and when the reverse will start.
For any questions, you can reply to this post. I will be more than happy to answer them.
This post was written by Aharon Levy from @thelevys account.