My Notes
General:
- Total2 is the overall market cap of cryptocurrency excluding BTC.
- Total3 is the total market cap of the top 125 cryptocurrencies excluding BTC and ETH.
- August and September are typically the worst months in the red.
- February and October (October best out of these) are generally the best months with the highest percentage gains.
Pillars Of Trading:
- Money Management: How much money total are you putting into the market and what percentage of that amount are you going to invest into each asset? Slowly scale in as the price is going up. Use stop losses by setting a dollar amount or percentage amount of your initial investment that if the price dips to or under, you get out of the market. This way you only lose a portion of your intitial investment and not all of it. Never lose more than a candle for your stop losses.
- Location: Find where price is consolidating in a narrow range on the chart and once a candle breaks out of the consilidation zone it may be time to buy in. Locate how far the current price is from the 20 and 200 SMA lines. Anytime the 20 and 200 SMA lines comes close to one another they will always begin to move far and away from one another.
- Event: Is price movement moving to the upside or downside?
- Taking profit: When the asset is well above the 20 SMA line and the 20 SMA line is far above the 200 SMA line and price begins to consolidate it may be time to start taking profit and scaling out. Don't take everything out all at once, scale out because higher highs are possible. A good rule during high peak consoldation is when a red candle takes out a previous green candle or green candles, scale out and take some profit.
Bitcoin (BTC):
- BTC usually starts going up after each halving cycle. The most recent halving was on April 19, 2024. The Next halving is on April 17, 2028.
- Roughly 475 days before a BTC halving is typically the lowest price level for BTC. The next potential low price date is December 29, 2026.
- 2 years before the BTC halving, that August and September are generally the worst in the red.
- 85% of Bitcoins largest gains are over a 13 to 18 day period.
- When BTC dominance goes down and Total3 goes up, this means altcoins are going up.
- The strongest altcoin seasons have occured when BTC dominance rejects at 71% and then starts going down.
- In a bull market BTC will not close more than 2 down months in the red.
- In a bull market on the weekly chart BTC price will never close under the 20 SMA line.
Trading Bitcoin (BTC):
- Inside bar: Look for consildation within the top and bottom range of a larger candle to the left of the new candles that are forming. After consolidation finishes, price action will either break to the upside or downside. The best advice is to sit on your hands and wait for the breakout to then enter into the trade. Also note that the longer the consolidation period the greater the expansion either to the upside or to the downside during the breakout.
- 2 down, 1 up: Look for 2 red candles closing above the halfway mark or within the upper range (1/2, 1/3, 1/4 etc.) of the green candle right before it. If there are 2 or more green candles before the 2 red candles, measure the distance from the highest reach and lowest reach of those green candles to determine your range area that the 2 red candles must stay within.
- 20 hold: Look for consolidation and price movement above the 20 SMA line. If the price dips below the 20 SMA line it should not travel too far below it and should come back above the line.
- Bullish engulfing green candle: Look for a big green candle that clears and goes above all of the previous price consolidation to it's left.
- Bearish engulfing red candle: Look for a big red candle that clears and goes below all of the previous price consolidation to it's left.
Trading:
- Higher highs and lower lows are a good indicator of the direction the market and assets are heading.
- The larger the gap between a previous all-time high and the latest attempt of crossing that all-time high, the tougher it will be to break that resistance zone.
- When a resistance zone is broken there is a very high chance of coming back to retest that resistance level.
- For day trading never lose more than 1 candle. Put a stop loss at the halfway mark of that candle.
- Before scaling into an asset, determine atleast 2 or more positive factors on the chart to strengthen the reason to buy in.
- On a chart if you draw a trend line and it has 3 hits from candles on that trend line then the 4th or 5th hit will break the trend line.
- Often an asset will top out a round even number. For example if XRP was trading at $3.26 and this was near it's high, chanecs are it will push up to $3.30 or $3.40 before heading back down to a lower price.
- Once you move past the halfway mark of a pullback or bear market, an uptrend should follow. As movement upwards continues, the previous high will be the main resistance level to clear.
- When an asset hits an all time high, 70% of the time it will pullback and a red candle will follow.
- Consolidation (sideways movement stuck between a high and a low) happens before a move upwards or downwards. Often an upward trend follows consolidation, but not always.
- Before you move into a trade allow the current candle to close (can set chart at 2 minute intervals).
- When an asset goes parabolic and almost in a straight up pattern it will likely hit a peak and then collapse downwards.
- The strongest upwards trajectory is roughly at a 45 degree angle with the asset moving upwards and only coming down to touch and bounce off of the 20 SMA line before continuing upwards.
- After a bear market, once the asset price bottoms out and touches the 200 SMA line and starts to head back up, once the asset clears the halfway market between the previous high and low, it will reach another peak and likely come back down and retest that halfway mark before continuing upwards to a new all time high.
Pivots And Shapes:
- A pivot is a reversal.
- Pivot points often create support and resistance levels. You'll get either a high pivot (A shape/mountain) or low pivot (V shape).
- A "V" shape is a drastic red candle downwards followed by a green candle upwards recovering what was lost.
- An "A" shape or mountain shape is a quick rising green candle upwards followed by a harsh red candle downwards wiping out what was gained.
- A "W" shape (double bottom) is prefered with the first bottom point being lower than the second bottom point. This indicates an upwards trend and often leads to a breakout going up.
- A double top "M" formation takes an asset to the downside.
- In an "M" formation if the second peak of the "M" is lower then the first, then the asset is very likely going down. Also, once the far right leg of the "M" breaks past the middle point of resistance where a "V" forms in the middle of the "M", then it's very likely the asset is heading downwards.
Candles:
- Candles usually change color after 3, 5, 7 or 9 of the same color candle in a row. The closer you get to 9 candles you can definitely expect a color change in the opposite direction.
- Long topping tail or long bottoming tail candles often signal a coming reversal.
- If the 5th candle is a big green breakout candle this has the highest probability for upwords continuation.
- Big green candles above the 20 SMA line are bullish and 70% of the time have continued upward momentum following them.
- If you see numerous top or bottom tail wicks in a row, check for previous resistance around that same level days, weeks or months prior.
- Big green candles following consolidation are bullish and have high odds of continuing upward momentum.
- When there are 2 downward red candles, 70% of the time a green candle will follow.
- When a green candle closes above a red candle, 70% of the time it will continue moving upwards to the next support zone.
- When a red candle closes below a green candle, 70% of it will continue moving downwards to the next support zone.
- Bearish big red candles 70% of the time have continued downward momentum following them.
- Toping tail candles often have long wicks and are formed at high peaks after a run up. There is a 30% chance that a downtrend follows.
- (Use the weekly time frame on the chart for this) When you have a series of bullish green candles during a bull run, take the length from the bottom of the first green candle, all the way to the top of the highest peaked candle and that will likely be the length of the next run up and break out upwards after the downward consoldation finishes.
- Bottoming tail candles often have long wicks and are formed at the lowest points before an uptrend begins.
- A candle that engulfs and clears all of the previous candles to it's left and clears the resistance level are ideal to determine the trajectory of the asset.
- When you have consilidation be patient and wait for a breakout candle which may go to the upside or the downside. If a red candle to the downside breaks below the 20 SMA line then it's likely in a downtrend.
- During consildation candle wicks can shoot above or below the area of resistance but the candles will always close within the resistance zone until a breakout happens.
- If a candle closes below a previous candle that has formed a resistance level then a downtrend is likely.
- If a candle closes above a previous candle that has formed a resistance level an uptrend is likely.
- If after a big red candle, a green candle follows that recovers half of or the full length of that previous red candle, that's bullish and upward momentum is likely.
- After a large red candle, ideally you'd like the next green candle to recover half or more of what the red candle lost. Also you'd like the green candle to make the previous red candles half way mark the next bottom resistance support level.
- In upwards momentum, even red candles should close higher than the previous low red candle. If the red candles start to close below previous lows then a downtrend is likely.
- When 2 red candles follow a larger green candle and trade inside the top and bottom area of that green candle, it's very likely an uptrend will follow. It's called 1 up, 2 down. The first red candle should close near the top of the previous large green candle and the second red candle will likely be lower then the first red candle, but both should close withing the upper 1/3 of the previous large green candle.
TradingView Indicator 20 SMA:
- 20-day moving average.
- Often the resistance level.
- The greatest price movements of gains and losses (big candles) happen around the 20 SMA line.
- Profit taking is ideal when an asset is above the 20 SMA line and the 20 SMA line is moving upwards at roughly a 45 degree angle.
- When the 20 SMA line is moving upwards it's your friend. This is bullish.
- When an asset is above the 20 SMA line this is a good sign.
- When the 20 SMA line is moving downwards this is bearish.
- When an asset is below the 20 SMA line this is bearish.
- When the 20 SMA line and 200 SMA line are closest together and consolidation is happening this is a sign of a very likely upwards bullsish move. The 20 SMA line should be moving upwards at roughly a 45 degree angle and away from the 200 SMA line. The 20 SMA line must also stay above the 200 SMA line.
- When the 20 SMA line and 200 SMA line come closer together, they will always separate and start to move away from one another.
- Time and distance are major factors. If the asset has been steadily moving well above and away from the 20 SMA line for a long time, it may be time to scale out and take some profit.
- When an asset is above the 20 SMA line and it's newest low has gone below it's previous low then it's likely time to start scaling out. Especially if that low goes below the 20 SMA line.
- If a crypto is staying above the 20 SMA line then it's in an upwards trajectory. Red candles can bounce off of the 20 SMA line of resistance, but they must stay above it to continue upwards momentum.
- If a crypto is staying below the 20 SMA line then it's in a downwards trajectory. If it bounces off of the 20 SMA line like it's htting a ceiling and goes down then it's in a downwards trend.
- When a large gap is between the bottom of the candles above the 20 SMA line then it's time to start scaling out.
- When the 20 SMA line is far above the 200 SMA line and there is a large gap is between them, than it's time to start scaling out. The market has likely hit a high peak.
- When the 20 SMA line cross from above, over and then under the 200 SMA line; this is a downward trajectory and bearish.
TradingView Indicator 200 SMA:
- 200-day moving average.
- When an asset has peaked well above the 20 SMA line and there is a very large gap from the highest candle and the 200 SMA line, 80% of the time when that asset comes down and touches the 200 SMA line it will consolidate sideways and then break out to the upside. Or you will have a very low dip in a V shape below the purple 200 line and it will spike back up and above it for a break out to the upside. To simplify the 200-day SMA line will be the resistance level.
- When scaling in, look at the distance between the previous highest price level and the 200 SMA line. The greater the distance the better. If the asset is trading under the 200 SMA line, once it clears above that line and uptrend is very likely.
- The great the distance between the previous highest price level and the 200 SMA line the better. In this instance if the asset is coming down and nearing the 200 it will likely bounce off and head back up or start consolidating around the 200 without going to far under it.
- When there is a downtrend of the 200 SMA line and the 20 SMA line is underneath it, if the asset clears above the 20 SMA line and reaches the bottom of the 200 SMA line, it will bounce of it like a ceiling and be rejected from that resistance level.
TradingView Indicators 50 & 100 SMA:
- 50 and 100-day moving averages.
- Typically resistance levels for support.
- If an asset is above the 20 SMA line and then drops below it, it's next bottoming out support level may be the 50 SMA line and if it drops below that line it's next support level may be the 100 SMA line etc.
TradingView Indicator Fibonacci:
- If the Fibonacci indicator is placed where the bottom resistance level lines up with the bottom bar of the indicator, then there is a 90% chance that the .786 line will be the top resistance level for the asset if that asset has upwards momentum from the bottom.
- When an asset has momentum upwards, place the start of the Fibonacci indicator at the bottom low support level and then select the highest peak level candle above to display the indicator properly.
- When an asset has momentum downwards, place the start of the Fibonacci indicator at the top high peak support and then select the lowest bottom candles resistance level below to display the indicator properly.
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