search.noResults

search.searching

dataCollection.invalidEmail
note.createNoteMessage

search.noResults

search.searching

orderForm.title

orderForm.productCode
orderForm.description
orderForm.quantity
orderForm.itemPrice
orderForm.price
orderForm.totalPrice
orderForm.deliveryDetails.billingAddress
orderForm.deliveryDetails.deliveryAddress
orderForm.noItems
FX CRYPTOCURRENCIES


mostly from Q4-17, as they set up in real time.


Textbook Technical Analysis


I remember being amazed at how well the price obeyed trendlines. I had never seen a market more perfect for a technician as chart 1.3 clearly shows. This early in the game there was not really many ways to short the market so when price broke support lines it did not stop going down until longs had exhausted selling. The price


action was characterized


by clear, impulsive, straight line moves. Being a macro trader who embraces NFP, ECB and Fed days, I was elated at the massive daily trading ranges and good liquidity. I have always gravitated to the most volatile and liquid markets because that is where human mass psychology is most evident and my read on the charts most accurate.


Anatomy of a Trade Setup


I have two criteria for putting on a trade. I need a setup and a trigger. Chart 1.4 shows the daily timeframe of Bitcoin, but it could just as well have been a 30-minute chart of the German Dax or EURUSD. I trade them all just the same. The only thing that matters on chart 1.4 is the wide range bar (Oct 12) which signaled


18 FX TRADER MAGAZINE October - December 2018


Chart 1.3 October 15, 2017 – Bitcoin at $5,542


an increase in bullish momentum, the sideways consolidation and most importantly, the rejection of prices below the range. All that put together is a long setup in my book.


Price Dynamics


Once price broke out of the range in chart 1.4 and got rejected, it tends to run to the other end of the range as part of the price discovery process. The reason for this is twofold. As price breaks lower it attracts short sellers who


will cover as soon as they realize they are on the wrong side of the market which adds to the buying pressure. Also, the smart money who got long when the market broke lower will try to bid it higher afterwards to be able to offload the inventory at a profit.


Pulling the Trigger Next,


I need a trigger which


could be either higher highs and higher lows as price trades back inside the range again or a break of the top of the range. In


Chart 1.4 October 20, 2017 – Bitcoin at $5,693


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62