In the wake of the charts that I put out over the last few weeks many people have asked me about my technical analysis methodology — my indicators, routine, and style. While I have developed my own style and certain aspects are more vague when it comes down to personal preference and flavor, the core analysis is — and always should be- for the large part, very quantifiable. Having a system lets me apply one standard across a large scope of possibilities and ensures that there are less variables. In trading, and in any progressive skill in life, this lets you better recognize when something is or is not working, how well it is working in comparison to other methods, and how to fine tune all these parts as you go.
That being said — I am still learning myself. “You don’t know what you don’t know” is a very apt quote in this situation. Take what I say as a framework for your own research, do not just simply try to copy paste what I have here and expect it to be perfect, not everything you need to know to apply what I am talking about is here, but there is enough for you to know what to study then. Expand, seek more knowledge, grow. This will be as short and sweet as possible. Less is more in this shit. Enjoy guys.
I am concerned with one thing ABOVE all else — making the best trades I can. It is not about the money to be made, it is about protecting the money that I have.
You might get ____ coin xxxx-sats before me and make 100%+ on your trade. I make 70%. You can only do that 3 of 10 times; the other times you get stopped out at a loss. You make 300% but lose 150% on the other trades. I can make my 70% for 6 of 10 trades. My entry also is such that not only have a higher probability of winning the trade, but it also serves as an early stop, and as such I only lose 50%. You have 150% after 10 trades, I have 370%. Be concerned with making the best trades you can above all else.
Trade value, not price
This ties directly into my use of the VPVR (Volume Profile Visible Range) on Tradingview. Supply and demand are facilitate trading. In simplest terms, the VPVR shows you areas where the supply and demand where close to equilibrium. It also shows you areas where less trades have been conducted. These areas of less trade are the areas that I am concerned with taking my trades.
Think like a market maker
This is my most recent growth in my methodology and the aspect that has had the most profound effect on my understanding and results. Trading is a zero-sum game. Money made by one is money lost by another. Market makers are the ones setting up the game, essentially. Why is a coin stuck between X and Y sats for weeks, months? Market maker. Why did ___ just pump up and then get sold right back down to the same range? Market maker. Coin goes up great and then someone sells a bunch, you panic dump at what turns out to be the bottom because price reverses right back up? Market maker. The examples in order are roughly — accumulation, what I call a pre-pump to test a market, and a MM that is long selling a top and refilling lower (and this is where trading value with VPVR comes in) to an area with less transactions (gaps on VPVR) to test the supply/demand in that area. A constant cycle of fill, push price, unload, refill. Study market makers and you begin to think like this and most importantly see it in the chart.
- Ichimuko cloud (settings doubled to 20, 60, 120, 30)
- Moving average: 20, 40, 60
- Stochastic RSI
Start on higher time frames:
- 3 day
- 1 day
- 12 hr
Market / Candle Structure
- Are we consolidating? Trending?
- If trending —
- Does the structure look strong or weak?
Check the volume
- Increasing volume sign of market interest
- How is volume acting in comparison to price movement?
- What is the relationship between the volume and the current sentiment (Panic selling / FOMO)
- Use to gauge trend strength
- 3 day and weekly up is where I am going to look to determine if this is just a quick pump or possibly the start of a trend.
- Use it to help determine when pullbacks and recoveries are more likely.
- Are we currently in the value area (outward peaking part of the histogram) of the VPVR? This is my no trade zone.
- Where are the volume gaps (higher probability trade zones) and how do they correlate to all of the above analysis?
Here is my routine applied, which brought me to my decision then.
This is just a brief overview of my specific TA style. I hope it gives you a basic framework for developing your own style and strategies. Follow me on Investfeed @ cane to keep up to date with me in the future as I’ll be using the platform more from now on. Thanks to everyone for support and cheers to good trades