Technical Analysis Concepts

Crypto Scrat

Published in

cryptoscrat

6 min readJul 20, 2018

Thread by @HsakaTrades

For ease of accessibility, I’m pinning a thread on some of the TA concepts I use regularly in my trading.

Each concept will have a thread of it’s own with various examples.

Hope everyone can glean something useful from this.

Support and Resistance (Breakout Trading)
Breakers and Order Blocks
Supply and Demand
Swing Failure Pattern
Trends and break of trends
Divergences (aka sometimes Price Action doesn’t tell you everything)

Support and Resistance (Breakout Trading):

The building blocks of TA: Support and Resistance

Sentinel factors:

Recency
Number of touches (Violence + Time spent b/w touches)

How I trade:

Buy last resistance when above
Sell last support when below

Note: This won’t work always, look for confluence.

Picked up the aforementioned idea from @Trader_Dante

Exhibit A

This was a high probability trade.
Missed it, just saw the setup on going through the charts.

Exhibit B ($NEO)

$NEO Update

No need to complicate your trading.
Identify key levels, and plan your entry, exit, stop.
Pull the trigger on the orders.
Go lead your life normally.

Breakers and Order Blocks:

A textbook example of a bullish breaker.
Shoutout to @Tradermayne for showing me this voodoo stuff.

Another potential breaker (Support/Resistance flip) spotted. Throwing it out there to see if it does it’s job (I don’t think it will). If it doesn’t, no biggie, nothing in TA has a 100% strike rate.

$BTC update
Support holding for now. Waiting to see how it reacts to the grey zone above. If it gets rejected, that’d invalidate the bullish breaker, make the bearish breaker a more likely scenario, which would see us test the 7060 swing low.

$BTC Scalp
A breaker that could have been played (I’m flat right now). Used the OB equilibrium (midpoint) as the entry.

Supply and Demand:

Contrary to popular belief, with every subsequent test of a supply/demand zone, the said zone loses it’s strength. Soon, most of the orders in the zone will be consumed causing it to cave and give way to price.

Exhibit A

Exhibit B (TC)

Exhibit C

Exhibit D

Exhibit E ($BTC)

Update.

Exhibit F perhaps?

Exhibit F ($BTC)

Exhibit G ($ETH)

Exhibit H

Double example.
$BTC

$ETH
Exhibit (I)nstitutional money perhaps?

Exhibit J ($LTC)

Exhibit K ($WAN)

Exhibit L ($BTC )

Been waiting a while to post this.
Hopefully this concept has been ingrained into you now with this example.

Swing Failure Pattern:

Seeing a lot of traders use/abuse this pattern lately, thought I’ll put up a small primer.

Index:

Premise
Identification
Trading (Entry/Stop)
Miscellaneous

Premise

The SFP is hinged on the basic idea that large players need equivalently large liquidity to fill their orders and avoid slippage by buying at the current market prices.

Once they fill their orders, price usually reverts back.

How do they achieve this?

Identification

Look for key swing points (/\ or \/) on a chart, swing high/lows that stand out instantly.

When price breaks these points, two things will happen:-
a) Stops will get triggered
b) Breakout traders will be baited

This will create the large liquidity required.

Trading (Entry/Stop)

Entry: On the close of the SFP candle (the candle that breaks the swing high/low and closes below/above)

Stop: Discretionary stop above/below the SFP candles high/low. Manually exit if price closes above/below SFP high/low.

TFs: Any (I use the 4h/1D)

Miscellaneous

Mostly applicable on BTC and large caps.
This can also be used to identify range fakeouts.
Check all exchanges to check if the SFP is consistent.
Lastly: A wick below/above a low from 3 bars prior and a close above/below is NOT an SFP.