نشر
CRYPTO MECHANIC
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The Easiest Way to Trade Crypto
Whether you’re new to the market or someone experienced, one thing you should know the crypto market tends to trend. By trending, i mean that if the market is moving upward, it will continue to do so, and if it's moving downward, it will keep heading lower. Trading in a trending market is generally easier compared to a ranging market.
What is an uptrend market? (Bull Market)
To identify a trend it's always better to start from the high timeframes because it doesn't matter what's going on in the lower timeframe it will end up going into high timeframe direction. That means you can use the lower timeframe price action to execute on your high timeframe setup.
The best timeframe is 1Day and weekly chart.
Now let's have a look at how bullish trend looks like
When the trend is bullish you will see price is continuously creating higher highs and the higher lows. This is an indication that the trend is bullish.
Now lets have a look at Bitcoin live chart.
Looking at the chart I’ve added, note that since Bitcoin’s bottom around 16,000, it has only formed higher lows, and there was no confirmation or indication of a trend shift until Bitcoin broke below 107k, which was its last higher low. So, even if someone didn’t buy at the bottom and entered around 30k or 45k, as long as the trend remained bullish, the upward movement continued until it broke at 100k. This means that if you simply follow the trend and hold your position, your return on investment would still be good. For example, if you bought around 25k and exited once the trend broke near 100k, your ROI would still be impressive.
In addition, when the market is in an uptrend, if you’re a trader, the only thing you should focus on is looking for buy setups as long as the market remains bullish and the uptrend is intact.
What is Downtrend? (Bear Market)
As the same as bullish trend but in an opposite way
When the price is creating lower highs and the lower lows this shows the trend is bearish.
Now lets have a look at Bitcoin live chart.
In above live uptrend chart we discussed that Bitcoin’s uptrend broke at 107k, which means that once the uptrend breaks, the market shifts direction and heads into a bearish trend. So, if we note that since Bitcoin shifted at 107k, it then formed a lower high at 115k, and from there, the price dropped down to 76k, forming a series of lower lows and lower highs. This means that since 107k, Bitcoin hasn’t provided any proper buy setups on a higher timeframe.
This tells us two things:
First, if you are purely a buyer, then since 107k, Bitcoin hasn’t given any high-timeframe buy opportunities.
Second, if you are a trend trader, meaning you trade based on the trend, then what you get from Bitcoin is only short setups.
Just as we look for buy setups when the market is bullish, we look for short setups when the market is bearish. And when you trade in line with the market’s trend, your success rate is much higher because you’re moving with the market’s direction.
so we’ve covered both uptrends and downtrends. In crypto trading, it’s really that simple, in an uptrend, you just look for buy setups, and in a downtrend, you look for short setups. That’s all there is to it. If you stick to this approach on a higher timeframe, trust me, you don’t need anything more complicated. Going with the flow greatly increases your chances of making money. There’s no need to overcomplicate things just focus on the market trend.
I’ve given you real examples, so now you can evaluate and reflect on your own trading. Remember, if you’re buying in a downtrend, you’re going against the market, and if you’re selling in an uptrend, you’re also going against the market.
Avoid trading against the trend because that helps you sidestep unnecessary losses. Also, if you’re more of a swing trader, not jumping into trades unnecessarily will help you avoid many losses. When you trade with the trend, or wait for the trend to shift, you play your cards wisely.
Good Luck :)
What is an uptrend market? (Bull Market)
To identify a trend it's always better to start from the high timeframes because it doesn't matter what's going on in the lower timeframe it will end up going into high timeframe direction. That means you can use the lower timeframe price action to execute on your high timeframe setup.
The best timeframe is 1Day and weekly chart.
Now let's have a look at how bullish trend looks like
When the trend is bullish you will see price is continuously creating higher highs and the higher lows. This is an indication that the trend is bullish.
Now lets have a look at Bitcoin live chart.
Looking at the chart I’ve added, note that since Bitcoin’s bottom around 16,000, it has only formed higher lows, and there was no confirmation or indication of a trend shift until Bitcoin broke below 107k, which was its last higher low. So, even if someone didn’t buy at the bottom and entered around 30k or 45k, as long as the trend remained bullish, the upward movement continued until it broke at 100k. This means that if you simply follow the trend and hold your position, your return on investment would still be good. For example, if you bought around 25k and exited once the trend broke near 100k, your ROI would still be impressive.
In addition, when the market is in an uptrend, if you’re a trader, the only thing you should focus on is looking for buy setups as long as the market remains bullish and the uptrend is intact.
What is Downtrend? (Bear Market)
As the same as bullish trend but in an opposite way
When the price is creating lower highs and the lower lows this shows the trend is bearish.
Now lets have a look at Bitcoin live chart.
In above live uptrend chart we discussed that Bitcoin’s uptrend broke at 107k, which means that once the uptrend breaks, the market shifts direction and heads into a bearish trend. So, if we note that since Bitcoin shifted at 107k, it then formed a lower high at 115k, and from there, the price dropped down to 76k, forming a series of lower lows and lower highs. This means that since 107k, Bitcoin hasn’t provided any proper buy setups on a higher timeframe.
This tells us two things:
First, if you are purely a buyer, then since 107k, Bitcoin hasn’t given any high-timeframe buy opportunities.
Second, if you are a trend trader, meaning you trade based on the trend, then what you get from Bitcoin is only short setups.
Just as we look for buy setups when the market is bullish, we look for short setups when the market is bearish. And when you trade in line with the market’s trend, your success rate is much higher because you’re moving with the market’s direction.
so we’ve covered both uptrends and downtrends. In crypto trading, it’s really that simple, in an uptrend, you just look for buy setups, and in a downtrend, you look for short setups. That’s all there is to it. If you stick to this approach on a higher timeframe, trust me, you don’t need anything more complicated. Going with the flow greatly increases your chances of making money. There’s no need to overcomplicate things just focus on the market trend.
I’ve given you real examples, so now you can evaluate and reflect on your own trading. Remember, if you’re buying in a downtrend, you’re going against the market, and if you’re selling in an uptrend, you’re also going against the market.
Avoid trading against the trend because that helps you sidestep unnecessary losses. Also, if you’re more of a swing trader, not jumping into trades unnecessarily will help you avoid many losses. When you trade with the trend, or wait for the trend to shift, you play your cards wisely.
Good Luck :)
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