Crypto trading for dummies

Table of contents

1. Crypto Trading 101
   1. Blockchain for beginners (infographic)
   2. 12 of the most commonly-used Technical Indicators
   3. Candlestick patterns
      1. Bullish Channel Up chart pattern
      2. Ascending Triangle
      3. Descending Triangle
      4. Symmetrical Triangle
      5. Head and shoulders
      6. Inverse Head and Shoulders
      7. Channel Down and Channel Up
      8. Bullish and Bearish Flag
      9. Falling Wedge
      10. Rising Wedge
      11. Double Bottom
      12. Double Top
      13. Triple Bottom
      14. Triple Top
      15. Bullish and Bearish Pennant
      16. Rectangle
      17. Support / Resistance
      18. ABCD pattern
      19. Butterfly
      20. Success rates of various patterns.
      21. Chart Patterns Cheat Sheet
   4. Trading psychology
   5. What is
      1. AAVE (AAVE)
      2. Chainlink (LINK)
      3. Ethereum (ETH)
      4. Synthetix (SNX)
      5. Solana (SOL)
   6. Bitcoin Stats Overview
   7. Wallets
   8. Portfolio Tracking Tools / Apps
   9. Info sources
   10. Charting
   11. Common exchanges
   12. Staking
   13. Crypto Cards
   14. Crypto Bots

 

Crypto Trading 101

Find below some resources you may find usefull if you’re making your first steps into crypto investing / trading!

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Blockchain for beginners (infographic)

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12 of the most commonly-used Technical Indicators

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Candlestick patterns

Bullish Channel Up chart pattern

Ascending Triangle

Descending Triangle

Example: TNB emerging from Descending Triangle.

Symmetrical Triangle

Example: BOA emerging of a Symmetrical Triangle

Head and shoulders

Description: Three successive peaks: middle is the highest and the two outside lower and relatively equal in height. It forms after an uptrend and often signals upcoming trend reversal (from bullish to bearish). The head and shoulders pattern is believed to be one of the most reliable trend reversal patterns.

Trade: Wait for pattern to complete and price to break out – to move lower than the neckline after the peak of the right shoulder. The most common entry point is when a breakout occurs – the neckline is broken and a SELL trade is taken.

Inverse Head and Shoulders

Description: Three successive peaks: middle is the lowest and the two outside higher and relatively equal in height. It forms after a downtrend and often signals upcoming trend reversal (from bearish to bullish).

Trade: Wait for pattern to complete and price to break out – to move above the neckline. The most common entry point is when a breakout occurs – the neckline is broken and a BUY trade is taken.

Example: COTI emerging of a Inverse Head and Shoulders

Channel Down and Channel Up

Description: Trading range between diagonal parallel lines. It forms when an up or downtrend is formed between parallel support and resistance lines. It suggests either a possible reversal in the trend or a change in the slope of the current trend.

Example: BADGER emerging of a Channel Down

Example: MITH emerging of a Channel up

Bullish and Bearish Flag

Description: Short term (shorter time interval) small rectangle trading range between diagonal parallel lines. It moves counter to the prevailing price trend observed in a longer time frame on a price chart. It forms typically following a sharp advance or decline and often indicates a small change in direction (or areas of consolidation) before the previous trend resumes.

Flag patterns can be either upward trending (bullish flag) or downward trending (bearish flag). Flag pattern is among the most reliable continuation patterns that traders use because it generates a setup for entering an existing trend that is ready to continue.

Example: OIN breakout of a Flag

Falling Wedge

Description: Two converging lines slanted downward. It usually forms after a downtrend and suggests a potential bullish reversal in the original downtrend. However, it can also appear in an uptrend, in which case, it indicates a likely continuation of that trend. Either way, Falling Wedge typically results in a bullish breakout. Falling Wedge tends to be a more reliable indicator than a rising wedge.

Trade: When price breaks the upper trend line the price is expected to trend higher. Emerging patterns (before a breakout occurs) can be traded by swing traders between the convergence lines; however, most traders should wait for a completed pattern with a breakout and then place a BUY order.

Example: CRU emerging from Falling Wedge

Rising Wedge

Description: Two converging lines slanted upward. It usually forms after an uptrend but can also occur during a downtrend. There’s usually declining volume as the price rises through the pattern (i.e. price/volume divergence). Rising wedge typically results in a breakdown (bearish).

Trade: Emerging patterns (before a breakout occurs) can be traded by swing traders between the convergence lines; however, most traders should wait for a completed pattern with a breakdown and then place a short sell order.

Example: XMR emerging from Rising Wedge

Double Bottom

Description: Two consecutive, roughly equal troughs with a moderate peak in between (resembles a “W” shape). This powerful chart pattern occurs after an extended downtrend and often represents a reversal pattern that indicates a minor, if not long term, change from a downtrend to an uptrend (i.e. bullish). A spike in volume often occurs during the two upward price movements in the pattern. These spikes in volume are a strong indication of upward price pressure and help confirm a successful double bottom pattern.

Trade: Place a BUY order when the price breaks through the resistance line (neckline) and completes the pattern.

Double Top

Description: Two consecutive, roughly equal peaks with a moderate trough in between (resembles an “M” shape). This powerful chart pattern occurs after an extended uptrend and often represents a reversal pattern that indicates a minor, if not long term, change from a uptrend to an downtrend (i.e. bearish).

Trade: Place a SELL order when the price breaks through the support line (neckline) and completes the pattern.

Triple Bottom

Description: Three consecutive, roughly equal troughs which may at first resemble a double bottom. These troughts represent failed attempts to break through an area of support. Each test of support is typically accompanied by decreasing volume, until a breakout in price occurs with an increase in volume. The pattern occurs after an extended downtrend and often represents a reversal pattern that indicates a minor, if not long term, change from a downtrend to an uptrend (i.e. bullish).

Trade: Place a BUY order when the price breaks through the resistance line and completes the pattern.

Triple Top

Description: Three consecutive, roughly equal peaks which may at first resemble a double top. These peaks represent failed attempts to break through an area of resistance. Each test of resistance is typically accompanied by decreasing volume, until a breakout in price occurs with an increase in volume. It occurs after an extended uptrend and often represents a reversal pattern that indicates a minor, if not long term, change from an uptrend to a downtrend (i.e. bearish). Trading volume trends should also be employed to confirm the strength of the signal.

Trade: Place a SELL order when the price breaks through the support line and completes the pattern.

Bullish and Bearish Pennant

Description: A small converging symmetrical triangle (called Pennant). It forms typically following a sharp advance (bullish) / decline (bearish), followed by a brief triangular shaped consolidation in price (a small change in direction), before the previous uptrend (bullish) / downtrend (bearish) resumes. The period of consolidation should have lower volume and the breakouts should occur on higher volume. If there isn’t a flagpole (sharp advance / decline), then it’s a triangle and not a Pennant. Also, Pennants is a short-term pattern, unlike a triangle.

Example: BEAM emerging Pennant

Trade: Traders look for a breakout above the Pennant resistance (bullish) / support (bearish) line to take advantage of the renewed momentum.

Rectangle

Description: The rectangle pattern characterizes a pause in trend whereby price moves sideways between a parallel support and resistance zone. The pattern usually represents a consolidation in price before continuing in the original direction of the existing trend (up or down).

Trade: A swing trader can trade an emerging rectangle formation by buying at support and selling at resistance. A trend trader just waits for a breakout in the original direction of the trend with a candle close below/above the support/resistance depending on trend direction – enter at the candle close.

Example: ULTRA rectangle pattern

Support / Resistance

Description: Key levels are simply horizontal support or resistance areas. This means that the peaks or troughs in the price graph line up to a horizontal psychological barrier. Support and resistance lines are critical concepts in technical analysis. These are areas where buyers deem an asset attractive to buy (support) or too expensive (resistance).

Trade: there are 3 ways to skin this cat:

1. Key level approach. The first type of trade opportunity is when the price has bounced off a key level and moved away, and is now yet again approaching that level.

Example: TFT emerging of a Horizontal resistance

1. Key level breakout. When key level is breached the theory is that the momentum of the price will carry it some distance beyond the identified level. A breakout is identified when there is a definitive breach of the key level and it is presented together with a target level where one can expect the price to move towards.

Example: TLM resistance breakout

1. Key level bounce. Most of the time, prices will bounce off of the key horizontal lines, instead of breaking through (trade setup #2 above). So a trader could place an order to go Long when price touches the support line, or go Short (or Sell existing position) when price touches the resistance line.

ABCD pattern

Description: ABCD pattern captures the typical rhythmic pattern of the market, which traders use to identify trading opportunities. Since ABCD patterns work on different timeframes, they are widely used and form in both market uptrend and downtrend. ABCD patterns belong to the category of harmonic pattern that consists of two equivalent price legs.

Trade: ABCD patterns are easy to identify in a price chart, indicating high probability opportunities. They are used in predicting bullish and bearish reversals.

Example: EKT emerging of a ABCD pattern

Butterfly

Description: The butterfly pattern helps you identify the ending of a price movement, meaning that you can enter the market during the reversal of the price.

Example: CGLD emerging of a Butterfly

Success rates of various patterns.

What does “success rate” mean? It means that price achieved the target within one length of the pattern. So if the pattern was detected over 20 days, then the price target had to be achieved in 20 days after identifying the pattern.

Chart Patterns Cheat Sheet

These rules below apply to completed patterns (i.e. with breakouts).

Example: BNB (Binance Coin) formed an Ascending Triangle in an Uptrend, which typically resolves in a continuation of a trend => UP. And it did with a big candle and big volume, followed by another close or two above the triangle’s resistance line. Profit target is set using approximately the height of the triangle at the starting point.

Trading psychology

Some of the best trades you will ever make will be not being in a trade 😉

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What is

Find below a short and simple explanation concerning some of the most significant crypto projects.

AAVE (AAVE)

Aave allows users to lend and borrow cryptocurrencies in a decentralized and trustless manner.

In a nutshell, lenders deposit their funds into a “pool” from which users can then borrow.

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Chainlink (LINK)

Chainlink is a decentralized oracle network that provides real-world data to smart contracts on the blockchain.

Find Chainlink use cases here: https://blog.chain.link/44-ways-to-enhance-your-smart-contract-with-chainlink/.

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Ethereum (ETH)

The Ethereum blockchain is designed so that transactions can only take place when certain conditions are met. The rules deciding these conditions are called “smart contracts”. It’s an essential part of the what is Ethereum question.

Once one of these contracts is written, it can’t be changed. That’s why they are called “trustless” transactions. You don’t need to trust individuals on the network - if the conditions of the contract aren’t met, then it won’t happen.

A trustless global network that never goes offline.

Ethereum realtime streaming price, news, social media and community posts, and code checkins. Ethereum price quote.

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Synthetix (SNX)

Synthetix allows you to generate any asset (currency, gold, stocks etc) by using their native token SNX as collateral.

A large benefit of this is that you don’t need to go through the process of bringing those asset on-chain, but rather you can deal with a synthetic representation of them.

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Solana (SOL)

Solana is a fast, secure, and censorship resistant blockchain providing the open infrastructure required for global adoption.

As of 20 June 2021, Solana is the world’s most performant blockchain — currently, it can handle 50,000 transactions per second with 400 millisecond block times.

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Bitcoin Stats Overview

URL: stats.buybitcoinworldwide.com

Legend:

• 🍪: Using this tool.
• 💰: Freeware and/or may cost some money.

Wallets

Portfolio Tracking Tools / Apps

Info sources

Charting

Common exchanges

Staking

Crypto Cards

Crypto Bots

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