Part 2 Technical Analysis - Real Trading

The other day we talked about what technical analysis is and its principles. Today let's apply it in trading.

Regarding the theory of indicators, let's skip that. You can research it yourself. I will just provide practical application methods.

In reality, there are many trading styles. However, I find that the reversal trading style suits crypto the best - in my personal opinion.

But the important question remains: when does it reverse?

🔥To know when it reverses, I often use EMA or MACD.

📊For example: looking at the current 5-minute chart of BTC. It's very simple.

💥When the price is decreasing, and begins to show an upward trend. When the EMA 13 crosses EMA 21 and the price starts to rise above the two EMA lines, it confirms the upward trend returning.

💥And vice versa. When the price is increasing and begins to show signs of decreasing, when EMA 13 crosses down through EMA 21 and the price drops below the two EMA lines, we have confirmation of a price decrease.

And this process keeps repeating.

🚩Here is one issue that I mention quite often: all indicators are calculated using the closing price of the candle, opening price of the candle... and time. Therefore, all indicators will appear after the price has moved. So you can see, EMA will never cross right at the peak or trough, so forget about the idea of catching the bottom or the top. Instead, focus on waiting for signals.

🚩And in reality, when the price fluctuates too strongly, the crossing will not keep up with the price increase or decrease. Therefore, after a crossing, wait for 1 or 2 candles to confirm that the price is actually above the EMA.

Of course, EMA is not everything. It needs to be combined with many other indicators to be "sure."

But for starters, let's practice looking and waiting for crossings. Practicing on the 5-minute frame with low volume and moderate stop-loss and take-profit will be very beneficial.