How do we trade Crypto Markets in a Channel?

Good Morning Fellow Cryptonians

The crypto space has decided to move lower in the last 3 days (as we can see from chart 1 attached, the last 3 RED candles) and move from the higher $41,500 to currently (at the time of  writing) $38,000. It seems we are playing a game of cat and mouse at the moment, as we move once again in no-man’s land, waiting for confirmation of where the market wants to move.

HOW DO WE PROFIT OR MINIMIZE LOSSES?

HODLERS: If I was just buying and holding, I would just wait for the major trend to come into view and tell me if we have entered a bear market or if this is just a major correction. As mentioned in the previous post the amount of coins you have is not changing if the market moves up or down. If you are in for the long term just look at the macro trend, don’t worry about small daily fluctuations. So far we have returned to no-man’s land and are waiting for the market to tell us where it wants to move to.

SHORT TERM TRADERS: If you are doing daily, hourly or minute trading. I would be cautious and aware of the swings and support and resistance levels. Personally every night at around 11:45pm I review the charts and move some stop losses based on where the market is heading during the NY session. I also close some of the daily trading positions that have made  profits. Then in the morning reopen these positions if the market has moved lower.

For traders… in these confusing times, an advance strategy is to put your account in Delta neutral, meaning you have the same bitcoin value as a buy as you have the sell. This means your account remains the same value no matter if bitcoin goes up or down. As one position it makes money whilst the other is losing money. This is a hedged account with positions on both sides. I explain this in the advance trading training in details. This is a good strategy if you believe that the market will move down and then rebound back up or move up, and then rebound down; moving in a channel. It’s also a good strategy before going to bed, so that you don’t get surprises in the morning and if the market moves down you can capitalize on some profits by closing the hedge position just above some key support points.

Another strategy for channel bound digital assets like Bitcoin etc, is to trade SUPPORT and RESITENCE levels. Once an asset support was able to hold strong, wait for confirmation (candle closure) and re enter with a buy order the market. If a resistance has hold strong, then as the market moves down again re-enter with a short position. 

 CONCLUSION

Everything in life has cycles. The seasons, the days, life, etc… as well as the crypto market, which is a fractal, a micro pattern with the macro pattern of life. So be patient, Spring and Summer will come.

I hope this helps you all. Good luck, stay safe, stay patient and learn as much as you can. This is a life skill that can truly change everything!

Be well, be safe, and stay strong

Much Light

Paolo T.