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In theory, trading crypto is among the fastest
ways to make life-changing amounts of money.
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After all, some crypto traders have turned
hundreds of dollars into millions of dollars in
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just a few days. In practice, however, most crypto
traders will end up in the red, and some will lose
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all their money in a matter of minutes. This is
because trading crypto is not like trading other
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assets. That's why today we're going to tell you
everything you need to know about trading crypto
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starting from square one. By the end of this
video, you'll have all the knowledge you need
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to succeed. My name is Guy. Stay tuned. So, the
reason why crypto trading can be so profitable is
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because of one factor, emotions. The crypto market
is volatile, meaning that it's normal for prices
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to go up or down by 10 to 30% in a day. To put
things into perspective, if a stock goes up or
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down by more than 5% in a day, it's considered
volatile. In crypto, a 5% move can happen in a
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matter of minutes, sometimes seconds. This makes
traders feel emotional, especially if they're
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using a lot of money. When crypto prices go up,
they feel greed. When crypto prices go down,
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they feel fear. Now, believe it or not, but this
is the entire basis of trading assets. When people
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feel greed, they tend to buy, and when they feel
fear, they tend to sell. These emotions follow
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predictable patterns, and price action follows
suit. The first person to figure this out was
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in fact a Japanese rice merchant from the 1700s
named Hanma Monahisa. He invented the candlestick
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charts we use today and was the first to identify
the repetitive patterns in price that are created
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by fear and greed. These emotional patterns can be
found in every asset class, whether it's crypto,
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stocks, or indeed rice. The catch though is what
I mentioned a few moments ago, emotions. People
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trading rice probably don't get too emotional,
and most stock trading is done by emotionless
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algorithms and passive flows. By contrast, the
crypto market mainly consists of a combination of
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new crypto traders looking to get rich quick and
crypto whales, that is large holders of crypto,
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who try to manipulate these new traders. This
will change as more institutional investors and
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algorithms get involved, but for now that's
pretty much the playing field. Now, the good
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news is that this playing field results in lots of
emotions, which makes technical analysis much more
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effective in crypto. The caveat is that the crypto
whales know technical analysis, too, and they will
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manipulate prices to trick new crypto traders into
buying or selling at the worst possible times.
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So given this fact, it's worth remembering this
quote from Richard Woff, a trader from the 1900s
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who saw how big investors manipulated markets.
Quote, "All the fluctuations in the market and
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in all the various stocks should be studied as
if they were the result of one man's operations.
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Let us call him the composite man who in theory
sits behind the scenes and manipulates the stocks
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to your disadvantage if you do not understand the
game as he plays it and to your great profit if
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you do understand it. So then folks I ask you are
you ready to play? Are you ready to understand the
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game? If so then smash that like button to let
us know and subscribe to the channel and ping
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that notification bell so you don't miss the
next video. Okay, so with all of that in mind,
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let's start with the basics. Before you do
anything, you need to look at the price of BTC,
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the native cryptocurrency coin of the Bitcoin
blockchain. This is because BTC leads the rest
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of the crypto market. BTC needs to be rallying or
gradually rising for most other cryptos to rally.
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If BTC is crashing, it doesn't matter how bullish
the other cryptos look. Chances are they will fall
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along with BTC. Now, of course, the best way to
check BTC's price is to use a crypto exchange. For
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the purposes of this video, we'll be using Tubbit,
and that's because we have a crazy trading fee
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discount of up to 50% and up to $100,000 in signup
bonuses on offer there. This deal is completely
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free, by the way, but it probably won't be around
for long. So, all you need to do to claim it is
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to click the two-bit link in the description or
scan this QR code here. It'll take you to a page
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that looks like this. All you need there is your
email to sign up. No additional info required. It
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literally takes 15 seconds. So, do check it out.
Don't worry, I'll be waiting for you here. [Music]
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So once you've pulled up the BTC chart on Tubbit,
the first step is to remove all the indicators.
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You can do this by hovering over these indicators
and clicking X as you can see here. For now,
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we just want to identify the price trend. Next,
take note of the time frame the chart is set to.
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This info can be found near the top of the
chart. Set the time frame to daily and zoom
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out by scrolling down. Now, obviously, each candle
you see on the chart represents a day. Red candle
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means prices went down that day and green candle
means prices went up that day. With this in mind,
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it should be super easy to tell if BTC's price
has been trending higher over the last few days
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or trending lower over the last few days. As I
noted a few moments ago, BTC needs to be trending
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higher for other cryptos to rally. If BTC has been
trending lower, chances are other cryptos will be
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too. However, it's possible that the trend could
change. This is where the bodies and the wicks
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come in. The body is the thick part of the candle.
Sometimes it's small. The wick at the top of the
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candle shows you the highest price that was hit
that day, and the wick at the bottom shows you
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the lowest price hit that day. Sometimes the wicks
are barely visible. If most of the recent candles
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are mostly body and no wick, this tells you the
trend is strong regardless of the direction. If
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the candle is mostly wick and no body, however,
then this tells you the trend is weak. Now,
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as a rule of thumb, a large wick on the top of
a candle means lots of people are selling, while
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a large wick at the bottom of a candle means lots
of people are buying. Logically, long wicks on top
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suggest that prices could trend lower. Whereas
long wicks on the bottom suggest prices could
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trend higher. And if the candle is barely visible,
almost no wick and no body, then that suggests the
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trend is reversing regardless of the direction.
If the candles are green but getting smaller,
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then that means prices could start falling.
If the candles are red but getting smaller,
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then that means prices could start rallying.
This is candlestick analysis in a nutshell and
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we'll leave a link to the popular candlestick
patterns down below. So once you've figured out
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whether BTC is trending up or down and assessed
whether this trend could reverse or continue,
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the next step is to figure out how high or low BTC
could go in the short term. You should know that
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there are many ways to do this and everyone has
their own style. So, be sure to try out all the
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different ways I'm about to show you to figure
out which method works best for you. Okay. The
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first way to figure out how high or low BTC
could go in the short term is to look at the
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levels where prices clustered before. These levels
tend to be around nice round numbers like 91K or
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100K or 85K. It should be pretty easy to identify
at least a few of these key levels. Try to focus
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on the most significant ones. And pro tip, if you
look on the bottom left of the BTC chart on TUBIT,
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you'll notice there's a little tab you can click
that expands a selection of tools you can use to
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draw. Note that you'll need to have the trading
view view enabled on the top. Near the top of
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the toolbar on the left, you'll notice there's a
tool with a line called trend line. You can click
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on it and use it to help you identify key levels.
If the key level is above the current price, then
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it's called resistance. And if the key level is
below the current price, then it's called support.
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As you learn, you'll notice that BTC will chop
between these key levels sometimes for prolonged
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periods. And trading these choppy conditions
can be difficult, and that's just because the
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emotions that fuel the big moves are muted. So
technical analysis doesn't work as well. Another
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important thing to note is that when BTC breaks
above or below a key level, it's common for it to
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retest that level before continuing the trend. For
example, suppose BTC is below a key level of 95K.
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That means 95K is resistance. If BTC's price
breaks above this key level, chances are that
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it will fall back to 95K before rallying higher,
assuming the trend has flipped bullish. According
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to the candlestick analysis, the same is true if
BTC is falling. Suppose BTC is above a key level
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of 100K. This means 100K is support. If BTC's
price breaks below this key level, chances are
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it will rally back to 100K before falling more,
assuming the trend has flipped bearish, according
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to the candlestick analysis. In other words,
BTC doesn't go up only or down only. Every rally
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is followed by a correction and every crash is
followed by a rally. Now figuring out exactly how
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high or low BTC could go can be done by looking at
the difference between key levels. For instance,
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suppose BTC was chopping between 95K and 100K and
has now broken above 100K. All you need to do is
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take the price difference between these two levels
and add it to the resistance level. That means
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adding 5K to 100K. That gives us a target of 105K
for BTC. And the same is true if BTC breaks below
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95K after chopping between 95 and 100K. The price
difference would still be 5K, but this time we
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subtract it from the support level. That gives us
a target of 90K for BTC. Just remember that every
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rally is followed by a correction and every crash
is followed by a rally. This means BTC could fall
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back to 100K after first breaking above and rally
back up to 95K after first breaking below. If that
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100K level holds as a new level of support, then
BTC will likely bounce and hit that 105K target.
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On the flip side, if that 95K level holds as
a new zone of resistance, then BTC will likely
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get rejected and fall to that 90K target. This is
something that most crypto traders tend to forget,
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and it's why so many lose money. Another thing
that they forget is that crypto whales can see
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these levels, too. They know that other traders
will be looking at these key levels, particularly
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new traders. The result is that they will try and
manipulate BTC so that its price rallies higher or
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falls lower than traders expect. This makes these
traders emotional and tricks them into buying or
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selling at the wrong time. Remember what Woff
said. Now, another way to figure out whether
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BTC's price trend is about to change and how high
or low it could go is to use technical indicators.
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If used properly, technical indicators can even
give you a sense of exactly when the trend is
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about to change and exactly when a price target
could be hit. Now, there are literally thousands
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of different technical analysis indicators out
there. Some are free, others are paid. And in
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our opinion, the free indicators are sufficient
because every technical analysis indicator is
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ultimately looking at the same things through
a slightly different lens. I'll remind you
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that everyone has their own style. And this is
truest when it comes to which technical analysis
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indicators they like to use. On Tubbit, you can
find a bunch of free technical analysis indicators
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up near where you select the time frame. Clicking
on the technical indicator ticker will open up a
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long list of indicators. Now, we don't have time
to go through all of these here, but we reckon
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you don't need all of them either. The first three
indicators you need to know are volume, the RSI,
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and the MACD, which you can search for manually.
Now, the volume is super straightforward. It just
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shows you how much trading volume is inside
the time frame of the candle. In this case,
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one day. If trading volume is slowly rising, this
means the trend is strengthening regardless of the
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direction. Don't worry too much about the color of
the trading volume bars. As for the RSI, it stands
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for relative strength index, and it's a super easy
way of figuring out whether a crypto is overbought
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or oversold. If the RSI is high, then it means
BTC is overbought, and that means it could start
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crashing soon. On the flip side, if the RSI is
low, then this means BTC is oversold, and that
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means it could start rallying soon. Most of the
time, the RSI is somewhere in the middle. As for
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the MACD, it stands for moving average convergence
divergence. It sounds complex, but it's actually
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super simple. When the bars are green, the price
trend is positive. When the bars are red, the
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price trend is negative. When the two lines cross,
that means the price trend is about to change.
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Simple as. Another two technical indicators you
need to know about are the moving average and the
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Ballinger bands. As the term suggests, the moving
average tells you the average price of BTC over a
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given period. Unfortunately, you need to manually
add the moving averages. Thankfully though, this
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is fairly easy to do. First, search for the moving
average from the indicator selection and select it
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twice. In the top left, you should see both moving
average indicators appear set to some default
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time frame like 9. hover over each indicator and
manually select 50 for one moving average and 200
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for the other moving average. As you can see here,
now the reason why we're using the 50 and 200
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periods is essentially because these are the most
significant mainly on the daily. The 50-day moving
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average is a strong zone of resistance when BTC
is below it and it's a strong zone of support when
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BTC is above it. Same idea for the 200-day moving
average. In this sense, you can think of the
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50-day and 200-day moving averages as being hidden
key levels for BTC. The difference is that these
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two moving averages also show you BTC's trend.
When the 50-day moving average crosses the 200-day
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moving average from below, this is called a golden
cross, and it suggests that BTC is entering a
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long-term uptrend. When the 50-day moving average
crosses the 200 day moving average from above,
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this is called a death cross and it suggests BTC
is entering a long-term downtrend. When it comes
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to shorter term trend changes, this is where the
Ballinger bands come in handy. Now, the middle
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band is effectively a moving average, just like
the 50-day or the 200 day. The upper band shows
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you how high BTC could potentially go if it pumps,
whereas the lower band shows you how low BTC could
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potentially go if it dumps. BTC typically trades
around the Ballinger band moving average. If BTC
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is above the Ballinger band moving average, then
it's in a short-term bullish trend, and if it's
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below, then it's in a short-term bearish trend.
If BTC trades in the same range for a long time,
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the outer bands will come closer to the Ballinger
band moving average, creating a squeeze. And this
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foreshadows a change in BTC's trend, be it to the
upside or the downside. Very useful. Now, by this
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point, you're probably asking, "But this is just
for BTC. What about all the other cryptos I want
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to trade?" Well, you're in luck because everything
I just told you applies to other cryptos, too.
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It tends to work best on larger altcoins,
but it works on most smaller altcoins,
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too. The more emotions, the better. The reason
why we focused on BTC is because you must do
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this analysis on BTC first before you do it for
any other crypto. Once you've figured out whether
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BTC is in a bullish or bearish trend and whether
this trend is likely to continue or change, well,
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only then can you start looking at trading other
cryptos. There are just two more things to keep
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in mind, and that's manipulation and leverage. The
smaller a crypto is, the easier it is for crypto
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whales to manipulate. This can make it very
hard to trade because there's a higher chance
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that the key levels you've identified will be
invalidated to try and mess up your strategy. For
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larger cryptos, the main thing to keep in mind is
leverage. Traders will often use lots of leverage
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when trading larger altcoins to boost their
returns. This often results in lots of unexpected
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volatility with prices rallying more than expected
because of a short squeeze and prices crashing
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more than expected because of long liquidations.
Crypto whales will often try to trigger these
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to their benefit. That's why you should consider
avoiding leverage trading until you've figured out
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a crypto trading strategy that works well for you
and have gotten used to the extreme volatility of
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the crypto market. Better yet, keep track of your
trades on paper instead of using real money. Only
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once you feel confident that you can consistently
turn a profit. Well, then start using real money,
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not financial advice. And finally, remember to
be patient. Even though there are traders that
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have made millions of dollars in a few days, the
fact of the matter is that these kinds of gains
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take time. That's because each trade takes
time. If you put on a trade and your target
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isn't hit within a few minutes, or a few hours,
be patient. Some trades can take days, weeks,
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even months to complete. If you're confident, wait
until your targets are hit. Once you've practiced
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enough patience, you'll come to find that more
and more of your trades go the way that you want,
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and eventually you'll realize that was the
hardest part of all, sticking to your targets
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until they're hit. Put differently, the secret
to success isn't to constantly trade. It's to
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wait until the time is right. Take aim, pull the
trigger, and then wait until the target is hit.
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Quality over quantity, in other words. Okay,
folks. If you made it this far and you want
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to keep learning about crypto trading or want
more realtime analysis of crypto prices, then
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be sure to check out our trading channel, Coinbau
Trading. The link will be down in the description.
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As always, thank you all for watching and I'll
see you in the next one. This is Guy signing off.
