Many new to trading and investing have trouble sometimes with a TA one day being bull, the next day a bear. Or one being Bull and one Bear in the same day! This not only causes confusion but a rant of comments from those that do no understand the difference. Let me explain as I see attacks through comments not only on my posts but others as well. Pointing out a failed trade does NOT prove your a genius, it means you do NOT understand trading. Your a newbie yes The Truth Hurts!
There are Primarily 3 types of traders/Investors.
Swing Trader - The left chart is a typical swing trader chart. Note the triangle/pennant, a medium term chart (1hr for cryptos) and the standard stop loss and multiple target points. Most TA's posting on TV are swing traders as you see the pennants, flags, H&S, MA's, EW and Fibb points. They normally are looking for a risk to reward of greater than 1:3.5. This means they only need to be right 3 out of 10 times to make money. They are looking at overall price swings, in a specific trend. They use stop loss and stop limits for protection. I personally do NOT swing trade volatile market corrections, but this is just me personally. This is why you saw me post, I closed all my trades and went long the dollar a week ago. Swing trading is risky in volatile markets. Note MarcPmarkets post.
Day Trader - The middle chart, is a day trading chart. Note the different indicators. Day traders are not looking for 10-20% gains (but they do happen), we are looking for much smaller 3-5% moves in a day. This is why I prefer day trading crytpos to Swing trading. Again this is a personal preference. My stops are much tighter and hence I do not use stop loss or limit orders, I monitor the screen for signals indicating when I should exit at a loss or pull in profits. This is a definite ride the wave play. Notice the target prices are at resistance and support lines, not fibb. We are smack in the middle which is a good day trading setup. I do not care which way the move breaks from the consolidation box, I will buy or sell the breakout and monitor every minute till the trade ends. Note the adjusted HMAs for the chart. Day trading volatile markets in my opinion is less risky, but you are doing many more trades. Sometimes 10-15 in a day. This is why it would be impossible for me to post them all. And sometimes I have trades within trades but that is for another article. 3% a day beats 15% a week but losses mount quick!
Investor - As an investor I know it will continue up, so I am looking at a longer term chart (daily in this case). Note this is a LOG chart with a trend line. I really don't care about RSI's, PPO's or shorter term trends, I only care about entry points and maybe some longer term trades with extra cash. I want to know where to add to my position. Hence the 50/100/150 day EMA. I do like the EMA for this chart. As you can see as an investor WITH A CURRENT position, I'm not adding here, I'm just in hold mode and when it dips I will add to my positionl like the dip to $3000. Those dips I may even add some for a longer term trade. Even as an investor you want some cash, 10% is a good allocation. This allows you to buy the dips, and sell the runs reducing cost/coin.
My portfolio consists of 70% investments which are long term holdings. I do not sell I only add. Now occasionally I will borrow from this to do a short, no different then selling covered options. But I MUST buy back. The other 30% is allocated for trading 15% cash 15% trades. In very bullish markets I may be 30% trades, in volatile markets (like the one we are in) I'm 20-30% cash, looking for daytrades or fire sales. (note not posting any swing trades)
Before entering a trade not only must you define the risk reward, but the type of trade it is, and how it fits in your portfolio strategy.
So when you see short in the title block this does not mean I'm selling my investments, it means I am making a short term trade as a swing or daytrader.
There's also the cycle trader, like myself. I HODL some long-term, but that's a different game. To a large extent, I buy alts when they bottom out -
selectively and at what seems to be the best time for each -, and then trade sell them out of the portfolio at market highs when I sense a bearish market coming... also selectively dumping depending on individual performance. This entails fewer trading operations, but still more than the long term investor who HODLs.
Hi. Realy good stuff you have here :) Could you post some other time examples of each type of trade (examples of entry;exit points) I wonder what time intervals do you use with each style (swing - 15min?, daytrader - 1h?, investor - 1d/4h?)
SedmicaSedem
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@Konran_Taisa, It was clear and easy to understand >}<
goldbug1
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@Konran_Taisa, I posted them in the chart above. daytraders are looking at 15minutes and less. swing longer time intervals but depends on the coin.
Thanks
secrets2trade
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Nice as always. I expect also soon a pullback but for now, i see no reasons to call a bigger pullback coming at the moment. I also never sell i only add to my positions. Why should I sell a market when it's clearly bullish. That's why so many people get burned in cryptos.
SafeGamble
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@secrets2trade, because even bullish markets have bear cycles and swinging can increase your position.
secrets2trade
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@SafeGamble, Because they have bear cycles doesn't mean you should short these cycle in my opinion.
selectively and at what seems to be the best time for each -, and then trade sell them out of the portfolio at market highs when I sense a bearish market coming... also selectively dumping depending on individual performance. This entails fewer trading operations, but still more than the long term investor who HODLs.