Hi. I am completely new to technical analysis and have been learning from other members of the community. This is the first Idea that I have published. I believe that the MACD, RSI, forming of a wedge and trend lines are indicating bullish divergence on Power Ledger. I am really looking for feedback to see if I am doing this correctly. Any thoughts or advice would be greatly appreciated. Happy new year. I hope 2018 brings everyone reading this good health, happiness and prosperity.
Hey SoCr, well done for putting yourself out there. Your choice of crypto (POWR) is great and I def believe this will take off to higher highs.
Unfortunately your charting is not correct... The line you have drawn are in fact convergence and not divergence (exact opposite) - What you are looking for in divergence is when price ahs made a lower low and the indicator (RSI/MACD or other) fail to confirm and actually point upward in direct divergence with price. This is an early indication of a highly probable reversal in price.
Hope that helps.
SoCr
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@catalystcw, Hi. Thank you for the reply and kind words. If I have understood correctly, does this chart actually indicate that the upward price trend is reaching exhaustion and will result in a reversal and downward price movement?
catalystcw
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@SoCr, Not necessarily, to get a better picture of any market - always look at the bigger time frames. Also what does one refer to as a "price reversal"?
The lower the time frame, the more price reversals you will see which is relative to the Time Frame you are watching. A reveral on a 15min chart does not mean a price reversal on a 4 hour chart - do you understand what I mean?
So if you are a trader - you will possibly trade lower time frames like 1 hr and even as low as 15min and 5 min charts. If you are an investor - you will be more interested in the weekly and daily and possibly 4 hour charts.
If a market is bullish and price starts to reverse - you will see it happen on the lower time frames first and slowly move over to the larger TF's...
At the end of the day - it all boils down to your investment strategy - trading for short term, or investing for medium or long hold.
Right now, POWR is possibly going to see a pull back from this recent rally which to me is a chance to accumulate more - Overall the trend is very bullish for the medium and longer term HODL.
Hope that helps.
kometonja
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@catalystcw, Thanks for the explanation. I was wondering, how did you know about the price reversal? From what I see in other charts, POWR has formed inverse head and shoulders pattern. Previous resistance is now a support and all time hight (?) is a current resistance. If (when) it breaks up the resistance it will reach XX sats. Then you use fibonacci somehow to determine that value. What is the difference between fib and elliot waves? Sorry I know I could google it but your explanation is very clear.
SoCr
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@catalystcw, Sorry for my late reply. Thank you very much. This has been a great help to me and I appreciate you taking the time to explain things. My investment strategy to date has been medium to long term. I started mining coins in 2014 then progressed into trading. Without wanting to sound like I am blowing my own trumpet I am extremely good at research and fundamental analysis so by default my investment strategy has, for the most part, has been long term. I spend the majority of my time looking for cryptos that are undervalued and buying them as early and cheaply as possible. Genuine innovation is rare, disruptive innovation and disruptive technology is extremely rare so when I see something that ticks all the boxes I invest in it heavily. I have a portfolio of currencies at the moment and technical analysis is my biggest weakness. I decided to practice day and swing trading with POWR because, in my opinion, this is the most undervalued currency on the table at the moment. My aim is to accumulate more Power Ledger by day trading and swing trading. I thought, if I screw up I am going to end up with more POWR or more BTC and neither of those outcomes would be a bad thing. Ideally, I would like to strike a balance between the two. Either way I view it as a win-win. People missed something extremely significant about this coin when reviewing it, reviewing the ICO and making price predictions on POWR. MD Dave Martin spoke about the overlooked subject in the new year update video and I attribute the increase in value we have seen over the past few days to the fact that I think a lot more people have now picked up on what was previously overlooked. I will monitor things as they develop but just to put things into perspective when I decided to buy POWR ledger I did so with the intention to HODL the majority of my Power Ledger up until 2025 if need be. It is hard to make a price prediction for 2018 because dates haven't been announced for certain aspects of the roadmap. If they achieve their goal of implementing those aspects at some point in 2018 I wouldn't be surprised to see POWR achieve a value of $40 to $50.
Unfortunately your charting is not correct... The line you have drawn are in fact convergence and not divergence (exact opposite) - What you are looking for in divergence is when price ahs made a lower low and the indicator (RSI/MACD or other) fail to confirm and actually point upward in direct divergence with price. This is an early indication of a highly probable reversal in price.
Hope that helps.