BTCUSD IDEAL HEAD AND SHOULDER PATTERN
Here are the basic principles that I found in identifying and confirming this is indeed a reversal:
1. IDEAL HEAD AND SHOULDER PATTERN
- An ideal head and shoulder pattern consists of lower high (LH) and lower low (LL).
2. Support and Resistance
- Many people like me are anticipating the next "BUY ZONE" will be around the psychological support of $9,000. Unfortunately, it didn't hold and continue its momentum at $8,400.
3. Market Psychology(BONUS)
- Since it broke the $9,000 support and became resistance, I am expecting this to be remembered by a lot of buyers and hoping to get a break even price.
- Those people who will try to close/sell their holdings/position will cause a selling pressure that will push the price lower.
4. RSI
- Break of 30 RSI is not your typical "OVER SOLD". Yes, indeed. By textbook it is "OVER SOLD" but it is a sign of strength for the bears.
- If we are anticipating a valid reversal, we must look for a bullish divergence, but this divergence has to fall to "STRONG DIVERGENCE" category.
5. Price
- Most newbies blindly fall into the trap of buying the "dubi dubi dip dip, dubi dubi dip dip" (check it on ytube, it is a song by Willie Revillame) without considering the price momentum.
- There is a famous saying "DO NOT CATCH THE FALLING KNIFE".
- There are criteria that needs to be fulfilled before catching the falling knife.
To put it simply... Imagine there is a 18-wheeler truck running at 100km/h, if you will try to stop that truck chances are...
You won't survive!
Again... BASIC LAW OF PHYSICS!
You want that truck to slow down and exhaust its fuel before stopping it.
When that happens, you might have at least a higher probability or a GOOD CHANCE of stopping it.
Conclusion, just follow the price and where it is going.
Money is made not just by doing analysis.
We all know trading needs to have the ff:
Technical Analysis (YOUR EDGE)
Risk Management
Trading Psychology
Disclaimer: This is not a financial advise.
#tradeResponsibly
1. IDEAL HEAD AND SHOULDER PATTERN
- An ideal head and shoulder pattern consists of lower high (LH) and lower low (LL).
2. Support and Resistance
- Many people like me are anticipating the next "BUY ZONE" will be around the psychological support of $9,000. Unfortunately, it didn't hold and continue its momentum at $8,400.
3. Market Psychology(BONUS)
- Since it broke the $9,000 support and became resistance, I am expecting this to be remembered by a lot of buyers and hoping to get a break even price.
- Those people who will try to close/sell their holdings/position will cause a selling pressure that will push the price lower.
4. RSI
- Break of 30 RSI is not your typical "OVER SOLD". Yes, indeed. By textbook it is "OVER SOLD" but it is a sign of strength for the bears.
- If we are anticipating a valid reversal, we must look for a bullish divergence, but this divergence has to fall to "STRONG DIVERGENCE" category.
5. Price
- Most newbies blindly fall into the trap of buying the "dubi dubi dip dip, dubi dubi dip dip" (check it on ytube, it is a song by Willie Revillame) without considering the price momentum.
- There is a famous saying "DO NOT CATCH THE FALLING KNIFE".
- There are criteria that needs to be fulfilled before catching the falling knife.
To put it simply... Imagine there is a 18-wheeler truck running at 100km/h, if you will try to stop that truck chances are...
You won't survive!
Again... BASIC LAW OF PHYSICS!
You want that truck to slow down and exhaust its fuel before stopping it.
When that happens, you might have at least a higher probability or a GOOD CHANCE of stopping it.
Conclusion, just follow the price and where it is going.
Money is made not just by doing analysis.
We all know trading needs to have the ff:
Technical Analysis (YOUR EDGE)
Risk Management
Trading Psychology
Disclaimer: This is not a financial advise.
#tradeResponsibly
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