Trade Crypto Currency - Think in Milestones!

When we trade equities or assets including crypto...

When we trade equities or assets including crypto currencies we have to think in milestones. In technical analysis this is the support and resistance that the price action will face. These ranges are either a line in the sand or milestone for our assets and how we determine entries and exits.

So how do we determine what the supports and resistances are?

Supports and resistances are determined by historical price action (previous price points or ranges where the price hovered), moving averages (the weight of time and numbers) and trendlines. So first off, never fight a trend, if its going down its going down - see the recent pull backs in Bitcoin and Ethereum for why we dont fight trends.

We also don't come up up with crazy price targets. Let's use bitcoin for this as an example. Upon loosing $3000 per coin, BTC pulled back to the $2100s. Wow what a drop, and even still it appears that the price recovery is an uphill battle.

So yes, while mathematically everyone is expecting to see $50, 000 per coin, as traders we need to be pragmatic and pedantic. In order for Bitcoin to reach say a more modest price of $4000 as goldman sachs($3900) is calling for, we need to see $3000 breakout and backtest before the next leg. On the other hand, we also need to see Bitcoin continue to make price progression, we need to see it hold $2300s and worst case the $2100.

That's right the journey to the moon isn't necessarily going to be straight up and this is why chartists and traders think in areas of support and resistance. Good luck and happy trading!

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Not trading or investment advice