People seemed to like my verge analysis. So, I decided to look at another one of those big spikers from December, TRX!
Please note, BTC is in an uncertain area at the moment which makes trading alts very risky.
I'll explain a little bit of the way I look at charts. In a broader scheme, I was taught to look at the market in 4 stages. These stages represent a cycle of the market. Stage 1 is the near the bottom, where neither buyers or sellers are winning. Stage 2, is when price starts to surge up and go on a BULL RUN. Stage 3 is when the bull run levels out and already hit it's peak. Stage 4 is the Bear market. When looking at the broader scheme of things, we would have known to get out of Tron COMPLETELY at around 900 to 1000 satoshi when it transitions from Stage 3 to Stage 4. As a trader, you never want to trade in stage 4. Most people try to play a game called "guess the bottom" This is risky. Most of the time I wait for things to level out, unless it's something I'm looking at from a long term perspective. For Tron, it looks like it's starting to level out and sit at what I would consider Stage 1. I believe this is the bottom because the Bollinger Bands are starting to curve closer. The MACD has a nice divergence and it has slightly crossed. The price is sitting around the 20 SMA, which it traded under for quite some time. 3 reasons to think the bottom is near. Now, stage 1 can last for a long time. I personally do not trade in stage 1 on things I don't really care for long term. I wait for a break through, or some indication that Stage 2 might start. For me, I may consider buying if it breaks above 640 satoshi and has a decent amount of volume come in or a break above the .236 Fib level. This would indicate that there's a chance stage 2 might be at play. It is very possible we are still in stage 4, which is why I like to wait. Over all, I expect sideways movement for now.
Remember, the bear market is not quite over just yet, even though things look good and it may very well be over. it's just too soon to say It's over at this very moment. This makes risk for trades a lot higher. Please remember that before buying any coin!
Komen
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My prediction that TRX would move sideways was correct. TRX looks like it's in stage 1. I would think it'd have a hard time breaking the low of 350 statoshi. Adding anywhere from 350 to 650 satoshi looks like a good long term add if you were looking to add long in TRX. I'm personally not long in TRX, I'm looking for shorter term trades, which I don't see one yet with TRX. But please note this analysis is based off TRX/BTC. In terms of USD, it's uncertain whether bitcoin will continue going lower.
I like this cyclic trading strategy. What are your thoughts on ADA? It seems to me that it has a ways to go finishing up stage 4 and then moving through stage 1, but a lot of analysts are calling for a quick recovery.
JonRulz
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@ashipka, I am sorry, I didn't see this comment until now. Whether you still seek my opinion or not, I'll let you know. I believe we are currently in stage 4 of ADA. Stage 4 can end at anytime tho, and we truly won't know it ended until stage 2 has occurred. So, there could be a reversal, but unless you are long term in ADA. Trading in stage 4 is risky. You may not get the best price, but the risk reduces. And as a trader, reducing risk is at the up most importance. Guessing the bottom is how people lose money, and everyone is guilty of it. When we try to guess the bottom to early. The chances of it being the bottom is slim. We need to wait for reversal indications, and I have yet to see one in ADA at this very moment. Now, that doesn't mean it can't go up and down in stage 4. It can. But the overall trend is still down. As we have saw with Bitcoin. BTC it is still in stage 4, and it has never yet came out of it yet in the broader sense. As an argument, people can look at things in a way with a short term perspective meaning 8k to 11.7k was stage 2, and we are now in stage 4 short term. But overall market since the beginning of 20k is still in stage 4. possibly transitioning to stage 1. There is no long term bullish sentiment as of yet, imo. Trading in this stage is risky if you aren't looking to hold, but anyone who bought at 6k (as I have) still made money. Waiting for stage 2 to start is a safer option, and one that should be used especially for newer traders, but determining stage 2 is hard, as there can be false break outs. This is why I like to find a nice MA that works for a particular stock to give me an idea whether we are out of stage 4. This is a method I learned from reading Stan Weinstein's book. An old book, but a great one still. As of now, since BTC is still in stage 4, I would consider just about all Crypto to be in stage 4. Since everything follows BTC risk in alts are at a higher risk.