Hey Clay, I want to get
into crypto-trading,
I want to get into
cryptocurrency investing.
I know you're all about
technical analysis,
but does technical analysis actually work
with the cryptocurrency market?
Let's talk about it.
That's actually a super-good question,
and a very popular one
that I've been getting
as cryptocurrencies continue to fill
the headlines, and who knows, maybe
a couple of years from the time I do
this video, someone will go, what
are you talking about cryptocurrencies,
but I think they're here to stay.
In what form, I don't know.
But let's get to the question here,
and the question is, do charts work?
So let's just talk about
technical analysis,
the use of charts.
What actually is a chart?
A chart boiled down to its simplest kind
of common dominator is two things.
You have down here, volume, meaning
is there a market for it?
Are people exchanging something?
Something, I'm not saying stock,
I'm not saying options, just something.
Well let's run that test real quick.
Are people exchanging something
in the cryptocurrency market?
Well yeah, they're exchanging
currency, cryptocurrencies.
So yeah, alright, check.
The other big part of charting
is over here, price.
Or you could look at this as value.
So again, let's run it through the test.
Does that something
that they're exchanging
have a value, have a
price associated with it?
Well, in the cryptocurrency market,
of course it does.
I mean, a market by definition
is gonna have prices and values.
So once again, yeah, the
crypto market not only has
people exchanging something,
but that something
also has a price and value.
So yeah, absolutely, absolutely charts
can be used in the
world of cryptocurrency.
And I realize this is just
theory on a whiteboard,
and that's a totally fair point,
so what I'm gonna do is
take you to my desktop,
and before I get to my desktop,
I want you to watch a video chart analysis
that I did on Ripple, one of the
many cryptocurrencies out there.
And these video charts,
if you're not familiar,
I do them on a daily
basis, and I just talk
about the basics, but the basics even
in charts can be very, very powerful.
I really harp on it in the video
on my desktop, but I just want
to get it across right now too,
I'm not sitting here saying that charting
is the secret sauce, that charting
is the holy grail for cryptocurrency,
and it turn you into a millionaire.
I'm not saying that at all.
Are they a very useful tool?
Yes, 100% they are a useful tool.
Are they always perfect,
do they always work?
No, of course, not but
there is no such thing
as a perfect system in the market.
Like I said, I do reiterate that
as I get onto the screen, but I want you
to first, like I said, watch this video
that I've done beforehand,
and then I'm gonna take you
to my desktop and walk you through
what happened afterwords,
and you're gonna see
that, not only do technical analysis,
not only do charts work
with the crypto market,
but they can actually work very well.
So let's get to that
video, and then I'll see
you on my desktop.
And sitting between
these candlesticks here
representing one day's
worth of price action,
which is what you would normally see,
each one represents 30
minutes worth of time.
So while this here may look
like several day's worth of time,
it's actually just today's
price action broken down
into 30-minute time slices.
I look to this timeframe
kind of does a good job
of telling the quote
unquote story of a price,
and in this situation makes mapping out
a very logical question
quite straightforward.
And that question revolves around
the fact that over the past day or so,
Ripple has made a
really, really nice move.
I mean, when you consider where
the price was at these low points,
and then you consider
where it is right now,
and I just say that
where that is right now,
because the markets are open 24/7.
So I can't say the price closed there,
but that's currently where it is,
point here being that any rational person
is gonna say yeah, Ripple
has definitely made
a very nice bounce.
Now this leads to the valid question,
therefore of, but is there any sort
of true power behind this bounce?
Is there any sort of genuine strength,
or is this just some sort of knee-jerk
reaction dead cat bounce?
I have no idea, but like I said,
by using charts, we can make answering
that question very straightforward.
And in my mind, it all revolves around
the level down here, which is support
and I don't quite know the
value yet, what is that?
78 cents, why, or yeah, 78,
why is 78 cents so important?
Well hopefully, we can
all agree on the logic
that price movements with true power,
with genuine strength, the price
is gonna progress forward.
The price is not gonna
go back to where it was.
I'm assuming you're saying,
hey thanks captain obvious.
Of course a price movement with true power
is not gonna go back to where it was.
That would be a contradiction, exactly.
So with that mind, think about 78 cents.
Any sort of closes blow it, or worse yet,
if the price separates to the downside,
what would that be doing to the price?
That would literally be putting
the price right back inside
of this range of the chart
that it just broke out of.
Again, going back, not
a sign of true strength.
Whereas let's say the price pulls back,
so over the weekend pulls back
and then does something like this,
and then starts to work
its way back upwards.
What would you have in this situation?
Well, you'd have a set of lows right here,
you would have this
previous set right there.
If you picture each one
of those as stair steps,
well hey, now you have
stair steps progressing
in the upwards direction, and
that's the name of the game.
That's what a truly
strong move is gonna do,
it's gonna make progress forward,
and in this situation, I am defining,
quote unquote make progress as 78 cents.
Now what about areas of resistance?
So if this upwards move is going
to continue, where some of
these key battlegrounds at.
As it stands right now, the main level
of resistance, let's get that
changed to red for resistance,
and I almost put it right
where it needed to be.
But right up here, give or take around
the 96-cent mark, you
can see several occasions
over the past that prices
have been up around this area.
You go back here through
the history of the chart,
knock down the price there, knocked
it down, knocked it down,
so you get the idea.
But really in my opinion,
top priority right now
is not breaking levels of resistance,
top priority is over the weekend,
going through health consolidation
and beginning to build higher bases,
because as long as higher bases start
to be built, then that's
how this overall bounce
can pick up that much more steam
and maybe even potentially turn
into a reversal, but one step at a time,
that first step is
staying up above 78 cents.
Welcome to my desktop, and here
is the chart that should
look very familiar.
This is what it was looking like
as I did that video, which
you just got done watching.
And I want to really reiterate
the point of this is not
to try to come across
or make you think that technical analysis,
the use of charts, is some holy grail
that's perfect all the time, that
it's some sort of secret
sauce in the market,
there are nothing like that, it's a tool
that can be used, but
it is not a holy grail,
they are not perfect.
Does it work in this case?
Yes, as you're about
to see, it does indeed
work, however I don't want you to think,
I don't want to come across as somebody
that's trying to portray that hey,
if you let me teach you how to use charts,
then you're gonna just,
it's gonna be easy money,
it's gonna happen so fast because this
is the secret sauce, this
is the secret strategy, no.
They are a tool, they are used to manage
the unknown, but like anything else,
nothing is ever gonna be right.
If something was always right,
then by definition it
wouldn't work anymore,
because everybody would do it,
which would just kind of convolute
the effectiveness of it.
So let's just go through
it, and you're gonna see
like I said, you saw the video,
you saw me using the chart to talk
about kind of the things going forward,
so let's just kind of sit back
and then see how this all unfolds.
So, as time goes by, and again each one
of these represents 30 minutes of time.
So 30 minutes is going down and obviously
the key level to keep an
eye on is that 78-cent mark,
as that is what I really kind of base
the whole analysis on in the premise
that you heard me talk about.
So the price is just
kind of chugging along,
and all of a sudden, the
bears start to show up.
Price starts to drop, now the price
is starting to drop that much more.
And now things are getting really rough.
I mean, to think that not that long ago,
the price was up here around 90 cents,
now it's all the way down there,
and you can see the price
is dropping pretty quick.
It is approaching the green line support,
which I talked about, and right there,
went down to a low of .79594.
So let's just call it right there
at essentially 78, and then right there
you can see that right there once again,
at a basically 78 cents, as
far as where these lows are.
The low of this one was right there
at .77802, so we'll round up and there
it is right there at 78 cents,
and you can see now the price
has started to show some
signs of going sideways,
some signs of consolidation,
so we'll just kind
of let things unfold there.
And you can see now, what a coincidence,
I mean when you really stop and think
about it, the price rolled over
and was going down, and down, and down.
What a coincidence, what
a coincidence right there.
This is why I laugh, this is
why you should always look
at people with a skeptical eye
that says, charts are worthless,
charts are a total joke.
Past history tells you nothing,
that's all based on old information.
Now you should also look at somebody
with a skeptical eye if they're saying,
yeah, charts work all the time,
charts are the holy grail,
charts are the secret sauce, no.
There is definitely a middle ground there.
And I am trying to
convey, the middle ground
is that yeah, they have their use.
It's not always gonna work, but they have
their place, and when you can understand
a chart, you are able to
outline and manage risk
and reward and all that good stuff.
So watching the rest of this unfold,
and we'll kind of get
to it, but you can see
the bounce there
continues, and it continues
and it goes all the way
up as high as a $1.02.
And I ran the calculations on that,
and that was a 31% profit window.
Now, am I saying that you
would have absolutely nailed
and capitalized perfectly
on this 31% right here?
I am not saying that you
would have nailed 31%,
but let's say you maybe
played it half right.
That's still a nice 15%
gain all in the period
of basically just a few hours.
So I mean a few hours and getting 15%,
heck, let's just say you only got eight,
nine, 10% on it.
Given the context of it all happening
in the same day, I'm pretty
sure you can't walk down
to your local bank.
I mean you can, and if you do do this,
please record it, but hand your,
the bank teller some money and say,
hey, I want an 8%, I want
a 9%, I want a 10% return
by the end of the day,
and record their reaction.
They're gonna look at
you like a crazy person.
So keep things in context, a
very nice move happened here,
and this was all based on the chart.
And like I said, none of this happened
in hindsight, the chart was posted,
you heard me talk about all this,
and then surprise surprise, right off
of 78 cents is where the price bounced,
leading to, as you see
here, a 30% profit window
where even if you didn't
play it perfectly,
still plenty of opportunity
to make some money,
and that's the name of the game.
So, right here, prime example of a chart
working on Ripple, which of
course is a cryptocurrency.
Yeah, 30% in less than a day, like I said,
pretty nice profit window
even if you didn't quite
play it perfect, you played it half right,
a quarter right, and that's
still some nice percentages
given the amount of time,
and it was all dictated
by forming a logical entry
point for that trade,
and logical entry points,
logical exit points,
how to manage trades, and in a nutshell,
how to manage the unknown,
that is what technical analysis
and charts is all about,
because once again,
yes cryptocurrencies have volume,
something is changing hands, and yes,
they both have price and value associated
with that something that is exchanging
hands within the market.
If you are interested in learning charts,
I would love to help you out.
My only sales pitch to you is, if you like
all the other free content that I have
on my YouTube channel, have on my website,
then you will for sure
like my premium content
that I offer, so I'll
put a link down below
to the courses that I offer.
And sure, none of them are
called cryptocurrency trading,
or crypto-trading or anything like that,
but they're all teaching
you how to use a chart.
And as you saw, when you know how
to use a chart, then you're
about 95% of the way there
in terms of trading cryptos,
so give those courses a look.
Like I said, if you enjoy my free stuff.
If you hate this video, if you hate all
my other free stuff, then yeah,
definitely don't spend your
money on those courses.
But if you do like this stuff, then yeah,
you will definitely enjoy
that stuff, so check it out.
If you are out there
trading alone currently,
and maybe are in the market
looking for a community
to join to assist you in your trading,
or to just help you give
you another set of eyeballs,
then I do have a private trading community
where you can trade alongside me
and other experienced traders.
So what you see popping
up on the screen right now
is both an information
link, so if you click
on the Inner Circle one, that is going
to take you to the page where I explain
all the details of what exactly
come with the community,
both the chat room and the newsletter.
And then the other
image that has popped up
is a behind the scenes
tour, where you can see
exactly what is going to be
contained within the community.
I take you through like I
said, a behind the scenes tour
of everything, and that
way you'll know precisely
what you are getting when you join.
So definitely check that stuff out if you
are interested and thinking about wanting
to join a community, and let me know
if you have any questions.
