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Trading Methodology This document is an attempt to capture Quickfinger Luc’s trading approach and was compiled from his Steemit Blog, Slack videos and comments. Please visit and upvote Luc’s blog here- https://steemit.com/@quickfingersluc Notes compiled by @Robert “Safety is the first Priority” Buy Safely Under the base / never lose money / only take the safest trades This method only requires that you see things a certain way and develop the patience to wait for a clear opportunity. That's really all there is to it. Each chart tells a story, you learn to read the story, and you buy in where the chart tell you to, then you start selling when you're in profit..it always comes down to the same thing, what are the odds, pattern recognition and history of the chart your trading 1. Find a strong base, qualify it by the strength of its bounce ( are there buyers in this market?) 2. Assess the probability of a trade being successful. 3. Look in the past to see how far panics usually fall. 4. Wait for the crack for a panic to happen. 5. Start layering in buy orders based on what you see from the past. Think in probabilities, if I look at the chart, and see other identical trades in the past, how many time has this worked out before? Say 7 times, then you have a 70% chance this will work out. So you read the chart and know what the story is and then you know what the probability is. Step One- Look for an argument, Markets with a lot of movement and a lot of people involved. This is a large group of people disagreeing on where the price should be. This will make the chart predictable. People who vote the price down, will have the other side of people who vote the price right back up .Look for support (where the price is supported and does not go below the support line) You can also have little arguments in between the bigger arguments. The bigger arguments are always the safest, but you can play the little ones, you just have to be quick. Step Two- Read the story of the chart, what is your probability of success? (about 30 seconds), a good chart you can trade that chart for months. You are looking for high probabilities of your trade becoming successful. Read the story of the chart and make sure you have a high probability of your trade working out. if you looked back in the chart and drawn in your bases, and the drawn in your safe circles (where you would have bought) then you can calculate your odds of success... after you do that you will know how safe this next circle will be.. as an example if you would have a had a profitable trade 9 times out of the last ten base cracks/panic dives.. then your next safety circle has a 90% chance of success.. that's a pretty safe circle.. Step Three- Set yourself alerts- You found markets that have a lots of volume, you evaluated the probabilities of success, now you plug in your alerts to the spots of where you would be buying. Selecting a chart and setting its view.
With charts, look for a good argument between the buyers and sellers Look for an argument/market that has a lot of movement and a lot of buyers/sellers who are not agreeing on a price, a chart with good volume and arguments on price.The chart will show the price going up and down, which provides a lot of opportunity. Read the story of the chart. Make sure you have a high probability of your trades always working out (Count the dips back to baseline). Read the chart of the market you are looking at, If all the panic dips would have all worked out, then you can feel confident that this next trade will too. Ask yourself; ● What is the probability of you winning? ● How many arguments have there been before support of the coin buys up the coin? (Look at the volume). Always look at least a month of data on the chart to get a real feel for how the coin reacts to surprises. You have to expand your view to 1-2 months of data so you really get a feel for how safe your trades would be The higher the time frame the easier the trades are. A 4 hour candle chart is super easy to draw bases on. If you can get used to the 1hr charts, you can very easy do the 4hr charts or 1 day charts. Something like ETH, the argument is so thick that locating bases would work on a 4 hour or 1 hour chart. A two month, 1hr candle chart is all you really need in cryptos, and it's the safest method- Example Its best to view chart by a “Per Day” time frame with 1 hour candles. Every Bar (Candle) will be for one hour. This slow time frame means it's a very slow trade, so when it cracks you have 8-10 hours sometimes to get into a trade. (Zoom out so that the price on the right side is apx .5 increments). ● If you work within a one hour chart, you have to expect to make your move within an hour or two. ● If you are going to work with a 4 hour chart, you have to expect your moves to happen within a few days. ● One hours candles on a chart of 2months data, these trades will take a day or two to complete. Support & Resistance and establishing “Bases” 1. What is a base? 2. What a real bounce looks like 3. Whats a crack 4. What is a base Another Example of drawing base- HERE 5. Let the crack play out 6. A base is defined by how much of a bounce you get off of it. 7. A base is also defined by the bounce they get off of them.. if there is no decent bounce then they are not bases
8. A chart with good “Support and Resistance”, will help to establish a good base. A base is where there is a good chunk of volume 9. I want to see a real big reaction bounce in order for me to qualify a base.I choose my bases by the bounce they receive- Example 10. You have to qualify your bases by bounces- Example When drawing a base, ask; ● Does this base, signify that there are buyers in the market? ● Some bases are strong and some are not. Example here ● Wait for a clear base ● Waiting for a dip into the “safe to buy zone. ● Does this base signify buyers in the market? (Only look back at the last 2 bases). ● Where are the buyers willing to step in and bounce the price? ● With the current news of the day, where was the last base, or maybe the base before that? Those are the only ones that count. ● Where there big bounces off those bases? ● Are there a lot of buyers in the market? How to tell; You will get a nice big bounce off the base. Example here. A little bounce, not so many buyers in that market. Big bounces means new buyers are taking over, big drops past support, the buyers are still there.This is the SURPRISE., this is where you buy. Another example ● How many buyers are in the market you are looking at? The support tells you how many buyers are in the market. This is so, when bad news pushes the price down, there are enough buyers to bring it back up. Example of an argument, with a surprise, then a crack and then a panic drop. ● Great examples of Luc’s trades and where he saw bases A chart with good “Support and Resistance”, will help to establish a good base. A base is where there is a good chunk of volume. Bases are defined by the bounce that happened off them, so you look back at all those bounces, you will see what should be defined as a base. A base is only drawn after you see that big bounce to qualify it, If there is no big bounce then there can be no big surprise in the future. The crowd makes the story, we only read it. (No Big Bounce= No Surprise). 1. Qualify your base by comparing the bounce to other bounces of the past, So if a price area received a big bounce reaction, then draw in that base and wait for a future crack. 2. Set alerts under that base you found.. if your alert hit you see a bunch of red bars, meaning there is some panic selling, then you are in the safe circle and you can start layering in. Every base is different and for different reasons. Sometimes it's actually just a number in people's heads like 200.. and nothing gets past 200 on the chart.. or it could be a price where something big happened like news.. and the news produced a bounce and now after that news no one can imagine that coin lower than where that news came out.. so you see, it's not mathematical.. but it is easily seen on a chart and then you just set your alerts and wait for a crack. When looking for bases, the LAST support is the only one that counts. Keep your bases current. Current support means current buyers.
As an example, ETH has enough support to buy back to where the crack was. Every “supporise/crack” gets a bounce and every “Crack”, gets a “Bounce” with ETH, you need good bounce back in order to qualify something as a base Every dip goes down a different amount, there is no way to predict the size of the panic drop you will get. You have to gauge the drop by the length of other drops in the past, so if you are approaching one of the deepest drops compared to all the others in the past 2 months or so, i would jump in heavy. Estimate what an average panic looks like by looking at the last 1-2 months of data. Panics are when bases are broken and all the buyers/holders are shaken out of there positions, they are surprised and panic sell, dropping the price.. right? ... ok, so then when the panic stops, people start buying it back up to previous support... ok.. so.. it can now trade around in that area, because we have just redefined a support and resistance You Should refer to previous base drops and figure out what is a normal length panic. ● Example of an average Panic Dive- HERE The green lines are your panics, notice the length of the lines, so this guides you on where you should put your buy orders.The blue lines are where prices returned to their bases after the panics, basically you need a panic of near the average length to be safe, so if you buy in that circle you drew, then you should just nibble and wait for a drop to get more. ● Looking at the average “Panic Dive”- HERE The most important part of the chart is that the price didn't bounce back to the previous base, on the earlier bases.. so that means there is extreme weakness showing on that chart, and so I wouldn't trade it. Don't play bounces off support, wait for a crack of support and then the panic dive- that's my play. You have to see it from the perspective of market reaction.. you need panic to buy in.. without panic, if you buy, you could be buying a grind lower.. that's why you want a large bounce, to show you strong buyers and to help you identify a base, and then, later when it cracks, you need to see a panic drop.. then you know you're getting in at the right place. I want the crack of the base and then a panic drop for me to get in.. the crowd has to panic as a result of the crack.. that's the best situation If you're working on a one hour bar chart, you have to read the history of the chart ask yourself; ● How far does a panic typically fall? ● What's the longest panic you can see within 2 months back? ● Is your present dip/panic anywhere near that deep a fall? ● Does every base crack get a bounce? In a two month period? that's the questions you ask yourself in your mind before you think of trading it.. so you know your odds. Those type of questions will guide you to get in a the right spot and not too early Strength of the bounce- if you don't get a strong bounce then you have to trade very small on the next crack or maybe not at all.. you need to look at 2months of chart action to know your odds of success on each of these coins.