Hi Diane, are you looking for BUY and SELL signals to get into BTC for the first time, or do you already have some?
You've indicated that you don't understand the charts but without some idea of how charting works it will only be a lucky guess as to whether or not you buy at the right time and sell at the right time.
Understanding how to read charts and technical analysis is not all that hard, but in the beginning some focused study is required.
Suggest you visit:
www.4shared.com (don't need to join up as a member, can just request initial downloads for free) and search for and download this presentation:
7 Chart Patterns That Consistently Make Money.pdf
It is 71 pages, and it reviews various chart patterns and signals to watch for, and will enable you to begin getting into the lingo.
As a beginning trader, you kinda want to have a win straight away, else you will get discouraged and perhaps abandon the idea. So I will walk through an example with PPC and NMC coming up in the next 10 days and show what to look for.
Have you thought of purchasing perhaps just 0.5 BTC and setting up an account on Cryptsy and try trading it to see if you can make it into 0.625 BTC? This is not a big gain, but its not a big risk either. In doing so, you will better understand the mechanics of trading and all the tools required.
Cryptsy as an exchange has some good and bad about it. All up its an good site and pretty easy to find your way around. The bad is it really bogs down when trading volume spikes, but for the example I will walk you through this won't matter because you will be making buy/sell decisions way before such volume spikes happen.
In terms of purchasing BTC, I just use
www.localbitcoins.com, go to the chosen Bitcoin Sellers bank and deposit the funds into their account. 30 mins later I have my Bitcoins. Yes, purchasing there can cost a premium, but if you are constantly watching, you will find some vendors come on and sell
closer to spot pricing. Just try to pick a vendor with a number of positive feedbacks. Most of these vendors are probably traders who have accumulated some wins and who are deciding to sell some to get some cash out, so they are not going to mess around and not send the Bitcoins. Besides which, to sell on localbitcoins.com, you have to lock the Bitcoins down in an Escrow account before you can create a listing.
My issue is I know our Aussie is falling like a rock right now, headed to 80 cents very soon. So I was happy to pick up some BTC back at 95 cents so I could begin trading with them, even if it involved a localbitcoins trade premium.
So once you have your 0.5 BTC at your Localbitcoins.com wallet, you can send it straight to your wallet at Cryptsy and begin trading with it. When you go to move your purchased BTC from localbitcoins, this is when that site deducts a small percentage as your fee for using it. Don't be discouraged, its just a small bit. We'll make up for that in trading.
In the meantime, have you downloaded the Bitcoin-qt wallet? If not you may wish to begin doing that now, as it takes some time to synchronize it to the blockchain. As the blockchain is getting so large, you will want to find the Bitcoin bootstrap file (9 GBytes) and download it to your local hard drive and then position it so that your Bitcoin wallet sync's from that at first. Then the remainder of the blockchain that is missing, your wallet will find from searching the web. Still, all up this can take a couple of days so its best to get it started now. The bootstrap file is found as a Torrent download, so you will need a free tool like microtorrent to decompress it.
Okay so you have your 0.5 BTC at Cryptsy (or whichever exchange you select) and you're ready to begin. Lets look at charts for PPC coming up.
The first thing you want to do is look at the full history of PPC and see if you can detect a trading channel that it is currently in. For most of these coins, the trading history is just not long enough so there is a bit of guess work involved.
To generate a trading channel, Bitcoinwisdom.com is a pretty good site, as it seems to have the most trading history for the Altcoins. You will want to get used to using Bitcoinwisdom. So if we select PPCBTC and turn on the volume indicator and the MACD indicator we are ready to begin.
This image generated from the 12 hour data is our starting point:
https://www.dropbox.com/s/j0euhs7fje...20Jan%2014.jpg
By selecting the two spike high full candles from around 4 December and 3 January we draw the first line. This is the top of the channel. Notice how it leads back to roughly the earliest PPC traded value around October 11th. Notice also how I am ignoring all the intra-12 hour spike high fluff around early December. This was an abnormality for PPC. Next we are looking for a parallel line representing the bottom of our channel. For this I have chosen the low point around November 22nd and the spike low on December 18th. The first thing we notice after drawing this line is that todays trading value is outside of our trend channel. This is a good thing perhaps.
Its OK for PPC to move outside the the trend channel, it just means that after a while there should be a sharp reversal back inside the channel. In this case, if the trend channel is correct, its a screaming BUYING OPPORTUNITY. But not so quick, we are just using this as a learning exercise and the point is we don't want to lose any of your new 0.5 BTC, we only want to gain. Because a win on this trade means you gain confidence, then you watch for your next opportunity and pick a winning trade, gaining confidence and on and on it goes.
So before we leave this image generated at bitcoinwisdom. Lets look at an indicator which will tell us when we should buy, the MACD.
The MACD is the Moving Average Convergence Divergence. Basically its a measure of where our two moving averages are at and how far apart they are at any given stage. We have two moving averages, one near term and one longer term. Some people just trade on the moving average crosses which works but we're looking for an indicator here as to when PPC will stop falling and reverse back into the trend channel.
Again notice this is a 12 hour chart. Notice also that the MACD hills (green bars) and valleys (red bars) have symmetry with the price movements. What we are looking for is the first occurrence of a red MACD bar which is hollow and then a 2nd one which is hollow but slightly shorter. This is a good indication that PPC has found its bottom and is ready to move up and back into the trend channel.
Next we move onto the 4 hour chart found here:
https://www.dropbox.com/s/fjuqrlwkdv...20Jan%2014.jpg
This is in Tradingview.com and its a most excellent free resource to track price movements. Now TradingView does not have as extensive longterm data for PPC, so I have begun by estimating the bottom line of our trend channel as best I could.
Next I have drawn in two lines, a green one for support at PPC's bump high on 31 Decmeber and a red line for resistance at PPC's full candle spike low on 7 January. This green and red line represent PPC's current trading channel and until we know otherwise, PPC should trade within this channel.
Notice also that we are currently trading well below PPC's Ichimoku cloud with what seems to be at this moment zero hope of testing it anytime soon.
So next we are looking at the symmetry of the lunar phases for trading. Roughly 3 days after the next new moon should all go to plan PPC will reach a spike top and we wish to profit from this move. From the chart right now PPC is looking rather sickly and why would anyone wish to buy it?
Well the smart investors right now perhaps have some buy orders in at 0.00604 just hoping it will spike lower to test support. Thats where mine are at.
Before we leave this chart, notice that the MACD here really tells us nothing. However, when you go into TradingView be sure to also turn on the Aroon indicator. Notice how the orange part of this indicator (bottom of image) shows a move back down to the bottom? Right now this is just what we are looking for particularly since I figure PPC will do very little in the next day or so but move sideways or if we are lucky drop further. Please do a spike low to 604 PPC!
OK that all out of the way time for the next image on PPC:
https://www.dropbox.com/s/21qot7qhcl...20Jan%2014.jpg
In this image I have drawn some arrows. Also we see our trend channel bottom line extended to the future.
The light green arrow represents what we see happening with PPC. The tip of that arrow represents about 2 days after the next New Moon or lets call it 1 February. So our trading time is now (22 Jan) until then (1 Feb) or a total of 11 days.
Again the lunar chart found here:
https://www.dropbox.com/s/mzxgtbvwje...ool-Change.jpg
Nice DOGE don't bite, Woof, Woof :-)
So all through this time we are watching BTC and its kinda doing its anticipated sideways movement, perhaps slightly down.
Well as a trader anticipating all this to happen, I'm wanting to grab my PPC at the lowest price I can (hopefully 0.00604). Remember, when everyone hates PPC this is when you want it. When everyone loves PPC, this is when you want to sell it.
You on the otherhand who are new to all this, after reading the recommended presentation from 4shared.com, are probably wise to do the following. Do not buy at 0.00604, but just wait.
The 3 other arrows shown in this image represent your buy and sell plan.
The first red arrow is the one you will be watching for confirmation that this breakout higher is really happening. You will want to see PPC move not only over its resistance line but also over its current Ichimoku cloud and in effect you will be surrendering the first 5-10%, perhaps even 15% of
the move to the market. What this means is you will not be duped by a fake out move. Remember you are just starting with 0.5 BTC and you don't want to lose a single Satoshi of it.
So as the values on the right hand side indicate you will pick a 0.00721 buy price and at Cryptsy you will wait till that happens and buy then.
Then towards the end of the move you will calculate what you anticipate to be the 100% point, and sell out at 95% of that, again surrendering 5% to the market. By doing so, you will be guaranteeing that there will be buyers just clamouring for your PPC because by that point things will be manic. So when you buy your PPC for 0.00721, that same instant you will create a sell order for your PPC's at 0.00938 and then walk away from it all and wait out the 10-11 days. This will mean that when Cryptsy gets really busy you won't be stuck doing page refreshes and finding timeouts on Cryptsy, your sell order will already be locked down. This for you will represent a 938/721 = 30% gain and on a trade of lets say 0.2 BTC you will walk away with 0.26 BTC.
In the meantime, knowing that NMC and XPM are also moving in unison, you may also have 0.2 BTC on NMC and 0.1 BTC on XPM during this time, doing similar buys.
So lets say all up on 0.5 BTC you average a 25% gain. This then will take your initial 0.5 BTC and make it 0.625 BTC. This will be nothing to write home to Mom about, but what it will do is allow you to gain some confidence in trading with 3 wins bang, bang, bang, and confidence is what you are seeking in the early stages of trading, not necessarily BTC or dollars.
I hope that this helps you and that you will take the steps to download all the tools and become acquainted with charting and technical analysis. If so, come April or May it could well be your buy/sell recommendations we are all watching for on here because you will have figured out how this whole thing works and through research on a certain coin none of us are watching, you will be able to provide us a valuable tip.
But without taking time to learn, and just waiting to hear "BUY" and "SELL", you might find your portfolio growth to be a bit lacking by May. Not to worry, heaps of time to learn and research. We are all still early on with this thing.
Best of luck in whichever way you choose to proceed from here. In the end it will all work out, because it always does. :-)
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Originally Posted by SomewhereInOz
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