Some weekend Alpha

STAGE ANALYSIS: (Thread)

All markets have cycles. These cycles can be broken down into 4 technical stages

I am going to outline the stages here & tell you how to identify them as well as some tips on how to execute trade plans with stage analysis in mind

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The first stage in the cycle is called STAGE 1 BASING.

This is akin to a consolidation most of you may recognize. Characterized by low or declining volume most times. Often this volume will start to expand late in stage one even though prices stay relatively unchanged.

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This increase in volume late in the stage 1 cycle is an indication that dumping of the asset by disgruntled investors is no longer driving down the price.

This is a favorable signal and should be your first indication to start paying attention.

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This stage 1 basing pattern could go on for weeks, months, or even years. For that reason it is NOT ideal to enter into stage 1 long positions. This is contrary to what most of crypto twitter traders do.

Premature investors usually get impatient & sell early in stage 1.

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The rallies and declines in stage 1 often peak at the resistance high of the base range, and bottom close the the support low of the base range.

For this reason stage 1 is ONLY ideal for SCALPERS who look to capture many small moves within a very short time frame.

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The second stage is called the STAGE 2 UPTREND.

The most important thing in your trading career is your ENTRY. The ideal time to enter & buy is when a asset is swinging out of its base stage 1, & into the more dynamic advancing phase of stage 2 within the cycle.

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Now its getting good!

This thread will go on into Sunday. I will cover the next stages, risk management, and THE EXIT.

#AllTheAlphas #ExperienceMatters #StayTuned