25/1/2018 Dolphin Trading Primer for BMC

Dolphin Trading Primer for BMC

Cycles, Waves, Exits and useful trader Knowledge
Exit points
. You need to learn to identify resistance levels
. Things happen in waves
a. It's usually not just straight up then back down unless it's total illiquid shit
b. Try to stick to liquid exchanges (Trex and Polo)
c. Look for 3 pushes up - Sell a little on the 2nd and 3rd push
d. alternatively, Sell at max Euphoria

When you're setting progressive sells, how do you pick how much of your stack you're selling?

. Reduce your cost basis (especially if long term bullish)

a. Just sell from 15%-20%
b. You never want to sell your whole stack
c. Take profits and roll ‘em (it will compound)

Learn:
Elliot Waves
A lot of Crypto goes to the 4.236 fib extension when full bullish
Order Blocks
Wyckoff

The most important lesson is that profits don't stay on the table forever...

Regarding Liquidity
Say you have a coin...that market has a supply (sellers/ask) and a demand (buyers/bids).
Unlike what most peeps have, you need to position size correctly if you want to accumulate something. If you just pour 100 btc in one order
 you'll either buy all the sell orders or you'll have some pending 50 btc order that won't ever fulfill because there's NOT ENOUGH sell orders to
fill your original order. You cannot buy something that's not selling, so you need that liquidity. The fluctuation prices in accumulation periods

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are due to this, depending on the mktcap, volume, circulating supply a price will be easier/harder to move (If only 10 people have as much as 1
million between them then one sell might affect a lot more than if that same 1 million is being held by 100 people). This is also the way to
calculate your position sizes. Most people that want to accumulate do it in small batches during dips. This is also why there is interest in
FUDing a market to decrease price and accumulate for cheap. Now that's the logic in buying, imagine the same exact thing for selling... You
cannot cash out if there aren't enough people to buy your stuff, if you do it incorrectly you'll just eat all buy orders on the way down and drop the
price to peanuts (like what happened in the last ETH flash crash...looked like a dumbass wanted to cash out all at once and dropped the price
to the floor, making his profit a lot smaller). If you're following until now you'll understand why whales sell while it's green, so the liquidity of the
people buying can buy their rders without dropping the price. You buy the rumor when there's not as much liquidity and sell your position to the
news when most people will be eating them sell walls. "Buy the rumor, sell the news" is just a way to say "Sell when there's liquidity in the
market so you can actually exit a freaking position". This is also the reason you don't want to give targets to sell and this is also the reason many
whales will just jump into one of those big shill groups to dump when there's a clear signal…

WORD OF ADVICE: DON’T JUMP INTO ILLIQUID SHIT, YOU’LL BE DUMPED ON BY SOME FRAUD SHILLER

MARKET CYCLES
 

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Free TA Courses & Books

https://www.babypips.com/
https://stockcharts.com/

Recommended Books:
.  Technical Analysis by Murphy 
.  Trading Price Action by Al Brooks 
.  Technical Analysis of Stock Trends by Edwards and Magee 

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.  Bollinger Bands for Rational Analysis by John Bollinger 
.  Reminiscences of Stock Operator 
.  Encyclopaedia of Chart Patterns by Thomas Bulkowski 
.  Trend Following by Michael Covel 

Where to download any book you need:

http://gen.lib.rus.ec/

OG’s Twitter 

https://twitter.com/drei4u
https://twitter.com/thisisnuse
https://twitter.com/cryptorca
https://twitter.com/anambroid

Primer into cryptocurrency trading

http://alunacrypto.blogspot.ie/2016/03/bitcoin-altcoins-trading-complete-guide-cryptocurrency-tutorial-trading-strategy-fundamental-
analysis-technical-analysis.html

TA PRIMER

What kind of trading do you belong to?

Position Trading Long Term (Usually months, but Crypto is a VERY fast market so YMMV)
Chart using 1d,3d,1w Candles. When you’ve found and entry, switch to 4hr for a better entry.
Swing Trading Short Term (Days to Weeks)
Chart using 4hr, 1d candles.
Day Trading Short term - Day only - no overnight positions
Chart using 2hr/4hr candles. Many people will tell you to use 1hr or 30m but crypto gives too much noise in those tf imho.
Scalp Trading Very short term - Seconds to minutes - no overnight positions
Do as you like. Some people use 30m candles and I wouldn’t use anything below that (nor would I use 30m candles anyways, but there
are many scalpers)

You’ve got to remember that unlike other markets, CRYPTO NEVER SLEEPS, this market does not ever close. Do whatever you want and
whatever fits you. In markets as illiquid (as in.. NOT LIQUID) as Crypto, sc twoalping presents lots of risks, but to each their own. 

Horizontal Resistance/Support, Fibbonaci and Market Maker Psychology

http://theinnercircletrader.com/tutorials.htm

What indicator should I use? What setups are best?

There is no definite answer for this as there are as many trading setups as there are traders in the world, but a healthy combination of Trend
Analysis (Support and Resistances, Candlestick Analysis, Pivot Points and Ichimoku), Oscillators (Moving Average Convergence and
Divergence/MACD, Relative Strength Index/RSI, Stochastic RSI, Directional Movement Index/DMI) and an indicator for Volatility (Bollinger
Bands) will get you a long way.

RULE OF THUMB(a): Don’t use too many indicators as you’ll get mixed signals and a lot of noise. You will most likely make the decisions
you have to take a lot harder instead of easier. THE SIMPLER THE BETTER.

Here I bring you some commonly used Indicators and Setups which you might learn from. (REMEMBER THE RULE OF THUMB)

Moving Averages (Simple Moving Averages and Exponential Moving Averages)

Moving Averages help smooth out price action by filtering out the “noise” from random price fluctuations. A moving average (MA) is a trend-
following or lagging indicator because it is based on past prices. The two basic and commonly used MAs are the simple moving average
(SMA), which is the simple average of a security over a defined number of time periods, and the exponential moving average (EMA), which

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gives bigger weight to more recent prices (therefor making it the prefered method to use as it gives more importance to what’s currently
happening). 

The most common applications of MAs are to identify the trend direction and to determine support and resistance levels. While MAs are useful
enough on their own, they also form the basis for other indicators such as the Moving Average Convergence Divergence (MACD).

Golden Cross/Death Cross 

A crossover involving an asset/currency short-term moving average breaking above its long-term moving average. As long-term indicators
carry more weight, the golden cross indicates a bull market on the horizon and is reinforced by high trading volumes.

In stock markets people use EMA combinations such as 50/200 as a preferred method of using EMA Crossovers. 

EMA Strategies

EMAs can be used for a wide variety of things, and if you take a look at EMA strategies you’re going to find a lot of things.

Banksters and the Financial world use the Fibonacci based Moving Averages strategy a lot. It is very good for many timeframes due to
being fib-based. You’ll often find resistance/support at several values in this strategy. If you find one that consistently works on one market,
then keep using it.
Just as an example: https://www.youtube.com/watch?v=UacMCJxUY58

You can use many EMA values and there are tons of EMA strategies, more than trying every strategy on the world, find one that consistently
works for you and one that can be proofed by past movements. 

MACD + Stochastic RSI Setup

While there are tons of setups you can use, a very simple one that is very effective is the pairing of MACD and Stochastic RSI. You’ll get a
very good view on momentum on an asset/currency which might confirm a trend change.
the MACD is basically a way to measure short-term momentum compared to long-term momentum to help determine the future direction
of the asset by the use of Exponential Moving Averages. 
To make this a bit more clear, if the “faster”/”short term” Moving Average crosses the “slower”/”long term” Moving Average that tells you
that momentum is shifting upwards in the coming short term. Same thing applies the other way around. 
A signal of Buy/Sell is given by the MACD when there are crossovers  between both lines. 
Stochastic RSI (recommended levels either 80/20 or 70/30 or 75/25) will further help you see if an asset/currency is either oversold or
overbought.
A signal of both a MACD Crossover + Overbought/Oversold levels in the Stoch RSI is a VERY POWERFUL combination and a way to
confirm a change in trend.
As most things you can do chartwise, this combo works best the bigger the timeframe. Recommended 4hr (swing traders), 1d, 3d and
1W.

Trading Ichimoku

. Use this website for reference http://www.ichimokutrader.com/signals.html

. Both BTC and ETH tend to retrace to Kijun (Red line) when having relevant corrections (like the March May July September crash). Use the
Kijun Bounce to your advantage, sell to USD/USDT then rebuy at those levels.
i. Alternatively, open longs in BitMEX at Kijun levels. 
ii. Try only opening shorts/longs on liquid markets as BTC and ETH…anything other than those two and you’re at the mercy of your
Market Maker.
. Ichimoku with Bollinger Bands trading is a very successful combination, use it. 
. Ichimoku might seem crazy at first, but it is simply a combination of many indicators.
. Remember: Ichimoku, like any other indicator, is a reflection of the past which makes it a lagged indicator, always make your own analysis
and consider volume.

Candlestick Cheat Sheets

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Divergence Cheat Sheet

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Candlestick/Chart Patterns
http://thepatternsite.com/visualcpindex.html
http://thepatternsite.com/chartpatterns.html

http://thepatternsite.com/CandleVisual.html

THERE ARE MANY STRATEGIES, INDICATORS AND kANALYSIS YOU CAN USE FOR MANY THINGS,
JUST PLEASE REFER TO RULE OF THUMB. REMEMBER THE SIMPLER THE BETTER.

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FUNDAMENTAL ANALYSIS PRIMER

This section will receive a huge update if there’s interest in what’s being built in this document. For now I’ll just add some basic stuff as a primer.

Aspects to check on a coin:

Qualitative:

Innovation - What problem are they trying to solve? Does it really NEED a blockchain? What “real-world” alternatives are there to this service?
Does it stand a chance as an alternative to the “real world” alternative?

Team - Is the team totally transparent on regards to their identity (extremely important fact most people don’t even check)?Are the team well
rounded? Are they qualified to do their job? What’s their past experience? Do they have a record of ACTUALLY delivering products? Does it
have more advisors than team members?

Use Cases - What use cases do we have for this coin? Will it find a userbase? 

Barriers - What are the major barriers the coin/assets faces? Is it legally compliant in the country they’re based? Does it pass the Howley Test
 to qualify or not qualify as a security (if any crypto is considered a security it will have to abide by the laws set for securities in the country of
origin…things such as profit sharing make it a security, industries such as real state have a hard road ahead in crypto for instance for this same
reason)?

Community Support - This one is self explanatory.

Development - Do they have a GitHub where you can check their code? If so, how are they keeping up with development? A good team will
have development updates very frequently.

Roadmap - Is it Feasible? Historically how have they kept up with it? Is there any conflict of interest within the dates announced?

Quantitative:

Inflation - Self Explanatory as well. Some questions to ask - What deflation model does the coin adapt? (Not every crypto asset/currency needs
a deflationary model, but it is something to check)

Market Share - How much of the market does it represent? How much of it’s category does it represent (for instance anon coins)? 

Market Cap -  Mostly smoke and mirrors used to fool you around. The MktCap of a coin is (Total Supply)*(Price by coin/asset). This means that
unless you consider THE TOTAL SUPPLY there is available then this is just a vanity metric that news portals will use to create noise. 
Most new traders and new people in the scene see top MktCap coins and think of them as “cheaper bitcoin” to invest. As an example…
when people are telling you that XRP will reach a dollar… and the total supply is more than 33 billion…well you can guess. Same thing
with $MOON… like 300 billion total supply…do you really think it will achieve a dollar? 
Another interesting thing around this fact - Do you remember how BitcoinCash added about 30 billion dollars in MktCap out of thin air?
Remember how Forbes, Bloomberg and the like started publishing articles about total crypto mktcap? Now you know.

Rich List - You’re looking for fair distribution here. All coins/assets should have a block explorer and if it doesn’t, that’s a red flag. Within the
Rich list you can see who has most of the distribution of a coin. It is normal for exchanges to carry as much as 30%-50% supply of a coin to
provide liquidity for the market. Within a block explorer you can see the last activity a certain address executed and the time it was executed in,
so if you know that someone is carrying more than 40% of the distribution of a coin and the last activity was at a really low price you should
look out. Smart Investors would have accumulated and don’t necessarily want to dump it all on you, but this is important for those -more
illiquid- assets, especially the kind of shitcoin bullshit that gets shilled to death from Cryptopia/NovaExchange and the like (I’m not saying
these are bad exchanges, but this is how the cycles come and go…first we get your ETHs, LTCs, ETCs and the like, then you get new interesting
projects and at the end of the cycle you’ll get lots of shillers around bullshit coins in exchanges with ease of access such as the above)

ICO Price - If you’re interested in buying a coin you missed through an ICO, make sure you buy when the price has stabilized below ICO price.
When a coin goes below ICO price most weak hands would have been shaken out as they’d have either sold to rebuy cheaper, panic sold or
simply rage quitted crypto.

CLOSING STATEMENT 
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As of now this has been a fun experiment and a way to consolidate knowledge in favor of the BlueMagic Capital members. This is to be
considered a Primer into Technical Analysis, Fundamental Analysis and stuff you should now if you’re going into Crypto. If there’s interest in this
document or what we’re trying to build as a knowledge database there could be further updates, including useful tools and more insightful
knowledge and info regarding both TA and FA. Risk Management would be interesting to tackle next. 

Keep learning, keep earning…

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