Phase I

Level I: Introduction
Level II:
• How to open a position (Binance)
• Stop Loss and Take Profit and strategies
• Risk Management
• Mastering your emotions
Level III:
• HH HL LL
• Market Movement
• Support and Resistance
• Trendline
Level IV:
• Indicators: (RSI, Fibonacci Retracement, Moving Average)
• Patterns
• Wick up wick down (candle sticks)
• Market cap and circulation supply
• Live Trade (Scalp, Swing, Spot)
Introduction to trading and Crypto
currency
• Economical crisis
• Foundation of crypto currency
• Who is Satoshi Nakamoto
• Effects of currencies on crypto
• Blockchain
• Difference between coins, alt coins and meme coins and tokens
• Investment in coins
• How to achieve currencies
• Circulating supply market cap
Foundation of crypto currency
The first decentralized cryptocurrency was Bitcoin, which first released
as open-source software in 2009.
Who is Satoshi Nakamoto?
Satoshi Nakamoto is a nickname for the person or people who helped
developing the first bitcoin software and introduced the concept of
cryptocurrency to the world in a 2008 paper. Nakamoto remained active
in the creation of bitcoin and the blockchain until about 2010 but has
not been heard from since.
Difference between Forex and Cryptocurrency
• Forex:
- Market cap is above 200T$
- Investment: Stocks, Metals and Currency Pairs
- Transfer is restricted to currencies and stocks
- Big respect to the rules (chart, price action)
- High impact from news (NFP Non-farm payrolls, FOMC Federal Open Market Committee
meetings)
- Crypto:
- Market cap is estimated to 1.8T$
- Investment: Coins (BTC, ETH), Alt Coins (LTC, ETC …), Shit Coins (Shiba …), Tokens
(Columbus token, Scam …)
- Transfer is easier, safer and has no restrictions.
- Big respect to the rules (chart, price action) unless (Tweets, News, Whales, Market cap)
- High impact from news (NFP Non-farm payrolls, FOMC Federal Open Market Committee
meetings)
Effects of currencies on cryptocurrency
• Positive:
• Economical meetings (US dollar dxy)
• Gold
• Stocks
• Negative:
• Economical meetings (US dollar dxy)
• Stocks
• Membership
• Bankrupt
• Hacking
Blockchain
• A blockchain is a decentralized, distributed and public digital ledger
that is used to record transactions across many computers.
• It can be used as a log or archive for all the transactions made and it
also saves them in a secure device.
• Decentralized: Refers to the transfer of control and decision-making
from a centralized entity (individual, organization, or group thereof) to
a distributed network.
 Difference between coins, alt coins and shit
coins and tokens
• Coins (BTC, ETH), Alt Coins (LTC, ETC …), Meme Coins (Shiba
…), Tokens (Columbus token, Scam …)
• Good project 🡺 Token 🡺 Meme coin 🡺 can become an Alt coin 🡺
Coin
Coin (Bitcoin, Ethereum)
• Requirement from token to meme:
• Project Alt Coin (Xrp, Sol …)

• Max Supply Meme Coin (Shiba …)

• Market Cap
Token (SafeMoon)
• Sponsor
Ponzi (Columbus, PokeToken …)
 Investment in coins
• Project
• Circulating supply
• Total supply
• Market cap
• Partners
 How to achieve currencies
• Mining:
• Helium (bobcat, cotx …) 🡺 HNT
• Asics 🡺 LTC
• Rigs 🡺 ETH, Raven
• Buying usdt:
• Sponsor
• Credit Card
• PayPall
 Circulating supply market cap
• Circulating supply: Quantity of coins into a token or a coin
• Market cap: Circulating Supply x Price
Buttons on Binance

Practical
 Level II
• How to open a position (Binance)
• Stop Loss and Take Profit and strategies
• Risk Management
• Mastering your emotions
 Stop Loss and Take Profit and strategies
• Stop Loss: 5 to 10% of your position (must be taken when the position is
opened)
• Take Profit: Tp1 between 10% and 20%. We must close 25% of our
position and change the Stop Loss to our Entry Position
• Strategies:
• Hedge: Short and Long position
• DCA: Dollar Cost Averaging
• High Leverage Low Margin
• High Margin Low Leverage
• Order at Support or Resistance
• 10% of 100% with 10% SL of the 10%
 Risk Management
• 5 to 10 % of your wallet
• Leverage between 1x to 10x as max
• Stop Loss between 5 to 10 %
• Risk rise up when the leverage and the margin level goes up
• Risk rise down when the leverage and the margin level goes down
• Work on less coins
 Mastering your emotions

• Trust your analysis

• Remain calm and wait for your profit
• Rely on analysis and Confirmations not your emotions and
subcontience
• Always put your Stop Loss
• Work on Low Leverage
• Don’t spend to much time on your position
• Don’t overtrade or Revenge the market
 Level III
• HH HL LL
• Market Movement
• Support and Resistance
• Trendline
 Market Movement
• There are 2 types of market movement, Bullish and Bearish
• Bullish means that the market is currently Uptrend. In Bullish market,
trader will find the lowest price to buy and close at the higher price to
gain Profit.
• ⚠️Positions for Bullish market are BUY⚠️
• Bearish means that the market is currently Downtrend. In Bearish
market, trader will find the highest price to sell and close at the lowest
price to gain Profit.
• ⚠️Positions for Bearish market are SELL⚠️
 Trendline
• Two Types of TRENDS in the market:
• Bullish = Uptrend
• Bearish = Downtrend
Uptrend:
• Market going up and making a higher price than the previous.
• HH means Higher High, and HL means Higher Low.
• Range between HH and HL is called Retracement.

Downtrend:
• Market is going down and making lower price than the previous.
• LH means Lower High, while LL means Lower Low.
• Range between LL and LH is also called Retracement.
• If market is downtrend look for sell
• If market is uptrend look for buy

How to get profit from the market trend?

We can get profit by buying/selling in the market.
• Buy when the price is low
• Sell when the price is high
 Sell
Gain profit when price is downtrend.
Losing when price is uptrend

Buy
Gain profit when price is uptrend.
Losing when price is downtrend.
If market is Bullish/Uptrend, what should you do?
You need to find the lowest possible price to BUY and avoid trading
counter-trend
If market is Bearish/Downtrend, what should you do?
You need to find the lowest possible price to Sell and avoid trading
counter-trend
 Support and Resistance
• Support is level/zone that we look for Buy entry
• Resistance is level/zone where we look for Sell entry
• Support and Resistance are also influenced by two factors before we decide to go
for our entry
Support:
• Strong support
• Weak support
Resistance:
• Strong resistance
• Weak resistance

Support and resistance also could switch if there’s a breakout (BO)

• Support breakout = support becomes resistance (SBR)
SnR are basic concept in trading technical analysis.

Trader will look for buy at support area or nearest where it

could have potential to go uptrend.

Trader will look for sell at resistance area or nearest where it

could have potential to go downtrend.
To make it simple
- Buy at support
- Sell at resistance
How to know the SnR are strong or
weak?

• First. Multiple retest/rejection happened at SnR, that indicates the SnR

are strong because it shows that the price couldn’t make a breakout.
• Second, SnR must only be observed at bigger timeframes such as H4,
daily, weekly of monthly. It’s not recommended to look at smaller
timeframes like 1hour, 30 minutes or less because smaller timeframes
move much faster and there’s high probability of fakeout to occurs. So
we filter the noise by looking SnR at bigger timeframes only.
What are the functions for us to identify
strong SnR and weak SnR??🤔

Strong SnR are level/zone where the price is having a hard time to break
the area. Price need to make a couple of momentum before successfully
break the level. For weak SnR, rice break the level quite easily thus it
will increase the risk if we have an entry at this level.
Practical
What zone does the blue rectangle represent?
1- Support Zone.
2- Resistance Zone.
What zone does the blue rectangle represent?
1- Strong Resistance Zone
2- Strong Support Zone, multiple rejections
What zone does the blue rectangle represent?
1- Support Zone
2- Support become resistance
3- Resistance zone, price rejection 4 times
What zone does the blue rectangle represent?
1- Strong Support Zone
2- Strong Resistance Zone
What zone does the blue rectangle represent?
1- Strong Resistance Zone
2- Strong Support Zone
What zone does the blue rectangle represent?
1- Weak Resistance Zone
2- Strong Support Zone
3- Weak Support Zone
4- Strong Resistance Zone
What zone does the blue rectangle represent?
1- Support Zone
2- Resistance Zone, Breakout become support
What zone does the blue rectangle represent?
1- Strong Support zone, breakout become resistance
2- Strong Resistance zone, breakout become support
How to Analyze chart using SnR
• When we want to analyze the market, we always start from left first,
because candlestick and chart pattern of the left are previous data that have
some story to tell us.

• On the left, there we look for rejections to find strong SnR. When the price
on the right reaches the resistance zone, it breaks the strong resistance
area, thus it automatically can be considered as a resistance breakout.

• When the price breakout the resistance, the resistance zone will act as a
new support (resistance become support), so we wait for price to retrace
back to the new support to buy.

• And our confirmation will be after the new candle opens on the 4h
Timeframe
 Trendline 📊
Trendline is a line that we draw to identify the formation of a trend whether to
predict an Uptrend or a Downtrend.

How Trendline works?

📈Buy at Uptrend Trendline
📉Sell at Downtrend Trendline
-Major Trendline (Draw at bigger timeframes such as
4H, D, W & MN)
-Minor Trendline (Draw at smaller timeframes such as
1H, 30M, 15M, 5M & 1M)
-Trendline (Draw at bigger Timeframe to identify
bullish/bearish trend)
-Support Trendline (Any Timeframe)
-Resistance Trendline (Any Timeframe)
-Support becomes Resistance trendline (Any
Timeframe)
-Resistance becomes Support trendline (Any
Timeframe)
 How to draw a Trendline
There are two methods traders use to draw the trendline:
• From body to body
• From shadow to shadow
For Uptrend/Support Trendline:
• -Find three lower points that are uptrend and draw from all points.
For Downtrend/Resistance Trendline:
• -Find three lower points that are downtrend and draw from all points.
What are the most suitable Timeframes to draw a trendline?
• -Major Trendline: W1 – D1 – H4
• -Minor Trendline: H1 and Below
⚠️Lower timeframes are not suitable to draw a Trendline to indicate trends.⚠️
First, we mark the higher point as
Resistance Trendline.
After that, we find Support
Trendline.

To draw, you must find three

prices that are Uptrend for
Support Trendline & three prices
that are downtrend for Resistance
Trendline.

If the price move to the Support

Trendline, we’ll look for a Buy,
and if the price breakout to upper
Resistance Trendline, we can
focus on a BUY.
Examples of Support becomes
Resistance(SBR)
Examples of Resistance becomes Support(RBS)
Practical
What trendline this is?
1- Resistance Trendline
2- Support Trendline
What trendline this is?
1- Resistance Trendline Breakout
2- Support Trendline Breakout
3- Support Trendline
4- Resistance Trendline
What trendline this is?
1- Resistance Trendline
2- Support become Resistance Trendline
3- Resistance Trendline Breakout
4- Support Trendline
What trendline this is?
1- Resistance Trendline and Support Trendline
2- Resistance Trendline Breakout with Support Trendline
3- Support Trendline
4- Resistance Trendline
What trendline this is?
1- Support Trendline
2- Resistance Trendline
What trendline this is?
1- Support Trendline Breakout
2- Resistance Trendline Breakout
 The key in trading is a
“waiting game”
When the market goes sideways. We’ll wait for a breakout. Only then we can
decide to buy or sell.

If the price breakout above. We’ll find a buy because it’s going to go Uptrend.
If the price breakout below. We’ll find a sell because it’s going to go Downtrend.

So, we’ll wait for a breakout first, then we wait for the price to retest and only
then we enter the market
⚠️Breakout -> Retest -> Entry⚠️
 Level IV
• Indicators:
• RSI
• Fibonacci Retracement
• Moving Average
• Patterns
• Wick up wick down (candle sticks)
• Market cap and circulation supply
• Live Trade (Scalp, Swing, Spot)
Indicators:
• RSI
• Moving Average
• Fibonacci Retracement
 RSI
• What is RSI?
• How to use RSI?
• How to trade using RSI?
• Determine the Trend using RSI
• What is Divergence
• Kinds of divergence
• How to trade using Divergence
 What is RSI
• Relative Strength Index, or RSI helps traders evaluate the strength of
the current market.
• RSI identifies overbought and oversold conditions in the market.
• It is also scaled from 0 to 100.
 How to use RSI
• 30 or lower indicate oversold market conditions and an increase in
the possibility of price strengthening (going up).
• Oversold currency pair is an indication that the falling trend is likely
to reverse, which means it’s an opportunity to buy.
• 70 or higher indicate overbought conditions and an increase in
the possibility of price weakening (going down).
• Overbought currency pair is an indication that the rising trend is likely
to reverse, which means it’s an opportunity to sell.
 How to use RSI
• In addition the indicator also look for centerline crossovers.
• A movement from below the centerline (50) to above indicates a rising trend.
• A rising centerline crossover occurs when the RSI value crosses ABOVE the
50 line on the scale, moving towards the 70 line. This indicates the market
trend is increasing in strength, and is seen as a bullish signal until the RSI
approaches the 70 line.
• A movement from above the centerline (50) to below indicates a falling trend.
• A falling centerline crossover occurs when the RSI value crosses BELOW the
50 line on the scale, moving towards the 30 line. This indicates the market
trend is weakening in strength, and is seen as a bearish signal until the RSI
approaches the 30 line.
 How to trade using RSI

• We can use it to pick

potential tops and
bottoms depending
on whether the
market is overbought
or oversold.
 Determine the Trend using RSI
• If you think a trend is forming, take a quick look at the RSI and look at
whether it is above or below 50.
• If you are looking at a possible UPTREND, then make sure the RSI
is above 50.
• If you are looking at a possible DOWNTREND, then make sure the
RSI is below 50.
• To avoid fakeouts, we can wait for RSI to cross below 50 to confirm
our trend.
What is Divergence
 Kinds of divergence
• Regular Divergence:
• Bullish Divergence
• Bearish Divergence
• Hidden Divergence:
• Bullish Hidden Divergence
• Bearish Hidden Divergence
 Bullish Divergence
• If the price is making lower lows (LL), but the RSI is making
higher lows (HL), this is considered to be regular bullish divergence.
• This normally occurs at the end of a DOWNTREND.
• After establishing a second bottom, if the RSI fails to make a new low,
it is likely that the price will rise, as price and momentum are normally
expected to move in line with each other.
 Bearish Divergence
• If the price is making a higher high (HH), but the oscillator is lower
high (LH), then you have regular bearish divergence.
• This type of divergence can be found in an UPTREND.
• After price makes that second high, if the oscillator makes a lower
high, then you can probably expect the price to reverse and drop.
 Hidden Bullish Divergence
• This can be seen when the pair is in an UPTREND.
• Once price makes a higher low (HL), look and see if the oscillator
does the same.
• If it doesn’t and makes a lower low (LL), then we’ve got some
hidden divergence in our hands.
 Hidden Bearish Divergence
• This occurs when price makes a lower high (LH), but the RSI is
making a higher high (HH).
• By now you’ve probably guessed that this occurs in a DOWNTREND.
• When you see hidden bearish divergence, chances are that the pair will
continue to shoot lower and continue the downtrend.
 Recap
• Regular divergences = signal possible trend reversal
• Hidden divergences = signal possible trend continuation
 How to trade Regular Divergence
• We can see from the falling trend line has been in a downtrend.
• However, there are signs that the downtrend will be coming to an end.
• While the price has registered lower lows, the RSI is showing a higher
low.
• If we have SnR near the divergence, it’s preferred to take the trade
after them!
 How to Trade a Hidden Divergence
• Here we see that the pair has been in a downtrend.
• Notice how price has formed a lower high but the stochastic is printing
higher highs.
• According to our notes, this is a hidden bearish divergence!
• What should we do? Time to get back in the trend?
• Well, if you are not sure, you can sit back and watch on the sidelines
first.
• If we have SnR near the divergence, it’s preferred to take the trade
after them!
 Moving Average
• What Are Moving Averages?
• Simple Moving Average (SMA)
• Exponential Moving Average (EMA)
• Simple vs. Exponential Moving Averages
• How to Use Moving Averages to Find the Trend
• How to Use Moving Average Crossovers to Enter Trades
• How to Use Moving Averages as Dynamic Support and Resistance
Levels
 What Are Moving Averages?
• A moving average is simply a way to smooth out price fluctuations to
help you distinguish between typical market “noise” and the
actual trend direction.
• By “moving average”, we mean that you are taking the average
closing price of a currency pair for the last ‘X’ number of periods.
 Simple Moving Average (SMA)
• A simple moving average (SMA) is the simplest type of moving
average.
• Calculating the Simple Moving Average (SMA)
• If you plotted a 5 period simple moving average on a 1-hour chart, you would
add up the closing prices for the last 5 hours, and then divide that number by
5.
• Instead of just looking at the current price of the market, the moving
averages give us a broader view, and we can now gauge the general
direction of its future price
Notice how the 62 SMA is farther away from the current price than the 30 and 5 SMAs.
This is because the 62 SMA adds up the closing prices of the last 62 periods and divides it by 62.
The longer period you use for the SMA, the slower it is to react to the price movement.
Exponential Moving Average (EMA)
• An Exponential moving average (EMA) is the exponential type of
moving average.
• Calculating the Exponential Moving Average (EMA)
• If you plotted a 5 period simple moving average on a 1-hour chart, you would
add up the closing prices for the last 5 hours, multiplied by e and then divide
that number by 5.
• Instead of just looking at the current price of the market, the moving
averages give us a broader view, and we can now gauge the general
direction of its future price
• Notice how the red line (the 30 EMA) seems to be a closer price than the blue line (the 30 SMA).
• This means that it more accurately represents recent price action. You can probably guess why this happens.
• It’s because the exponential moving average places more emphasis on what has been happening lately.
• When trading, it is far more important to see what traders are doing NOW rather than what they were doing last week
or last month.
 Simple vs. Exponential Moving Averages
• Exponential moving average.
• When you want a moving average that will respond to the price action rather quickly, then a
short period EMA is the best way to go.
• These can help you catch trends very early (more on this later), which will result in higher
profit. In fact, the earlier you catch a trend, the longer you can ride it and rake in those
profits
• Simple moving average.
• When you want a moving average that is smoother and slower to respond to price action,
then a longer period SMA is the best way to go.
• This would work well when looking at longer time frames, as it could give you an idea of the
overall trend.
• Although it is slow to respond to the price action, it could possibly save you from many fake
outs.
 SMA EMA

Displays a smooth Quick Moving and is

PROS chart that eliminates good at showing
most fakeouts. recent price swings.

Slow-moving, which
More prone to cause
may cause a lag in
CONS fakeouts and give
buying and selling
errant signals.
signals
 When to Use SMA vs. EMA
• With moving averages in general, the longer the time period,
the slower it is to react to price movement.
• But with all else being equal, an EMA will track price more closely
than an SMA.
• As a conclusion, we can use EMA for short time period or length and
SMA for long time period or length.
• We use 3 MA (1st EMA with length 9, 2nd EMA with length 50 and the
3rd SMA with length 200)
 How to Use Moving Averages to Find the
Trend
• One sweet way to use moving averages is to help you determine the
trend.
• When price action tends to stay above the moving average, it signals
that price is in a general UPTREND.
• If price action tends to stay below the moving average, then it
indicates that it is in a DOWNTREND.
• On 4h TF and above, if the market is above the SMA so the market is
uptrend and if bellow so the market is downtrend
• On 1h TF and bellow, 9 EMA is used as a trendline
 How to Use Moving Average Crossovers to
Enter Trades
• When we have a positive cross between the 50 EMA and the 200 SMA
so we have a reversal
• Getting into details:
• Golden Cross: 50 EMA bellow 200 SMA and having a cross 🡺 Uptrend
• Death Cross: 50 EMA above 200 SMA and having a cross 🡺 Downtrend
• Cross between 9 EMA and 50 EMA is a reversal of the market
 How to Use Moving Averages as Dynamic
Support and Resistance Levels
• Another way to use moving averages is to use them as dynamic
support and resistance levels.
• We like to call it dynamic because it’s not like your traditional
horizontal support and resistance lines. They are constantly
changing depending on recent price action.
• There are many traders who look at these moving averages as key
support or resistance. These traders will buy when the price dips and
tests the moving average or sell if the price rises and touches the
moving average.
• One thing you should keep in mind is that these are just like your normal support and resistance lines.
• This means that price won’t always bounce perfectly from the moving average. Sometimes it will go
past it a little bit before heading back in the direction of the trend.
• There are also times when the price will blast past it altogether. What some traders do is that they pop on two moving
averages, and only buy or sell once the price is in the middle of the space between the two moving averages.
• You could call this area “the zone.”

• The price went slightly past the 10 EMA a few pips but proceeded to drop afterward.
• Just like your horizontal support and resistance areas, MA should be treated like zones or areas of interest.
 Breaking through Dynamic Support and
Resistance
• Now you know that moving averages can potentially act as support
and resistance. Combining a couple of them, you can have yourself a
nice little zone.
• In the chart bellow, we see that the 50 EMA held as a strong resistance
level for a while as the market repeatedly bounced off it.
• The red box, the price finally broke through and shot up.
• Price then retraced and tested the 50 EMA again, which proved to be a strong support level.
 Fibonacci Retracement
• Fibonacci Trading
• How to Use Fibonacci Retracements
• Finding Fibonacci Retracement Levels
• Uptrend
• Downtrend
• How to Use Fibonacci Retracement with Support and Resistance
• How to Use Fibonacci Retracement with Trend Lines
• How to Use Fibonacci Retracement with Japanese Candlesticks
• How to Use Fibonacci Extensions to Know When to Take Profit
• How to Use Fibonacci to Place Your Stop so You Lose Less Money
 Fibonacci Trading
• Fibonacci Retracement Levels: 0.236, 0.382, 0.52, 0.618, 0.764
• Fibonacci Retracement levels work on the theory that after a big price moves in one
direction, the price will retrace back to a previous price level before resuming in
the original direction.
• Traders use the Fibonacci retracement levels as potential support and resistance
areas.
• Fibonacci Extension Levels: 0, 0.382, 0.618, 1.000, 1.382, 1.618
• Traders use the Fibonacci extension levels as profit-taking levels.
• In order to apply Fibonacci levels to your charts, you’ll need to identify Swing
High and Swing Low points.
• A Swing High is a candlestick with at least two lower highs on both the left and right of
itself.
• A Swing Low is a candlestick with at least two higher lows on both the left and right of itself.
 How to Use Fibonacci Retracements
• Fibonacci retracement levels are horizontal lines that indicate the
possible support and resistance levels where price could potentially
reverse direction.
• The first thing you should know about the Fibonacci tool is that it
works best when the market is trending.
• Fibonacci retracement levels are considered a predictive technical
indicator since they attempt to identify where price may be in the
future.
 Finding Fibonacci Retracement Levels
• To find Fibonacci retracement levels, you have to find the recent
significant Swing Highs and Swings Lows.
• For downtrends, click on the Swing High and drag the cursor to the
most recent Swing Low.
• For uptrends, do the opposite. Click on the Swing Low and drag the
cursor to the most recent Swing High.
 Uptrend
Here we plotted the
Fibonacci retracement
levels by clicking on the
Swing Low and dragging
the cursor to the Swing 0.236

High.
0.382

0.500

The Fibonacci retracement 0.615

levels were .7955 0.764

(23.6%), .7764
(38.2%), .7609
(50.0%*), .7454 (61.8%), 1.000

and .7263 (76.4%).

0.236

0.382

0.500

0.615

0.764

1.000
 Downtrend
we found our
Swing High at The retracement
1.4195 and our levels are 1.3933
Swing Low at (23.6%), 1.3983
1.3854. (38.2%), 1.4023
(50.0%), 1.4064
(61.8%) and
1.4114 (76.4%).
 How to Use Fibonacci Retracement with
Support and Resistance

• Fibonacci retracement tool is extremely useful, it shouldn’t be used

all by its lonesome self.
• The Fibonacci retracement tool should be used in combination with
other tools.
 How to Use Fibonacci Retracement with
Support and Resistance
• Fibonacci retracement tool is to spot potential support and resistance
levels and see if they line up with Fibonacci retracement levels.
• If Fibonacci levels are already support and resistance levels, and you
combine them with other price areas, then the chances of price
bouncing from those areas are much higher.
As you can see, it’s been on an uptrend recently. Look at all those green candles!
But the question is, “When do you enter?”
We see that the 1.0510 price was good resistance level in the past
and it just happens to line up with the 50.0% Fibonacci
retracement level.
 How to Use Fibonacci Retracement with
Trend Lines
• Fibonacci retracement levels work best when the market is trending,
so this makes a lot of sense!
• Remember that whenever a pair is in a downtrend or uptrend, traders
use Fibonacci retracement levels as a way to get in on the trend.
We Should take a buy?
Here we plotted the Fibonacci retracement levels by using the Swing low at 82.61 and the Swing High at 83.84.
Notice how the 50.0% and 61.8% Fib levels are intersected by the rising trend line.
Could these levels serve as potential support levels?
• The 61.8% Fibonacci retracement level held, as price bounced
there before heading back up. If you had set some orders at that
level, you would have had a perfect entry!
• A couple of hours after touching the trend line, price zoomed
• The combination of both a diagonal and a horizontal
support or resistance level could mean that other traders are
eying those levels as well.
 How to Use Fibonacci Retracement with
Japanese Candlesticks
• You can combine the Fibonacci retracement tool with
support and resistance levels, and trend lines to create a simple but
super awesome trading strategy.
• When combining the Fibonacci retracement tool with candlestick
patterns, we are actually looking for exhaustive candlesticks.
The coin seems to have been in a downtrend the past week, but the move seems to have paused for a bit.
While the 50.0% Fib level held for a bit, buyers eventually took the pair
higher. You decide to wait and see whether the 61.8% Fib level holds.
A long-legged doji has formed right smack on the 61.8% Fibonacci retracement level.
• If you had shorted right after that doji had formed, you could have made some serious profits.
• Right after the doji, the price stalled for a bit before heading straight down. Take a look at all those
red candles!
• Eventually, the price went all the way back down to the Swing Low.
 How to Use Fibonacci Extensions to Know
When to Take Profit
• In an uptrend, the general idea is to take profits on a long trade at a
Fibonacci Price Extension Level.
• You determine the Fibonacci extension levels by using three mouse
clicks.
• First, click on a significant Swing Low, then drag your cursor and
click on the most recent Swing High. Finally, drag your cursor back
down and click on any of the retracement levels.
The 50.0% Fib level held strongly as support and, after three tests, the pair finally
resumed its uptrend. In the chart above, you can even see the price rise above the
previous Swing High.
•Price rallied all the way to the 61.8% level, which lined up closely with the previous Swing High.
•It fell back to the 38.2% level, where it found support
•Price then rallied and found resistance at the 100% level.
•A couple of days later, the price rallied yet again before finding resistance at the 161.8% level.
•The 61.8%, 100%, and 161.8% levels all would have been good places to take off some profits.
• In a downtrend, the general idea is to take profits on a short trade at a Fibonacci extension level
since the market often finds support at these levels.
• Here, we saw a doji form just under the 61.8% Fib level. Price then reversed as sellers jumped
back in, and brought price all the way back down to the Swing Low.
Here’s what happened after the price reversed from the Fibonacci retracement level:
•Price found support at the 38.2% level
•The 50.0% level held as initial support, then became an area of interest
•The 61.8% level also became an area of interest, before price shot down to test the previous Swing Low
•If you look ahead, you’ll find out that the 100% extension level also acted as support
•We could have taken off profits at the 38.2%, 50.0%, or 61.8% levels. All these levels acted as support, possibly because other
traders were keeping an eye out for these levels for profit-taking as well.
• There are some problems to deal with here.
• First, there is no way to know which exact Fibonacci extension
level will provide resistance.
• ANY of these levels may or may not act as support or resistance.
• Another problem is determining which Swing Low to start from in
creating the Fibonacci extension levels.
 How to Use Fibonacci to Place Your Stop so
You Lose Less Money
• Probably just as important as knowing where to enter or take off
profits is knowing where to place your stop loss.
• Method #1: Place Stop Just Past Next Fib
• Method #2: Place Stop Past Recent Swing High/Low
 Method #1: Place Stop Just Past Next Fib
• The first method is to set your stop just past the next Fibonacci
level.
• If you were planning to enter at the 38.2% Fib level, then you would
place your stop beyond the 50.0% level.
• If you felt like the 50.0% level would hold, then you’d put your stop
past the 61.8% level and so on and so forth.
• If you had shorted at the 50.0%, you could have placed your stop
loss order just past the 61.8% Fib level.
• The problem with this method of setting stops is that it is entirely
dependent on you having a perfect entry.
• Setting a stop assumes that you are really confident that the
support or resistance area.
• It might be best if you used this type of stop placement method for
short-term, intraday trades
 Method #2: Place Stop Past Recent Swing
High/Low
• Now, if you want to be a little safer, another way to set your stops
would be to place them past the recent Swing High or Swing Low.
• For example, when the price is an uptrend and you’re in a long
position, you can place a stop loss just below the latest Swing
Low which acts as a potential support level.
• This type of stop loss placement would give your trade more room to
breathe and give you a better chance for the market to move in favor
of your trade
• Setting larger stop losses would probably be best used for
longer-term, swing-type trades, and you can also incorporate
this into a “scaling in” method, which you will learn later on
in this course.
• Of course, with a larger stop, you also have to remember to
adjust your position size accordingly.
 So which way is better?
• It depends on your Risk Management and if you are trading in a mid-
term trade or a long-term
• If you are trading in a mid-term, the best method is the level before the
retest
• If you are trading a swing trade, the best method is the swing low or
high
 Summary: Fibonacci Trading
• The key Fibonacci retracement levels to keep an eye on are: 23.6%, 38.2%,
50.0%, 61.8%, and 76.4%.
• The levels that seem to hold the most weight are the 38.2%, 50.0%, and 61.8%
levels, which are normally set as the default settings.
• Fibonacci retracement levels as potential support and resistance areas.
• Similar to the retracement levels, the key Fibonacci extension levels are: 38.2%,
50.0%, 61.8%, as well as the 100%, 138.2% and 161.8% extensions.
• Traders use the Fibonacci extension levels as potential support and resistance
areas to set profit targets.
• A Swing High is a candlestick with at least two lower highs on both the left and
right of itself.
• A Swing Low is a candlestick with at least two higher lows on both the left and
right of itself.
 Patterns
• Head and shoulders
• Double top
• Double bottom
• Rounding bottom
• Cup and handle
• Wedges
• Pennant or flags
• Ascending triangle
• Descending triangle
• Symmetrical triangle
 Head and shoulders
• Head and shoulders is a chart pattern in which a large peak has a
slightly smaller peak on either side of it. Traders look at head and
shoulders patterns to predict a bullish-to-bearish reversal.

• Typically, the first and third peak will be smaller than the second, but
they will all fall back to the same level of support, otherwise known as
the ‘neckline’. Once the third peak has fallen back to the level of
support, it is likely that it will breakout into a bearish downtrend.
 Double top
A double top is another pattern that traders use to highlight trend
reversals. Typically, an asset’s price will experience a peak, before
retracing back to a level of support. It will then climb up once more
before reversing back more permanently against the prevailing trend.
 Double bottom
• A double bottom chart pattern indicates a period of selling, causing an
asset’s price to drop below a level of support. It will then rise to a level
of resistance, before dropping again. Finally, the trend will reverse and
begin an upward motion as the market becomes more bullish.

• A double bottom is a bullish reversal pattern, because it signifies the

end of a downtrend and a shift towards an uptrend.
 Rounding bottom
• A rounding bottom chart pattern can signify a continuation or a
reversal. For instance, during an uptrend an asset’s price may fall back
slightly before rising once more. This would be a bullish continuation.

• An example of a bullish reversal rounding bottom – shown below –

would be if an asset’s price was in a downward trend and a rounding
bottom formed before the trend reversed and entered a bullish uptrend.
 Cup and handle
• The cup and handle pattern is a bullish continuation pattern that is used
to show a period of bearish market sentiment before the overall trend
finally continues in a bullish motion. The cup appears similar to a
rounding bottom chart pattern, and the handle is similar to a wedge
pattern – which is explained in the next section.

• Following the rounding bottom, the price of an asset will likely enter a
temporary retracement, which is known as the handle because this
retracement is confined to two parallel lines on the price graph. The
asset will eventually reverse out of the handle and continue with the
overall bullish trend.
 Wedges
Wedges form as an asset’s price movements tighten between two
sloping trend lines. There are two types of wedge: rising and falling.

A rising wedge is represented by a trend line caught between two

upwardly lines of support and resistance. In this case the line of support
has a smaller angle than the resistance line. This pattern generally
signals that an asset’s price will eventually decline more permanently –
which is demonstrated when it breaks through the support level.
Rising Wedge
Falling Wedge
 Pennant or flags
• Pennant patterns, or flags, are created after a period of upward
movement, followed by a consolidation. Generally, there will be a
significant increase during the early stages of the trend, before it enters
into a series of smaller upward and downward movements.
• Pennants can be either bullish or bearish, and they can represent a
continuation or a reversal. The below chart is an example of a bullish
continuation. In this respect, pennants can be a form of double pattern
because they show either continuations or reversals.
• Pennant seem similar to a wedge pattern or a triangle pattern, it is
important to note that wedges differ from pennants because a wedge is
always ascending or descending, while a pennant is always horizontal.
 Ascending triangle
• The ascending triangle is a bullish continuation pattern which signifies
the continuation of an uptrend. Ascending triangles can be drawn onto
charts by placing a horizontal line along the resistance and then
drawing an ascending trend line along the support.
• Ascending triangles often have two or more identical peak highs
which allow for the horizontal line to be drawn. The trend line
signifies the overall uptrend of the pattern, while the horizontal line
indicates the historic level of resistance for that particular asset.
 Descending triangle
• In contrast, a descending triangle signifies a bearish continuation of a
downtrend. Typically, a trader will enter a short position during a
descending triangle.
• Descending triangles generally shift lower and break through the
support because they are indicative of a market dominated by sellers,
meaning that successively lower peaks are likely to be prevalent and
unlikely to reverse.
• Descending triangles can be identified from a horizontal line of
support and a downward line of resistance. Eventually, the trend will
break through the support and the downtrend will continue.
 Symmetrical triangle
• The symmetrical triangle pattern can be either bullish or bearish,
depending on the market. In either case, it is normally a continuation
pattern, which means the market will usually continue in the same
direction as the overall trend once the pattern has formed.
• Symmetrical triangles form when the price converges with a series of
lower peaks and higher troughs. In the example below, the overall
trend is bearish, but the symmetrical triangle shows us that there has
been a brief period of upward reversals.
Wick up wick down (candle sticks)
• Five bullish candlestick patterns:
• Hammer
• Inverse hammer
• Bullish engulfing
• Morning star
• Three white soldiers
• Five bearish candlestick patterns:
• Hanging man
• Shooting star
• Bearish engulfing
• Evening star
• Three black crows
 Hammer

• The hammer candlestick pattern is formed of a short body with a long

lower wick, and is found at the bottom of a downward trend.

• A hammer shows that although there were selling pressures during the
day, ultimately a strong buying pressure drove the price back up. The
color of the body can vary, but green hammers indicate a stronger bull
market than red hammers.
 Inverse hammer
• A similarly bullish pattern is the inverted hammer. The only difference
being that the upper wick is long, while the lower wick is short.

• It indicates a buying pressure, followed by a selling pressure that was

not strong enough to drive the market price down. The inverse
hammer suggests that buyers will soon have control of the market.
 Bullish engulfing
• The bullish engulfing pattern is formed of two candlesticks. The first
candle is a short red body that is completely engulfed by a larger green
candle.

• Though the second day opens lower than the first, the bullish market
pushes the price up, culminating in an obvious win for buyers.
 Morning star
• The morning star candlestick pattern is considered a sign of hope in a
bleak market downtrend. It is a three-stick pattern: one short-bodied
candle between a long red and a long green. Traditionally, the ‘star’
will have no overlap with the longer bodies, as the market gaps both
on open and close.

• It signals that the selling pressure of the first day is subsiding, and a
bull market is on the horizon.
 Three white soldiers
• The three white soldiers pattern occurs over three days. It consists of
consecutive long green (or white) candles with small wicks, which
open and close progressively higher than the previous day.

• It is a very strong bullish signal that occurs after a downtrend, and

shows a steady advance of buying pressure.
 Hanging man
• The hanging man is the bearish equivalent of a hammer; it has the
same shape but forms at the end of an uptrend.

• It indicates that there was a significant sell-off during the day, but that
buyers were able to push the price up again. The large sell-off is often
seen as an indication that the bulls are losing control of the market.
 Shooting star
• The shooting star is the same shape as the inverted hammer, but is
formed in an uptrend: it has a small lower body, and a long upper
wick.

• Usually, the market will gap slightly higher on opening and rally to an
intra-day high before closing at a price just above the open – like a star
falling to the ground.
 Bearish engulfing
• A bearish engulfing pattern occurs at the end of an uptrend. The first
candle has a small green body that is engulfed by a subsequent long
red candle.

• It signifies a peak or slowdown of price movement, and is a sign of an

impending market downturn. The lower the second candle goes, the
more significant the trend is likely to be.
 Evening star
• The evening star is a three-candlestick pattern that is the equivalent of
the bullish morning star. It is formed of a short candle sandwiched
between a long green candle and a large red candlestick.

• It indicates the reversal of an uptrend, and is particularly strong when

the third candlestick erases the gains of the first candle.
 Three black crows
• The three black crows candlestick pattern comprises of three
consecutive long red candles with short or non-existent wicks. Each
session opens at a similar price to the previous day, but selling
pressures push the price lower and lower with each close.

• Traders interpret this pattern as the start of a bearish downtrend, as the

sellers have overtaken the buyers during three successive trading days.