Remember this? I bet the first time you saw it in December you laughed this picture off, but it's okay so did I. And if this is the first time you're seeing this, don't dismiss it just yet!

Because, well, the harsh truth is that its all real. And this market cycle, believe it or not, is present in every market out there, including these Bitcoin & Altcoin markets.

All markets work the same way. Can you see it? @QTMHoldings #QTM #wallstcheatsheet pic.twitter.com/BXEUlu1NfQ
— Alvin Lee (@onemanatatime) April 17, 2014

If you haven't already, check out my previous posts earlier this year about trading Bitcoins and Altcoins, which highlight technical analysis basics, fundamental analysis frameworks, margin trading, and tips on developing a cryptocurrency trading strategy and TA. Here, I just want to point out the importance of understanding market structure, introduce you to market manipulation, and show you how technical analysis can be applied to your cryptocurrency trading.

As you read on, keep these following points in mind as these rules apply even more closely:

• What goes up must come down
• Buy on rumors, sell on news
• All markets are linked to everything else

To take this one step further and understand the markets from an even wider perspective, the next thing to do is to put on your market manipulator hat. Check out these 2 really good resources covering this topic for a deeper understanding of what I'm trying to get at:

• Wolong's Game of Deception PDF: http://cryptofrenzy.files.wordpress.com/2014/02/god.pdf
• Pumps, Dumps, and Manipulated Markets: http://altcoinnewsletter.com/pumps-dumps-and-manipulated-markets/

The whole point of learning about how market manipulators operate is not to actually manipulate the markets yourself or conduct pump and dumps, but to actually spot when others are trying to do so. This can help your trading strategy in various ways such as to:

• Have a better understanding of the ebbs and flows of the market
• Avoid getting caught in their squeezes
• Identify a suspicious (potentially profitable) market
• Know what the "smartest man in the room" is doing, and follow the "smart money"

From Wolong's ebook, he broke down the market cycle into 7 stages, namely:
If you compare the psychology chart above and the Pump & Dump cycle pointed out by Wolong, to the market structure chart below, you can see how they have very similar structures even though they use different terms to explain the phases.

Buy low sell high; easier said than done. Familiarize yourself with market structure. @QTMHoldings #QTM pic.twitter.com/DlOJ4yF6fE
— Alvin Lee (@onemanatatime) April 18, 2014

And from this market structure chart, you can see that the stages can be further simplified to 4 phases:

1. Accumulation
2. Markup (Pump)
3. Distribution
4. Decline (Dump)

So why is this important, or how does it apply to the cryptocurrency markets? By understanding the market cycle chart, you will be able to better pick altcoins by spotting accumulation zones to join the breakout and profit, and to make your exit when you reach distribution zones. For example:

Hope you managed to get some #MYR at that 350-400 floor I mentioned #crystalball #QTM pic.twitter.com/W6NOjRFiBk
— Alvin Lee (@onemanatatime) May 2, 2014

Although many people disregard the profitability (or possibility) of using technical analysis to trade the Bitcoin and especially Altcoins markets, it is most definitely possible. I think the problem lies predominantly in the limitation that some of you have put on the term 'technical analysis'.

If Technical Analysis to you means chart patterns, candles, and indicators; you're missing the big picture. #QTM
— Alvin Lee (@onemanatatime) April 23, 2014

Every piece of information on that chart you use is part of technical analysis; but the bigger question is how to make sense of it all. To better understand TA, we should think of the price charts as simply a graph of human behaviour.

Although the tools to do so efficiently are sorely lacking at this point in time, here's just a few examples of TA used on Altcoins and Bitcoin.

Fundamental Analysis
I believe that for an Altcoin to be worth anything at all, it MUST first have technical aspects which are built with the future in mind. This is what solely determines if a cryptocurrency has the potential for the mid to long term. Even with 5 new altcoins launching everyday, you barely see 1 a month that can last even the mid-term.

Then, after that I judge the coins based on 7 mediating factors; developers, community, branding/marketing, popularity/virality, novelty, infrastructure, and liquidity. For more about fundamental analysis and an explanation of these factors, read up on the first few sections in my previous post about picking and trading the next profitable altcoin. In this post, I will focus more on technical analysis and trading strategies instead.

With so many coins out there, I like to use these above factors to weed out all the weaker shitcoins, and focus on altcoins which are substantially different from others, and more importantly, provide more value than other cryptocurrencies. After which, I use Technical Analysis to judge entry/exit positions for trading them.

What else do you think makes a cryptocurrency fundamentally better than another, and more sustainable as a currency?

#FoodForThought: What makes a cryptocurrency better than another? What purpose does Money serve? #Bitcoin #Altcoins pic.twitter.com/kdv5i072UM
— Alvin Lee (@onemanatatime) March 10, 2014

Technical Analysis

Many will probably agree when I say that the Altcoins market is akin to the "penny stocks" of cryptocurrencies. In this sense, most altcoin markets have much lower liquidity, but have much higher volatility. Since there are over 200 different cryptocurrency markets to date, I prefer to narrow down my list of altcoins to a small handful, and buy under-valued coins or trade the breakouts. You're going to find it really tough to be watching more than 5 altcoins at the same time, so I highly suggest keeping your list small, and adapt your watchlist to the fast changing markets.

If you're new to technical analysis, here's a really good beginner's video on daytrading Penny Stocks, which also explains the basics of chart reading and an introduction to basic trading jargon that I'll be using throughout this post. The important concepts to take note of are resistances & supports, breakouts that coincide with high volume, and the general idea that "what goes up must come down".


So after you get the basics sorted out, you should be ready to learn how to trade! I'm gonna break this intermediate technical analysis tutorial down into five main portions, and have compiled videos from other trading experts to give even beginners a better overall idea, and teach you all you need to know to devise your own Bitcoin & Altcoins trading strategy.

Use these basic resistance & support levels to judge entry/exit prices. In general, previous high and low points are new resistances or support depending on where the price is, and points where u can see big breakouts will be the new short term resistance/support. To get a better idea of what I mean, watch these videos by Jason Stapleton who explains top down analysis, resistances & supports, and structure.




Here's another video which points out some keys to being a successful trader; namely to learn the set-ups, and to learn risk-management. Watch it here: "3 Keys to Day Trading Success: http://www.youtube.com/watch?v=TzsVTvA9DoE".

2. Retracements

The concept of retracements is, in my opinion, the most important one that any trading enthusiast must grasp in order to understand how the markets flow. In essence, a retracement is a temporary price movement against the established trend, and helps us understand that the markets move in wave patterns as highlighted by the Elliott Wave Theory. One way to look at it, as highlighted by this video below, is that most price-actions follow a pullback rule to fibonacci retracement levels (38%, 50%, 62%).


The most important concept to take away from this is "what goes up must come down"; that price movements in one direction are always followed by retracements in the opposite direction. Of course, not all movements will follow the same pullbacks, and these levels should only be used as a guide. Here's another video: "Understanding Fibonacci retracement lines: https://www.youtube.com/watch?v=KzHjxPxGzMw".

So the question then is, how will we know if this counter-movement price action is a retracement or a reversal? There is no way to say for certain, but there are several patterns that have a high probability in indicating a reversal; such as double tops/bottoms & head-and-shoulder patterns, and large selling volume after periods of bounded movement. Keep in mind that trading is a game of probability, consistency, risk-management and profitability over the long-term; not about making the right trade every single time.

3. Trading on Volume

Another important concept you need to understand is that large price movements almost always coincide with high trading volume. Take the recent spike in Bitcoin price on 3rd March 2014 for example:

Bitcoin price spike coincides with high trading volume: 3rd March 2014. (Bitcoinwisdom.com)

With this in mind, this is where the liquidity of an altcoin also comes into play; the higher the trade volume of an altcoin, the lower the spreads, and the more likely you will be able to make some profitable trades from it. In general, the trade volume is a good indicator of, and is proportional to the popularity of the altcoin at the current time.

Apart from the actual trading volume itself, another good indicator is the change in volume over time; if you realize that the trading volume of an altcoin has been steadily increasing over the last few days, it could be an indication that a big price movement is coming up. "24 Hour Volume" data is usually shown on the exchanges, such as MintPal or Cryptsy, while another good website to use is Cryptocoinchart's Market Comparison Chart, Coinmarketcap, and Crypto Coins Table.

Do also check out these 2 videos about trading on volume, that I'm sure will be useful for your altcoins and bitcoins daytrading:

1. Trading Volume Indicator on Your Day Trading and Swing Trading Charts: http://www.youtube.com/watch?v=byrjmP7DQJc
2. How to Analyze Stocks Trading on Volume: http://www.youtube.com/watch?v=lzfo-mh1Zv0

The last concept I want to share is breakout patterns. Although most people are familiar with this concept, many do not know how to profit from them. This is one of the best tools to use for planning your entry positions, while there are various ways to do so, which are highlighted by these first two videos below:



On hindsight, these breakout patterns always look like the perfect indicator for entry positions. But how do we really pull it off? How can we enter positions pre-formation of a chart pattern? Watch these videos to further refine your entry & exits on your altcoin trades.

1. Do You Trade Breakouts ? Trade Chart Patterns Simple Indicators: https://www.youtube.com/watch?v=XyR-m8aUY3I
1. Breakouts on Triangle patterns:
1. Ascending triangle - Trade long
2. Descending triangle - Trade short
3. Symmetrical triangle - Prior to forming triangle: only take long trades on the way up, and short on the way down
2. High Profit Trades found with Candlestick Breakout Patterns" - Stephen Bigalow http://www.youtube.com/watch?v=1fB3EF7XeXU

5. Advanced Trading Strategies

Learning #Bitcoin #Altcoins trading by watching Forex & Stocks trading videos on YouTube is like learning to skateboard w a bicycle manual.
— Alvin Lee (@onemanatatime) March 26, 2014

Now comes the fun part: how can we take all that we've learnt so far and put into good use for trading Bitcoin/Altcoins? Here are some pointers for you:

• What we've learnt is more of a tool to make better entry and exit positions.
• Keep in mind trading the bitcoin & altcoin markets as you watch the rest of these more advanced videos, and I hope you'll be able to gain some insights to build up your Bitcoins & Altcoins trading strategy.
• Granted, forex & equities trading is much different from bitcoin or altcoin markets. However, the fundamentals are the same, and you should learn to draw lessons from the strategies talked about in the videos to supplement your bitcoin/altcoins trading strategy.

In the next videos, more advanced trading strategies and chart patterns will be shared. These strategies may seem very specific, but my goal is to give you better understanding of how these analysis tools are used, and to give you an idea of how different tools can be used to develop a single trading setup. The specifics are not important; what I hope to achieve is to open up your minds to new ideas, expand your trading knowledge, and ultimately encourage you to explore a diverse variety of trading strategies.

Read up more on some of the main ideas discussed:

• Fibonacci Analysis
• Fibonacci Extensions vs Retracements
• Elliott Wave Theory
• Harmonic moves/pattern

If you have more time to spare, watch these 2 very good (but lengthy) videos by Steve Nison for more trading strategies:

• Profiting in Forex Disc 1: https://www.youtube.com/watch?v=RCTr8WGQDIw
• Secrets To Becoming A Samurai Trader, Steve Nison [1/2]: https://www.youtube.com/watch?v=VKtGeZUjLWo

What other trading strategies and chart patterns do you use for Bitcoin & Altcoins trading? Share it with me! I'm always up for a discussion and would love to learn more & improve my trading strategy. Leave a comment below or tweet me at @onemanatatime.

Cryptocurrency Portfolio

Although I've been talking about conslidating my portfolio into a largely BTC/LTC one since January, I didn't really do it until earlier this month. For me, it's back to basics: use technical specifications as the basis & utmost important factor for long-term sustainability.

Hence, my cryptocurrency portfolio now consists of a largely Bitcoin one, with a large portion of the other half in longer term altcoins such as Peercoin, Litecoin, Vertcoin, and Dogecoin. Lastly, I also leave about 10-20% of my portfolio to daytrade altcoins. I have listed my cryptoportfolio on the right column of this blog, and will continue to update it as the markets evolve.

Also, keep a lookout for my Cryptocoinchart's Investment Club profile, where I share new altcoin trades.

There are many available trading strategies to choose from to suit your own needs, such as daytrading, position trading, swing trading, fundamental trading, momentum trading, or scalping, just to name a few.

Although the Bitcoin and Altcoins markets are very similar, I trade them very differently. With Bitcoin and trading on Bitfinex, I would say my trading strategy is mainly a position or momentum trading one, and largely technical. On the other hand, my Altcoins trading strategy is largely fundamental although technical aspects play a role in selecting altcoins, and consists of a combination of swing and momentum trading.

In general, I use simple technical analysis concepts like a top down analysis, resistance/support, and structure to read charts and find entry/exit positions. On Bitfinex, I typically trade using resistance/support levels, coupled with breakouts on high volume. While for most altcoin markets, I first look for rising trading volume, and typically try to predict breakouts with fundamental analysis, or buy on retracements when momemtum kicks in.

Timing is everything in trading, and I typically keep my watchlist to 5 or less cryptocoins at any one time, and only spend about a day or two trading each one. In fact, I was only looking at 5 different altcoins throughout the whole month of March, but that's more than enough if each one made profits of 100-1000%. The altcoins that I were watching this month include: Heavycoin, Blackcoin, Digibyte, Fluttercoin, and Hirocoin.

Lastly, I just want to share some of the tools I use for trading these dynamic Bitcoin & Altcoins markets. If you have a useful tool I didn't list here, share it with me!

• Charts - Bitcoinwisdom.com, Cryptocoincharts.info
• Exchanges - Bitfinex, Cryptsy, Mintpal
• I try to keep off other exchanges. Although i do also use them on occasion, I keep my coins in there for a minimal amount of time, and withdraw it into a local wallet as soon as I've completed my trade.
• Charting - Tradingview.com
• Other resources for altcoin data (e.g. volume) - Cryptocoinchart's Market Comparison Chart, Coinmarketcap, and Crypto Coins Table.

More trading Tips

With that, let me just leave you with a few wise words and trading tips from @TraderHMS on Twitter.

1. What goes up must come down
Again, I just want to emphasize this, because I constantly get asked about chasing bubbles and if an altcoin is a good buy after rallying 500%. Every big price movement is followed by a big retracement, and the next retracements will gradually become smaller and less volatile; until new movement breaks the sideways momentum & starts a new cycle.

2. Money in the pocket is always better than potential profits
I typically don't hold a short-term altcoin for more than a week. In fact, I usually only spend 1 or 2 days trading a particular cryptocurrency. For now, my rule for trading shitcoins is "fast in fast out", and to always "sell too early and never buy at the bottom".

Losers postpone taking losses: Trading Card 96 pic.twitter.com/bvbPv3Fnqu
— Trading Cards (@TraderHMS) March 7, 2014

3. Trading is 99% watching and 1% trading
And another 1000% planning/learning/preparing. It is important not only to know "how" to trade, which I hope this post has helped you with, but also to know "when" to trade!

Trading Card 268: You need good technique and also good tactics pic.twitter.com/vBQqm56ceV
— Trading Cards (@TraderHMS) March 11, 2014

4. A good balance is essential
Do not be blinded by one particular type of analysis technique. Always try to couple a few different indicators in your trade setups, to improve the profit probability of your strategy. Finding a profitable strategy is easier said than done, but keep in mind that trading is a long term game where consistency is key. Think of profiting over the next 100 trades, and not just about the next 5 trades; and make sure to consider various types of analysis in your trading strategy, namely fundamental analysis, technical analysis, and market tone.

Think in terms of the next 1,000 trades you are going to make: Trading Card 165 pic.twitter.com/jjljUNeUn6
— Trading Cards (@TraderHMS) March 25, 2014

The Best Trades: Trading Card 266 by Michael Marcus (hedge fund manager profiled in Market Wizards) #investing pic.twitter.com/t6IhrEY7Km
— Trading Cards (@TraderHMS) March 5, 2014

5. What is your trading strategy?
A trading plan is essential if you're thinking about becoming a profitable trader! But what constitutes a good trading plan? Firstly, fundamentals; you need a basic plan for SELECTING the coins, you don't want to be trading any old shit coin. Secondly comes the technicals to help you pick an entry/exit; devise a holistic trade setup which considers a variety of factors. And lastly, consider the market tone; is there enough liqudity in the market, or is there growing interest from the community?

So, can you answer this last question?

Can you answer this trading question? : Trading Card 267 $SPY $FB $ES_F $QQQ pic.twitter.com/rwEPnvn99N
— Trading Cards (@TraderHMS) March 10, 2014

I hope this post has helped you on your cryptocurrency daytrading journey, and that you continue to learn and improve your strategy. Combine different analysis techniques, such as the ones mentioned above, and find a style that suits you; and you should be well on your way to developing your own profitable Bitcoin & Altcoins trading strategy!

If you have any questions at all, feel free to tweet me at @onemanatatime, or leave a question on ask.fm.

All the best & good luck!

P.S. If you're new here, make sure to check out my previous posts about Bitcoin & Altcoins daytrading:

• Reddit discussion about this post in /r/CryptoMarkets
• How to Pick & Trade the Next Profitable Altcoin: An Insight into What Goes Through my Mind
• A Beginners Guide to Margin Trading on Bitfinex: Why you Shouldn't be Trading on Exchanges
• Embarking on my Bitcoin Trading Journey: Learn Basic Technical Analysis

1. Top Down Analysis

Firstly, lets look at the top down analysis method of reading charts. I always begin by trying to understand the market from a bird eye's view. Compare both charts from a long term period (e.g. 1d) against one from a shorter period (e.g. 15m) to get a holistic view of the market. This will help give you a general perspective of market trends, while peaks & troughs give you an idea of market resistances & supports.