XRPUSD: True Market Overview and Trading Signals
XRP / Dollar BITFINEX:XRPUSD
Let’s look at this market not like fanatics, but like traders who know at least the basis of Technical Analysis .
What will we see with such an approach?
We can see that the price has been moving sideways for just around 1 year. It is not the perfect horizontal price channel , but we can mark the upper border like 0.500000 level and the bottom border at 0.250000 level. Also, we can add additional resistance and support levels like 0.600000 and 0.300000, and we will have important zones for the market and the additional borders for the alternative price channel .
There are no ascending price channels even if some experts try to show you them.
Why is it so important to look at markets without any emotions and personal wishes? We must see the real situation in order to take the right decisions. If we talk about the ascending price channel , it means the market is in the uptrend, and we have to buy based on reversal signals from the main line. We have to use trend following startegies and money management for such market conditions.
But this market does not move in the uptrend. We have range market conditions, and we have to use the trading and money management strategies for such type of markets.
Yes, we can have the similer buy opportunities from the same zones. But using the wrong tools in trading, which don’t match market conditions, it’s a really good way to blow up your money.
What else can we see from this chart?
The price bounced from the support level and the bottom of the price channel . RSI confirmed the reversal, and we could buy based on this signal. In spite of the upward movement, the current prices are still good for buying, because we have space for the upward movement upto the upper border of the channel. Stop-loss orders must be placed below 0.250000 support level . The main profit target should be at 0.500000 resistance level .
Now the price bounces from MAs, but this indicator is not reliable in the range market conditions. RSI confirms the reversal, and we should expect for the short term retracement. This downward movement can provide better prices for buying and make the risk reward ratio even better.
As for the possible uptrend. I would like to talk about the possible uptrend only if:
– the market will form a higher swing high and a higher swing low
– the price will break 0.500000 resistnce level and move out of the price channel
– the price will break 0.600000 resistance level and move out of the wider price channel .
Without these signals, the market can keep sideways movement in the borders of the horizontal price channel . That’s why you have to use range trading strategies with the right profit targets.
Another thing I would like to add is:
if you want to trade this market in the long run, you should think about how solid it is in the long term. If we talk about Bitcoin , we can be sure that the market is solid, trusted, and it can be used for investing. Bitcoin has value. But what about this coin? At least this market does not look solid in the long run. It is the typical altcoin which can move a little bit higher, or it can drop a lot. If you make Fundamental Analysis only based on technical parameters of this coin, you can be wrong. Think about investing and holding this coin not like a fanatic, but like a trader or investor who wants to make profit.
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Source: TW DLavrov