All language subtitles for 4. Trendlines, Channels, Supports and Resistances

So in this lecture we're going to be talking about trends and channels.

So what are trends.

Basically prices move in trends.

They can move in an up trend a slight trend or doctrine.

That's the only way they can move.

So the trend is basically a direction that prices are going up.

You can have an uptrend inside trend or a downtrend and it's basically when prices are moving up rates

and nothing is going to be characterized by higher highs.

So this is a high point in the price going up.

And this is high priced one this is high too.

So we have higher highs and we also have higher lows.

So higher higher and higher was characterized and octoroons a downtrend is when prices are going down

and down trends are characterized by lower highs.

So every time the price goes up the high is lower than the previous high and lower animals as well.

Then we have signed the trends suicide trends.

It's basically one the price is going in a sideways fashion.

Prices often do not continue to trend.

And this is why you always hear people saying the trend is your friend or don't go against the trend

or any other sayings about trends because it's actually mathematically proven that prices when they're

going in a direction they tend to stay in that direction.

So trends tend to persist.

So you want to be going in the same direction as the trend or not going against it.

So this is something that's in all markets.

It's a technical analysis it's perfect analysis and it's the strongest thing in Colossus is the trends

now.

So there are going to be trends now trends to look at them and to make them more visible.

What we usually do is we draw a trend line trend line is basically a line that you put to really visualize

the trends.

OK in this case we have an uptrend line because there's an object.

Now when you have something like this what this tells you is that the price of the product you're trading

is going to be moving alongside the trend.

And if ever it touches the trend it's probably going to bounce off of it and keep going in that same

direction.

So as a buyer if you want to buy something you might not want to buy it here.

You might want to wait until it reaches the trend and buy just about because you know this is a good

support for the trend and it's going to bounce back off.

So you can get a good price.

So if you decide to sell let's say on this day.

Well if you bought here you made some money.

But if you bought here you probably just sold flat.

So it helps you getting a good entry.

Now why do trends like this create sort of a support.

And when I say support I mean it supports the price the price is not going below it well because everybody

sees this trend.

You know we have the best pattern recognition ever humans.

So when you see a chart we recognize any type of power.

And you know Google is developing a very good pattern recognition software.

But they're not better than the human eye.

Right.

You know I can put sunglasses on and trick Google and not knowing that it's not me but you know you

can have a you know a one year old kids and you put glasses on so not you.

Because our eyes are so good in recognizing patterns that evolve for millions of years.

So we see those things.

Now I'm not the only one who sees it.

Everyone sees it.

So when you have a trend like this a lot of people are putting their buy orders here to buy.

So imagine that this so this price here is about let's say let's say this is $38.

If you go on the order book where there's all the buyers on one site and sellers on the other well you

might have a few buyers for 100 coins let's say at 39 at 38 and a half maybe 100 but at 30 it's because

there's a good support here.

There might be so many people placing orders so many.

And then you might have 10000 coins.

Now because there are so many buyers there when sellers come in and sell they're going to have a hard

time breaking dislikable they're going to have a hard time selling 10000 coins because that so many

buyers that the price is not going to go below 30 and it's going to bounce back off of that and then

go back up when buyers come into buying more aggressively.

So these supports here or the trends continue because people make them continue because people place

orders.

And that's why it continues.

So you could say it's a self-fulfilling prophecy because everybody believes that the trend is going

to keep going up.

So they're placing orders and because they're placing their orders to buy they're making it keep going

up.

Right.

You know so we don't know if it's exactly self-fulling prophecy if it's if it's something that has to

do with you know emotions and movements and direction or.

But the fact is that trends do persist.

Right.

And yes there are part of it that is it is a self-fulfilling prophecy because we believe that we we

help it persist.

So it's something to know.

Now one other thing to know about trends is basically when the trend to break there is a reversal.

So when you have a break of the trend line then we could go in the other direction.

So if you wanted to get out of this position and or if you are waiting for a time to get out and it

breaks the trend while you might say OK you know what I'm thinking my my profits here and I'm leaving

the position because it might keep going in the other direction.

So these things are going to help us figure out our entry points and exit points.

Even longer term investors.

You could use them to help you out just in your absence.

So usually things like this trends don't just we don't just draw a trend like we usually channel because

things actually move and you know within a channel.

Now I put in here some examples of stock prices but then what else is the same for crypto or any other

financial product.

So you have an uptrend here and you have the support line rate and you have the upper resistance line.

Okay.

So a downtrend here and you have the support line and you have the resistance line.

So we always called the line that's above the resistance

and the line below we call the supports.

Why is that because the line law is supporting the price when the price touches it.

It bounces off of it.

So it's free.

And when the buck is there as the price cannot break over it very soon.

So here we have the downtrend uptrend again if you're buying you might want to buy here if you're looking

to exit when you might say I want to put my price here because you know what it's going have a hard

time breaking it.

And that could help you with your entries and exits again if you if it's a downtrend.

And then you want to maybe sell your position and it reaches here you might think well you know what

I'm going to sell it it's probably not going to be the break over here and I might be able to buy back

more if I want or not but usually don't want to go against the trend.

And that's why they say don't go against the trend.

So if you're buying something don't buy something that's in a downtrend.

Wait until it's not in the downtrend anymore and then by its side trends and this happens when the market

is moving sideways where something is just moving in a side of direction it really like the product

you can buy it at the lower part of the sport and so the resistance by near disport something here the

resistance by news for it's of no resistance and that would be you know more of a training based approach.

But again even as a longer term investment you would want to buy somewhere around to support and then

leave it.

And you know obviously if it breaks above this resistance then you know it could really keep going.

So supports and resistances are basically those lines that we draw around the charts to help us figure

out which how what price ranges are supporting the price and which price ranges are causing any resistance

for the price to recover.

We're going to see worse in residence with with around Trents.

We're also going to see support and resistance around round the numbers with its own a round number.

There's often going to be big supporters as you might have something you know let's say whatever financial

product called EBC it's going up and it's reaching $10000.

Well you know what a lot of people who bought are on these prices might say I want to sell a 10000 but

I want something thousand bucks.

So if you look at the order book of all the buyers and sellers and buyers here sellers here you know

you're going to have some sellers at you know 9000.

You might have some 9500 ads for 100 coins 100 coins.

Nine thousand six hundred seventy two and twenty two cents you know 500 coins.

But then you know what 10000 10000.

0 0 you're going to have hundreds of thousands of coins.

Why.

Because it's around number and so many people send the orders at round numbers.

And because there are so many orders to either buy or sell you know sell if it's higher price than the

current price or buy if it's a lower price than the current price.

There is so much demand or supply depending on the situation that the price is going to have a very

high time to over it.

You know if there's a mill if there's a million shares or a million coins to sell at that price will

you know what I'm going to have to have buyers who want to buy all that million shares before we can

move on to the next price and start having transactions that pop up on the dime of sales that have a

higher price than the 10000 price.

So we can see on the chart that higher price so the prices to go over that we need buyers to execute

or fill all of these orders.

All of these people who have no orders to to sell at that price.

So what we're going to see is very big supports or very big resistances at round numbers.

If you know of the current prices.

You know I don't know 5000 here.

Well you know what.

There's going to be a lot of sellers at 10000 and there might be a lot of buyers at you know 1000.

And there's going to be fractals So you're also going to have large amounts of orders at all around

prices so I 2000 3000 4000 at 2500.

You know at the then it's going to become even fractal so I 2400 2300 2200.

And there are two thousand two hundred fifty dollars $75.

So the smaller smaller increments there's still going to be you know a lot of orders compared to other

prices.

But you add these big round numbers.

That's where you're going to have the biggest amounts on you know a big big big round number so it depends

on the product you're training if you're trading something within the $5 range.

Well $10 is going to be huge.

$1 is going to be huge if you're doing something around a thousand dollars or $2000.

Well 1000 is going to be huge.

Five thousand is going to be huge.

So the nearest really really round numbers are going to be the hugest other small round numbers.

So we're going to have a kind of squirters.

They have a role reversal property so when a very big round number gets broken it or when to support

or resistance gets broken there's a role reversal.

So it becomes the opposite.

So example if this here is a resistance.

OK.

And then at one point and don't mind the walk straight on something like this goes up but closes below.

We don't really consider this a break.

We want to make sure that the candle is above so the closing price is above this situation.

The candle went up then sellers came in and started selling and went back down and closed here.

So it actually closed within that range.

But if let's say tomorrow the price goes up and the candle closes above the resistance and let's say

yeah let's say this resistance was just for for example let's say the $6 was here this was $6 or let's

say this was $100 just roll for for this example.

It's a hundred dollars and everybody was like you know what.

At $100 you know everybody's selling and everybody selling around a hundred bucks or at the hundred

bucks because the bottom floor and it's $100 for them is is huge.

It should have reached there so that it breaks in this situation when it goes up.

Everybody who wanted to buy it or everybody who let's say wanted to get out got out here and then everybody

else who wanted to buy at a lower price than now it's too high.

I don't want to buy at you know a hundred and five or whatnot.

So what happens is this line which was the previously the resistance actually becomes the support.

Why.

Because if the price goes down again.

Now we have all the people who wanted to buy a blower who were who did it who now don't want to buy

a 110 105 when it comes back to 100 in their brain it's like oh it's not 100 I'll get it there now.

So they'll start buying it there even though before they saw that it is too high.

Now to see it at a good price because it came back to that round number.

So he started buying it there and then the price.

Can't break it and goes back up.

So resistances become supports and something supports.

Also if they break they become the resistance.

So there's a role reversal in all these situations again even in an up front.

If this if this uptrend broke and the price went up.

Well you know what a lot of people who were buying here when it goes back up year they're going to start

selling because they'll be like oh it's it's back and back going and they'll sell.

So it might bounce back of it and go down.

Same thing for here if it breaks the resistance goes up then a lot of people who were selling here and

wanted to buy here and be like OK now it's too high.

If it comes back you're going to start seeing an attractive again because it's somewhere near the prices

that it used to reach.

And they'll bite back.

And again it could be partially because it's a self-fulfilling prophecy because everybody does not that

we have this property of role reversals but it's something that exists so you have to be mindful of

it.

So these are sports resistances and trends channels.

Now let's go on trading here and check some of that on Bitcoin and on these other cryptocurrency.

One thing to consider though is that because with crypto currencies prices move so much we cannot really

use regular price charts.

We have to use Lachance now Whitelock charts are is logarithmic price skills learned price skills basically

makes it like this when you're looking at a chart.

This is really backwards.

You're looking at a right and you're looking at something that went up from let's say a dollar up to

let's say $10.

How big of a percentage return is that a dollar to $10 is 10 times so 10000 percent return.

Now if I have this chart here and I have here $20 $30 you know all the way up 40 50 until I reach.

And then I see that the price went up from a dollar it's $10.

And then I don't know and it went to 100s.

Well guess what I might think that you know this move here

is way bigger than this.

But in fact I'm going from one dollar to $10 is a 100 percent return and going from $10 to $100 is also

a thousand percent return.

So this move here is as big as this move here.

When I look at percentages but when I look at prices in dollars it might seem that this is way bigger

than this.

And in cryptocurrency this is one of the biggest problems because you're looking at something like Bitcoin

who is trading a few dollars and it goes to thousands of dollars and it goes to $20000 and goes back

down to $6000.

And then people can't really think of the percentages because it doesn't make sense to them.

The numbers are too big and they were too small before.

So they can't really see how much if it if the direction is up or down and see the trends.

So what we have to do is stop looking at price charts which basically here what is the division let

me price scale is plotted so that the prices in the scale are not positions equal distantly.

So here we have an equivalent distance $10 million dollars.

So it's that the scale is played in such a way that two equal percentage changes are plotted as the

same vertical distance on the scale.

So if I had $1 here and then $10 here that's a 1000 percent return here I should have a thousand dollars

$100.

And here I should have a thousand.

So the distance between my prices on the vertical axis is based on percentage of times and not on ten

dollars or you know this isn't even right and not a $10 with 10 10 times in percentage.

And that's what we want to use.

OK.

So if

we go here on treating view with topics that's takeouts

my when I hear bitcoin.

OK.

So let's take a look at different and let's put Bitcoin.

You as the.

And let's put it on between next because actually that Phoenix has been there for a long time.

So they have a longer chart I can look at instead of just by Nannes by announcing a new exchange will

not.

No it's been there for a year and a half maybe but between Next has been there for a while longer.

So we have a longer time frame to look at.

So when I look at Bitcoin and look at the normal charts

look at this look at this price list here and just put it this year bits.

OK.

So what do we have here.

We have something that went up from $2000 to $20000.

Right.

That's huge.

But then it went from $20000 all the way down to seven thousand six thousand dollars.

That's a huge drop.

So when you look at this can you see a trend.

Can you be like oh this is going up or is it going down.

What does it look like now here it looks like it's going down in huge amounts.

Twenty thousand seven six thousand that's huge.

But here it looks like it's going really up.

Well you know what what about here.

Is this a big move up what we've got here is this bigger than this

well guess what this here might be as because this is just we can't see it.

Can you really see where it went from one cent to a dollar or from a dollar to $100 that would look

really small compared to like going from 10000 to 20000.

But you know what.

Going from 10000 to 20000 is just doing 100 percent return.

All this move is 100 percent return you know well guess what.

From here to 10000 This is not a hundred percent.

This is a thousand percent.

So this is way bigger.

So here too we have big amounts.

So what we need to do is at the bottom here you see there is the log.

You can look at a log scale chart.

And if I click on this you see the chart changes automatic so it could load.

You see this is the regular chart and if I click on walk or now difference right now on the y axis here

on the site what it's doing is it's saying OK well if I am looking at a price of let's say if I look

at the difference of price of 300 from 300 is this to get a round number here.

So it makes more sense to try to have 100 years of work so up.

So the difference between 100 at the bottom here if you can see that difference between 100 and 130

If 30 percent return.

It's the same thing as going from you know 10 down from 8000 to a thousand three hundred.

It's going to be the same size rate or year from 2000 2600 a 30 percent return the same as from 100

to 120.

So now we have a skill that's in percentage return and that's what we need.

Because you know what.

It's very hard to understand and see how these Kryptos are moving because they're moving so much that

we're not used to seeing numbers like that so we have to use our skills and now data looks better.

Right.

OK we'll look at this.

You see this move here that I talked about earlier.

How big of a move is that now in percentage return we see that it's actually a really big move.

I can click here on this measure measuring tape I guess at the bottom

click the top OK.

So here in 67 days this move was one thousand two hundred percent return.

Right.

So you would have made tough times more many thousand you make in in two months and that was a huge

move.

Well that that was you know that was a big move which is huge right.

It's just it happened when the price was at $60.

So when the price goes from 60 to a thousand you know is different than what people don't realize that

this is as big of a move as when it went from six hundred to 10000 or something like that.

Right.

Then we had.

So this was 2014 then because Bitcoin's price you know had a little pullback until 2000 16 and then

we had this really nice uptrend and now you can see that and you know what we might have an option here.

You know how this is going up when we're looking at a loss you just had a really fast move up rate because

we did have this scenario where it did go up in 2000 17.

So this is 2017 so in the beginning of 2017 until 2000 18 which is you know the huge year that it had

it went up by almost nothing.

Just put it a bit higher so almost 20000 percent sort of almost 2000 percent well 2600 percent of your

action.

Exactly.

So in one year 2600 percent huge amounts of returns.

Right.

But then it actually went from here.

And we're going to get into this later on this when we talk more with percentages higher than expectations

but we're down 70 percent.

But that went up.

Twenty two thousand six hundred percent before that.

So you have to look at perspective.

These are risky assets.

They do move a lot and the percentage returns are crazy.

Now you know if you can avoid buying something at its all time highs like this and try to buy something

when it's you know it's at a good price.

Even from a technical standpoint we're going to look at more more of that later.

It's really helpful.

You know again if you're buying something and so this is something that I just bought.

Well here's what we're looking at on Bitcoin.

So on BTC right.

So Ayon compared to Bitcoin not on dollars but on Bitcoins right.

And I'm looking at a deal.

OK this is a one day trip.

So each candle is the only I also looking at you now look at this if I like this coin and I'm not saying

I like it but if I like it's I don't want to buy it when it's in a downtrend like this.

I can see the trends now a downtrend.

And again I'm looking at it compared to bitcoins.

So what does that mean that means before let's say last month's buying one AOM would cost me zero point

zero 0 0 1 9 Bitcoins rates.

But he said if I wanted to buy one here one bitcoin if I wanted to buy one ayont it to come 0.00 0 3

bitcoins.

But now I can buy one on four zero point zero zero zero zero seven.

That's a way better price.

So I'd rather not have Ayon while it's going down and have Bitcoins because then I can use my bitcoins

to buy more agents when Iran is at a lower price.

So even though if you want to buy something you have to look at the trend and the prices to basically

see if this is the right time to buy it or not.

Now if something is not in a is in a downtrend like we've said you were going to go against the trend

but look at this.

This is the resistance line.

And here it just broke.

So then I bought some here so now I if I like it I expect this to go up.

I'm not saying A-Rod is a good coin or whatnot.

I actually had a trade going on that has nothing to do with from an investment standpoint.

But I did have a trade that went in here.

But if from investment standpoint it's a good investment and you want to buy it.

And it breaks this type of resistance then you do get into the position now.

It doesn't mean it's guaranteed to go up.

It could drop out but it's way more likely.

What.

Why.

Because a lot of people are seeing this.

A lot of people who didn't want to buy now start buying a lot of people were shorting which is something

outside of the scope of this because we're not going to be shorting we're investing might be getting

out of positions like people who were betting against us might be getting up because now we know it

could go back up.

And in this soup this resistance might become the new sports with my state and then go back up.

But you would use that and that would help you avoid buying in other situations like buying here or

here or buying here or buying here or being here.

So by your means I saved the money by not buying earlier.

So again entry point is very important but again always looking at large scale and not just price skills

you know some of these things when you look at price.

They've moved up 4000 percent and down and I'm going to give more example of some of the other coins

and how much they moved and look a little bit more on the charts when we actually get into investing

when I want to compare active investment versus passive investment when you just hold your coins versus

when you actively trade them and then I'll be looking at some percentages so we'll get back into that.

But you know that's just a little intro for you to understand charts because you will look at church

every time you want to buy them.

And that should be it for channels supports resistance charts lock scale charts and index lectures.

We're going to start looking at a few other patents.