Crypto Academy Week 15 - Homework Post for @yohan2on

In order to determine the most relevant zones of the market, such as Support, Resistance and/or Liquidity Zones (Order Blocks), I will use 3 time frames to identify them and also to observe the strength of the trend. I do this to see what are the highest probabilities that the trend will continue or that there will be a reversal of the trend. In this sense, the time frames are as follows:

• 1 week (Identification of Order Blocks and relevant zones).
• 1 day (Identification of Order Blocks and relevant zones)
• 4 hours (In the latter, I will take my entries to the market, looking at the strength of the candles in conjunction with the Order Blocks identified, in addition to the other confirmations).

In this same specific order of time, I will observe the "BTC/USDT" in the Tradingview platform, an asset that I have chosen to look for medium and / or long term operations with the "Swing" trading style. Now, to work these timeframes and find the most relevant areas with the highest probability that the price will turn in one direction, I will use a study based on identifying areas of high liquidity in the market.

Order Blocks: These basically house large amounts of pending orders in the market, looking to buy in a certain area cheaper and / or sell in a more favorable area depending on the trend, in short, are the areas that provide liquidity at certain points on the chart, now, to determine the area of an "Order Block" we must do the following:

• A "Bullish Order Block", is identified with a specific candle, which means that, for us to see one, before a strong upward momentum, there must be a "Bearish Candle", followed by a green candle and then the momentum mentioned above.

• A "Bearish Order Block" is also identified with a specific candlestick, which means that in order for us to see one, before a strong bearish impulse, there must be a "Bullish Candlestick", followed by a red candlestick and then the impulse I mentioned above.

This will help me to see which trend is stronger and determine my chances of investing in one direction and not investing in the wrong direction of the trend. So, this is what I will look for in each of these time frames to make a very likely investment decision.

Studies and resources to use:

In order to look for the best probabilities in the market, I use several resources (Studies and/or Indicators) that, allow me to identify possible zones where, the price can make a backward wave, look for liquidity and follow the trend in course, if in such case, it comes to happen that, these liquidity zones fail (Order Blocks) and the price makes a break against the trend, then, I would be considering a change of direction and I would look for operations in favor of the new predominant trend in the market. However, to support my "Order Blocks" previously identified in each temporality, which are basically stronger supports and resistances, I support myself with other indicators and studies, so that they confirm me this block of orders, these indicators that will help me are:

Moving averages (EMAS 40,60,100 and 200): In order to follow the trend, I use my moving averages in the periods specified above, to look for rejections in the direction of the predominant trend of the market and also, I look for these rejections in the averages to enter in confluence with my "Order Blocks", this gives me a layer of security in my analysis, to be able to invest in that direction.

Fibonacci Retracements: Fibonacci Retracements play a very important role in confirming my market entry, as they basically confirm if an Order Block is valid, as long as the price interacts with the Order Block and of course with the 78% and 88% Fibonacci Retracement levels. Which means that, if after an impulse the price makes a correction (Retracement) to the area of my Order Block and also coincides with the Fibonacci levels mentioned above, the block is valid and if the price reacts to this, it is the entry signal we need to invest.

Price Action and Candlestick Patterns (Optional): The next confirmation step is optional, however, this can give the final confirmation to enter the market. This last possible step in my strategy, has to do with the "Price Action", in which I evaluate the strength of a candle and additionally, if this candle of strength, passes over the "Order Block" that I mark when I identify the most relevant zones in each time frame, it can tell us that we can enter the market, following the risk and capital management that I commented at the beginning of this publication.

Exit the market (Stop Loss): In my operations I always seek to place the highest percentage of probabilities to enter the market, for this, I support myself with all the studies and indicators that I mentioned above, the only thing I am missing, is my limit of losses, for this, I place just my Stop Loss 2% below my entry price, although depending on the context that is present in the market and not get out early from a winning operation, the ideal area for my Stop is a little below my "Order Block".

Bitcoin Technical Analysis 1 Week

^{BTCUSDT weekly chart of TradingView}

In one week charts, I have identified a "bullish Order Block" and a rejection in the 60 period moving average, this gives me the first confluence I need for a bullish signal, then, plotting the "Fibonacci Retracements", I realize that the price interacted just with the Order Block marked just in the zone between 78% and 88% of the retracements, so, the Order Block is valid in this temporality. The only different thing is that the bullish candle that formed after the rejection, is not being a candle of strength, in that sense, I must wait for the price to exit the bullish Order Block marked to be able to enter. But we already have a clear picture on 1 Week charts.

We can also see a clear "Bearish Order Block", however, for this temporality and the direction that has the price and the EMAS, we are still in an uptrend, so, despite plotting and identifying it, we must wait for the way the price develops, to make a decision that supports my intentions and the odds I seek to enter the market, if the price rises and interacts with this block, I will be attentive, for a new downward movement.

Bitcoin 1 Day Technical Analysis

^{BTCUSDT daily chart of TradingView}

On 1D charts there are both bullish and bearish Order Block formations, and the EMAS point to a new price direction, in this case bearish, however, this is a Sub-Trend, so the strongest direction is still bullish, as per the 1 Week chart I shared above. In this context, where the price is at the moment, I would look for in the next 4H timeframe, a bullish entry, relying on the strongest timeframe found and its possible shift.

However, if in this 1D time frame, the Order "Bullish Block" identified does not have enough liquidity for the price to continue rising and the price makes a downward break below its zone, I can enter the market, following the direction of the bearish price. In the image above, you can see how my entry configuration would be in case the price makes the mentioned breakout. If this does not happen, and a strong candlestick is shown on this chart, I would look for an entry to the upside.

Bitcoin 4 Hour Technical Analysis

^{BTCUSDT 4-hour chart TradingView}

In the 4 hours chart the outlook is bearish, the EMAS are aligned downwards and show forcefulness in the bearish Sub-Trend that was formed, in this case, identify a new bearish "Order Block", where the price, has already interacted with it, and also has given positive signals to the downside. If it returns to this zone and interacts with the bearish "Order Block", it is a good opportunity to enter a trade, as long as the price interacts and we validate it with the Fibonacci retracements. In any case, if the opposite happens and the price forms a strong bullish candlestick, coming out of the larger bullish Order Block, identified in 1 week charts, and breaking the bearish Order Block mentioned above, my trade will be bullish, following the trend.

Conclusion:

To conclude, I must say that trading and operations in the financial markets involve many risks, but my recommendation is to educate yourself in order to mitigate the risks and place the odds in your favor. In addition, this type of trading style is much safer and more reliable than the others, so I like to analyze in higher time frames and let the price develop as much as it wants, until it fulfills my prediction thanks to the analysis I have done. Finally, I really enjoyed doing this assignment, I enjoyed a lot, being able to bring my long term strategy for this assignment, I take this opportunity to thank the teacher @yohan2on for this great teaching.

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^{Gif image sponsored by jacorv}