How to Trade Cryptocurrencies Profitably Using TD Sequential - Steemit Crypto Academy | S4W8 | Homework Post for @reddileep

in hive-108451 •  3 months ago 

Hi friends, I am here again for the intermediate courses in S4W8 lessons presented by respected prof @reddileep on "Trade Cryptocurrencies Profitably Using TD Sequential ". This is my entry ...

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(designed in Canva)

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1- Define TD Sequential Indicator in your own words.

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The TD Sequential Indicator is another great indicator of technical analysis which has its own postulation in giving market outcomes as a guide for trading cryptocurrencies. It is a trend indicator that was developed by one great analyst Tom Demark. The main focus of this indicator is to anticipate the different turning points of a market in a given period. This indicator tries to determine the price movements when it's over-extensive as well as when there are trade corrections or Reversals due to trend exhaustion.

In an overview of the TD Sequential Indicator, the Buy Signal is as important and pivotal in its analysis and can be applied by taking the following steps including the Stepup, Intersection, and Countdown. In the case of Setup, there should be the presence of at least nine (9) sequential or consecutive closes which is observed to be lower than that of the corresponding closes earlier.

The intersection, in this case, can be explained by noting that the price movements are observed to decline in a sequential and orderly manner rather than steep or sharp swings. Therefore we can deduce that the high of any day should be greater than the low of the corresponding days earlier. While the countdown comes when the setup and intersection must have been confirmed and satisfied. This comes with the count for the number of days we have closed lower than the corresponding closes earlier which we expect it to reach 13 to a BUY signal.

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(All screenshots are from the Tradingview site)

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2- Explain the Psychology behind TD Sequential. (Screenshots required)

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The TD Sequential as we know is a trend indicator and it was purposefully developed to determine trends point of exhaustion vis-av-vis anticipated market correlation and reversals given if it is on a temporary or long term basis. Any Trend-driven indicator is always observed to come with wide range adoption, maybe the saying "the trend is your friend". In its postulation, the TD Sequential indicator ensures to isolate trend exhaustion which are key signals to anticipate possible market corrections/reversals especially in extreme scenarios where price movements are observed at Overbought and Oversold regions.

In analyzing the TD Sequential Indicator, we will not forget the important two elements why it has received wide adoption and versatility in the cryptocurrency space. These are the elements that make up the TD Setup and the TD Countdown. While the TD Setup primarily depends on the trend momentum to ascertain price ranges, relative to indicate trend exhaustion or strength that anticipates market correction, the TD Countdown is basically trend related which determines low risky opportunities for the trader to ascertain directional moves.

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(TD Sell-Setup)

Let's briefly look at the TD Buy/Sell Setup scenario here, when a given market closes below or above its corresponding bars earlier and then makes another nine (9) consecutive closes either below or above its corresponding bars earlier. We already know that for a TD Buy Setup to happen, we expect that market trend is found n its low swing point and for the TD Sell Setup, the market is expected to observe around the swing high point or level. This categorially means that we should make our buy and sell orders using the TD sequential indicator when the market is with on Low or High peak respectively.

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(TD Buy-Setup)

(All screenshots are from the Tradingview site)

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3- Explain the TD Setup during a bullish and a bearish market. (Screenshots required)

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Bearish TD Setup

Just as we know that adding the TD Sequential indicator is necessary to have an insight on market movements and anticipate a valid confirmation of a bear trend. We can also remember that the sell trade order position is expected to occur in a trade when price movements are at their swing high points. Just before the market correction as we anticipate, a downtrend is observed and Bearish TD Setup initiated.

The second leg to this scenario is that we should expect a swing low point and at the point, we observe a new bullish/green candlestick emerging, we can now count this as our number 1 candle (TD 1) which invariably should have closed above the previous forth period cycles. This is necessary to determine the start-up of the TD number, hence the need to get the setup appropriately.

A good Bearish TD setup for number one candlestick should also see the same application. The second and preceding candles should always close above the four-period candle.

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Bullish TD Setup

For the Bullish TD Setup, we should be having an opposite scenario. The bullish scenario, in this case, warrants that we should have the Buy scenario where price movements are observed to be at their low swing point.

A bullish movement is observed for a given period before a market correction is anticipated which changes the course of the trend to a Bearish trend. When this market bearish trend occurs, we can start counting to ascertain if it's valid.

Thereafter, when we have the flip in price movement, we can start counting the TD number 1 which is an essential startup for the TD indicator. In this case, the TD 1 is observed to close below the corresponding four-period candle.

This scenario for TD number 1 is also expected to occur for TD 2 and so on. The TD 3 is also observed to close below the fourth-period candle which goes on till the 9th candle.

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(All screenshots are from the Tradingview site)

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4- Graphically explain how to identify a trend reversal using TD Sequential Indicator in a chart. (Screenshots required)

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Trend Reversal in TD Sequential in an Uptrend

In an Uptrend market, we are definitely going to see Higher Highs and Higher Lows in sequence with each swing preceding with a higher swing attained. This simply tells us that the market is characterized by more buying pressure or activities than supply. Hence this drags the given asset to an overbought region with the TD Sequential indicator showing the TD 9 Number at this peak.

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At this given scenario and level, the market would lose its buying pressure, and trade exhaustion sets in. Hence, what we anticipate is a market correction or reversal on the opposite (Bearish trend). Remember, we already know that at the TD 9 Number attained already, we should anticipate a possible reversal except for some rear cases where we have an extension (trend continuation) before reversals. In this counting, the first candle is observed to close below the fourth-period candle and so on.

Trend Reversal in TD Sequential in a Downtrend

In a Downtrend market, we are definitely going to see Lower Lows and Lower highs in sequence with each swing preceding with a lower swing attained. This simply tells us that the market is characterized by more selling pressure or activities than buying. Hence this drags the given asset to an oversold region with the TD Sequential indicator showing the TD 9 Number at this low.

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At this given scenario and level, the market would lose its selling pressure, and trade exhaustion sets in. Hence, what we anticipate is a market correction or reversal on the opposite (Bullish trend). Remember, we already know that at the TD 9 Number attained already, we should anticipate a possible reversal except for some rear cases where we have an extension (trend continuation) before reversals. But In counting, the first candle is observed to close above the fourth-period candle and so on

(All screenshots are from the Tradingview site)

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5- Using the knowledge gained from previous lessons, do a better Technical Analysis combining TD Sequential Indicator and make a real purchase of a coin at a point in which TD 9 or 8 count occurs. Then sell it before the next resistance line. (You should demonstrate all the relevant details including entry point, exit point, resistance lines, support lines, or any other trading pattern such as Double bottom, Falling wedge, and Inverse Head and Shoulders patterns.)

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(TRXUSDT chart pair_Tradingview site)

From the trading view chart, we can see that the TD Sequential has already been formed to the TD 9 number, and a d market correction is already in place. The TD 3 number is observed to have closed above the 4th-period candle in the sequence.

Combining the TD Sequential and the RSI indicators would help give a clearer trade view in ascertaining when trade is observed in both extreme positions. The RSI which has a reading that oscillates between 0 to 100 bands has 0 to 30 as its Oversold levels and 70-100 s its overbought levels. Those regions simply give us signals of possible trade positions to take each time price movements are found within such levels.

Trend movement was observed approaching the Oversold level as well crosses the line 30 band while the TD Sequential indicator was also observed to have formed the TD 9 number in correlation. This means that the market is already in its exhaustion level and lowest peak where supply pressure is weak, therefore we should anticipate market correction/reversal already observed with the bullish trend in view.

The price asset value of the TRX/USDT pair is observed at 0.09525 at the moment of this post, and with my Spot Trading using the Binance exchange, I will demonstrate to us how I carried out by Buy and Sell trade. The amount of USDT before the transaction is 132USDT coins, and I will be purchasing 15USDT worth of the TRX token gives me approximately 157TRX tokens.

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What we need to do is to click on the Buy order option, click on the Market option and enter the Value (15USDT) and then click on the BUY TRX button. This was purchased at a price value of 0.09525.

Available USDT in wallet - 132USDT
Market Price for TRX - 0.09525
Amount of USDT used - 15USDT
Amount of TRX purchased - 157TRX
Fee charged - 0.00002286BNB
Takers Fee - 0.00001893BNB

After 5 minutes of market activities, I have to initiate a Sell order position to buy back my USDT coin. At this time, I can already see that market has appreciated above the previous initiated market price.

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Market Price for TRX - 0.09550
Amount of TRX sold - 157TRX
Fee Charged - 0.00002290BNB
Amount of USDT received - 17USDT
The total value of USDT in the wallet - 134USDT
Profit after transaction (134usdt - 132usdt) or (17usdt - 15usdt) - 2USDT

The percentage value received should be more than the 2USDT received if not for the fees charged.

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(All screenshots unlabelled in this question are from Binance Exchange)

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Conclusion

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The TD Sequential Indicator is indeed a more reliable indicator that allows the trader or investor to maximize trade positions using its postulation of Buy and Sell Setup. These entry and exit positions in the trade help traders to actually anticipate market corrections relative to the swing highs and lows or oversold and overbought levels in the market.

Thank you prof @reddileep for your lessons.

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#club5050 😀

Thank you 😊