Technical Analysis

Lately, I have built up my skills in Technical Analysis. I learned about moving averages, accumulation indicators, and more.

Just using some prebuilt indicators without really understanding what they mean is a recipe for disaster. Therefore, I am plotting my own charts from the Mintpal API. Here is an example of BC/BTC. You probably want to click it and view it in full size.

BCBTC_3h

Each candle is 3h. The chart goes back several days. You can see the big Blackcoin pump to nearly 100k on April 14, the dump on April 16, and retracement since then.

The bright blue line is an exponential moving average with 10%. Then a grey-blue line shows a simple moving average of 25 intervals. When the blue crosses grey-blue from below to above, it represents a trend change hence a buy signal. However, moving averages are lagging indicators, so they usually come a  little too late.

The brown line is an accumulation/distribution line. It shows buying volume (possibly negative). Usually it should roughly follow the price. This has been the case until April 17. Interestingly, buying volume is bigger than selling volume. Yet, the price has risen further until April 21 and only recently the AD line took a down turn according to the price behavior. My interpretation is that this is big sign of hope in the BC community. Everybody was still hoping for 100k again. This hope is now fading.

The bar chart below shows the trade volume, similar to the Mintpal website. However, it is colored. Red and green according to the price development. However, if an interval has big wicks (the vertical lines of the candles) relative to the body, it is unclear whether it is buy or sell volume, so the bars are grey.

The last chart is a Moving Average Convergence Divergence indicator, like the one you can see on BitcoinWisdom.

I am heavily tweaking and tuning my charting. I am also still learning. In hindsight, my new knowledge could have prevented some of my losses.

My Blackcoin prediction according to the data above: Sell volume will increase, so the dumping accelerates. Unless a miraculous upward turn comes in the next two days, a spectacular crash occurs. Sell, but watching closely for the next days.

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3 comments

  1. Pingback: ChartAdvisor for July 25, 2014 – Investopedia | I am John Becker
  2. Pingback: EUR/USD Technical Analysis: Holding Short at 11-Month Low | I am John Becker

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