WEBVTT 00:05.760 --> 00:11.550 When it comes to cryptocurrency trading knowing how to use technical analysis is a must as it's the 00:11.550 --> 00:14.970 most effective way for you to determine market trends. 00:15.780 --> 00:21.480 I know many inexperienced crypto traders trade solely on news and rumors and they've ended up losing 00:21.480 --> 00:22.490 money. 00:22.500 --> 00:23.250 Why. 00:23.280 --> 00:28.990 Because they trade based on other people's opinions or in other words they are gamblers. 00:29.800 --> 00:35.290 So if you want to become a profitable trader you'll need to master some technical analysis techniques 00:36.480 --> 00:39.930 before we go into how to make use of some technical indicators. 00:39.930 --> 00:48.310 You must first understand support and resistance in very simple terms support and resistance are essentially 00:48.400 --> 00:50.600 floors and ceilings in a market. 00:50.830 --> 00:57.620 They are price areas that tend to act as barriers to support in resistance concepts are developed based 00:57.620 --> 01:00.020 on a psychological basis. 01:00.020 --> 01:06.170 As traders we continually rely on what happened in the past and technical analysis because we see that 01:06.170 --> 01:10.350 the market patterns and interests repeat and repeat. 01:10.670 --> 01:16.280 This is no more than a reflection of human nature and the analysis we make of relative values which 01:16.280 --> 01:21.290 we tend to stick to until we're forced to make an adjustment by the actions of others. 01:21.380 --> 01:23.270 In this case via the market 01:26.410 --> 01:32.770 support is an area where traders found it attractive to buy previously or in other words it's the price 01:32.770 --> 01:37.930 level where traders thought that the price was so low and they could make a profit if they placed a 01:37.930 --> 01:44.510 long position and if it was attractive ones to buy in this area it may well be again. 01:44.890 --> 01:51.040 On the other hand resistance is an area where traders found it attractive to sell previously if it was 01:51.040 --> 01:53.350 attractive ones to sell in this area. 01:53.350 --> 01:57.190 It may well be again. 01:57.200 --> 02:01.190 So how can we trade support and resistance. 02:01.190 --> 02:08.090 Will consider buying or going long when the price breaks up through the resistance level and we'll consider 02:08.090 --> 02:14.930 selling or going short when the price breaks down through the support level and we'll keep holding when 02:14.960 --> 02:17.930 the price is between the support and resistance levels 02:20.900 --> 02:21.460 OK. 02:21.570 --> 02:27.110 Here's a quick example so you can understand clearly how support and resistance work. 02:27.110 --> 02:29.460 Now let's take a look at Bitcoins chart. 02:29.630 --> 02:35.720 Can you quickly point out where the support level is and where the resistance level is as you can see 02:35.720 --> 02:36.570 on the chart. 02:36.590 --> 02:45.230 We have a support level at around six thousand dollars in November 2017 Bitcoins price surged from 6000 02:45.290 --> 02:49.580 to over $19000 after hitting the new high. 02:49.660 --> 02:54.510 Its price went back down to the six thousand dollar level and bounced back up again. 02:55.330 --> 03:00.870 So we can easily know that is a support level at around six thousand dollars. 03:00.870 --> 03:07.780 Similarly we have a resistance level at around nineteen thousand seven hundred dollars the price failed 03:07.780 --> 03:12.830 to break up through this level and went back down to its previous lows. 03:12.840 --> 03:18.480 We also have a resistance level at around eleven thousand seven hundred dollars the price attempted 03:18.480 --> 03:23.820 to break up through this level many times but failed and went back down. 03:23.820 --> 03:29.610 So after doing a quick support and resistance analysis you can instantly know it may not be a good time 03:29.610 --> 03:31.730 to buy Bitcoin right now. 03:32.190 --> 03:38.310 As you can see its price can possibly drop to the support level at around $6000. 03:38.350 --> 03:44.470 So if you're looking to buy Bitcoin at this time you may want to wait until its price drops to $6000 03:44.740 --> 03:50.560 and bounces back up or wait until its price breaks up through the resistance level at around eleven 03:50.560 --> 03:52.480 thousand seven hundred dollars. 03:53.420 --> 03:58.980 In the next lecture I'll talk about risk management and teach you how to protect your profits.