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Hello and welcome to Cryptocurrency Trading Masterclass by Unwealthy Education.
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In this video, we kick off Module one profitable crypto trading setups.
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This particular video is must know trading terminology.
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Now, before we can get into trading, we have to make sure that we are speaking the same language.
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So let's go through some very basic terminology.
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Therefore, we're.
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Able to have the conversation and talk about various strategies and ways to trade the crypto market,
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so the.
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Terms that I'm going to show and talk about here are not only Kryptos specific, but they're going to
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be used in any financial market.
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So if you decide to trade stocks or forex later, commodities, whatever, these will all be relevant
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there as well.
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There are some very basic terms which are pretty straightforward.
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So, for example.
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One would be the 52 week high and the 52 week low.
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So it's exactly what it sounds like.
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So during the year twenty twenty, which was here to hear.
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The 52 week low was the lowest price during that year, the 52 week high was the highest price, so
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it was just a little under forty two thousand.
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And the 52 week low was down here at about roughly 3500, so that's pretty straightforward.
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And that, of course, is not necessarily it doesn't necessarily have to be over the last year.
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It could be just over the last fifty two candlesticks.
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In this case, though, it would still be the same.
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We're only a few candlesticks into a 20 21 as I record this, the low, the high there at the same spot.
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So basically over the last year.
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The highest and lowest prices found pretty straightforward.
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There's also the bid ask close and high.
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So the bid is what people are willing to pay for an asset.
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So you are bidding to buy it, and in this case, if you are bidding.
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You come in with a price and I'm going to use very simple numbers.
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Let's just say you're bidding five for an asset.
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There's an ask.
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Which is what they are willing to sell this asset for, and that asset might be five and a half.
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Well, in order for a transaction to be made, two people have to agree on a price.
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Sometimes they'll come back and forth to each other, so they may sell at five and a quarter.
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But more often than not, you'll hear a phrase, something like hitting the bed or paying the aske,
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so if you are the buyer and you really want this asset, you're going to come up here and pay five dollars
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and 50 cents for it for five and a half for it.
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And you're paying the ask if you are the seller and you're aggressively wanting to sell.
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You might do what they call hit the bid, so you would sell it at five.
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So the bid is just simply what you could buy it for.
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Ask is what you can sell it for.
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And here on Trading View, you can click on the watch list and you can see there is pricing here and
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notice how the prices aren't quite the same.
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And that's because there's a bid and an ask.
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And it's true with all markets.
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It's not just Bitcoin.
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It's just happened to be the one that I have highlighted here.
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You could.
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Come to the DAX or the Nikkei or whatever, so that is always going to be the case.
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Sometimes you see zero spread.
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That's pretty rare, though.
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The reality is that's what makes a market.
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People either have to step up to buy it or step down to sell it.
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There is an uptrend or what is known as a bull market, and that is clearly an uptrend, we are rising,
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we are going higher.
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That's an uptrend.
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There is a downtrend.
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So.
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In twenty eighteen, when Bitcoin got to be so overbought and then sold off, that's a downtrend.
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It's also known as a bear trend.
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So bull is a bear is down.
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There's, of course, sideways, which is.
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Really, what it sounds like, it's just the market going sideways.
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A lot of times people refer to that as.
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Consolidation, so let me go ahead and go to a lower timeframe.
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Let's go to a daily chart.
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So we've had a bull run or an uptrend, and then we just kind of go sideways or sideways, consolidation
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is kind of the same thing really.
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It's just essentially that the market had been rallying, had been bullish, been an uptrend, and then
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you spend a little bit of time consolidating your gains.
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Now you can go up or down, but when you go up, that's a continuation of pretty basic stuff here.
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But these are things that people need to know.
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So rally consolidation, continuation, there is a couple of phrases.
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Swing high and swing low.
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So let me go to the hourly chart.
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So a swing high means that the market swung high and then turned away from it so that your swing high,
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just as this was a swing high back then, this is a swing low.
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High, low, high swing, low start to rally.
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These are useful to identify trends.
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There's high, there's a low, there's a higher high, there's a lower low, so that is an uptrend.
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Granted, it's not always going higher.
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But when you extrapolate this out to say like a daily chart.
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Weekly chart, it begins to look more like this.
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There is also.
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A phrase known as a bounce, so a bounce typically happens after a significant sell off.
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So right here, you can see that it sold off and then it bounced up a little bit.
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That would be the exact opposite of something called a pullback or a pullback, is what it sounds like.
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We pull back from the trend and continue.
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These are healthy and they're very common.
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It's just the way of.
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The way markets move, you can't go directly from point A to point B without having some people stepping
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out or selling or whatever, there's a million reasons why somebody gets in and out of a market.
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There is the phrase go long, that means buying short means you're selling.
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So.
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Up here at the swing high, you might want to short bitcoin as we break down from there.
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Just as when you are consolidating.
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So.
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We rallied and we're consolidating here.
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Now you're continuing on this breakout, and that's what it is called when you break out of consolidation,
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you might want to go long.
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There are two phrases known as averaging up and averaging down.
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These are pretty popular in the stock market.
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So really.
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As a general word of advice, you really don't want to average down, so averaging up is if you say
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buy it here.
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And it continues to go.
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You make a short term swing high, swing low, you break above the swing high, you decide to buy more,
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that's averaging up.
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You go higher, you buy more here for whatever reason that's averaging up, that is adding to position
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that's working, though unfortunately and this probably comes more from retirement account and longer
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term stock market advice, there is something known it's averaging down.
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So let's say that you are involved in Bitcoin here and everything is going fine and then suddenly it
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pulls back.
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You buy a little bit more here.
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It falls again.
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You think, OK, well, I'll buy a little bit more here, a little bit more here.
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Now, what this does in theory, at least.
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It's the same thing is dollar cost averaging, you'll hear financial advisers talk about that, well,
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if you buy at 10 and you buy again and.
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Five, and you buy again at one, well, every time you buy at a lower level, it brings down the average
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price of all three entries from 10, in this case seven fifty.
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And in this case, it would be somewhere near like three ish.
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Maybe for somewhere between three and four, that's because maybe you have.
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One, for example, one Bitcoin, and of course, these aren't real numbers, but if you buy one Bitcoin
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at twenty dollars, for example, and you buy another Bitcoin and.
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Ten dollars.
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Well, that's the same thing as having two bitcoins at a base, prices are based on price.
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Of 15.
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As the markets move, for example.
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At fifteen dollars, this would be five dollars positive, this would be five dollars negative, and
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it becomes a wash at your cost basis.
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The idea is that if you average down, then you can bring that cost basis down.
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Now, the problem with this is.
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Sooner or later, you're going to average down and the market's going to keep going lower, so if you
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average there and there and there and maybe there, you think, OK, it's going to recover.
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And then there again and there again, you know, the market may not go to zero, but your account may
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be blown, in other words, wiped out before it recovers.
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So averaging down never a good strategy.
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Unfortunately, a lot of people do it.
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It's part of human psychology.
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You're trying to make your position more profitable at a lower level.
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It can be like a retirement investment strategy if you're going to buy like stock that you're going
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to hang on to for 30 years, that's a different scenario.
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But in crypto, that's not what you're doing.
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So those are some very basic terminology that you'll need.
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No, I encourage you to watch this video again, go through all of this, and then we will move forward
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in our journey together.
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In the next video, we're going to take a look at the best chart time frames for crypto trading.
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