Bitcoin Price Action 1-2-3 method in the Bitcoin Market

Bitcoin Price action is the use of only charts to trade Bitcoin, without the use of technical chart technical indicators. When trading with this method, candle charts are used. This strategy uses lines and predetermined patterns such as 1-2-3 pattern that either develops or series of bars.

Traders use this strategy because this analysis is very objective and allows the one to analyze the btcusd trading market moves based on what they see on the charts and market movement analysis alone.

This strategy is used by many traders: even those who use technical indicators also integrate some form of price action in their strategy.

The best use of this method is achieved when the signals generated are combined with line studies so as to provide extra confirmation. These line studies include trend lines, Fibo retracement, support & resistance areas.

Bitcoin Price Action 1-2-3 Breakout

This strategy uses three chart points to determine the break out direction of bitcoin crypto. 1-2-3 technique uses a peak & a trough, these points forms point 1 & point 2, if market moves above the peak the signal is long, if it moves below the trough the signal is to short. Break-out of point 1 or point 2 forms the third point.

Series of breakouts on Bitcoin Chart

Investors use price action to try & predict where a trend direction might go. The cryptocurrency market is either trending or ranging.

A trending market moves in a particular direction while a range market moves sideways, normally after getting to a support or resistance level.

Observing the behavior of price action provides this information of whether the btcusd market is trending or ranging or reversing its direction.

As with any other Bitcoin strategy this method should also be combined with other confirming indicators to avoid whipsaws. The 1-2-3 pattern can give good signals in a trending market but will give whipsaws when the btcusd trading market is ranging, it is better to determine if the btcusd market is trending or not before you begin using this strategy.

Combining This Strategy with other Technical Indicators

Good technical indicators to combine with are:

• RSI

• Moving Average Technical Indicator

Investors should use these two indicators to confirm if the direction of break out is in line with the trend direction shown by these two indicators. If the direction is also the same as those of these indicators then investors can open a trade in direction of the signal. If not investors should not open a trade as there is more likely a chance that this signal may be a bitcoin trading whipsaw.

Just like any other indicator in Bitcoin Trading, price action also has whipsaws and there a requirement to use this as a combination with other signal as opposed to just using this strategy alone.

Combining with other Indicators - RSI & Moving Averages