Ethereum classic beginner’s guide

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Ethereum Classic Cryptocurrency Strategy, Fakeout – Shakeout Pattern

The Ethereum Classic cryptocurrency strategy brings to the surface an unorthodox reversal chart pattern. The Fakeout – Shakeout chart pattern occurs from buying and selling exhaustion, and they signal very accurate reversals signals in the Ethereum Classic price.

Our team at Trading Strategy Guides is working hard to put together the most comprehensive PDF guide to different cryptocurrency strategies. Previously, we covered the Siacoin Cryptocurrency Strategy the world’s biggest storage coin.

Ethereum classic is one of the most overlooked coins, and it remains an important digital asset with an active community. Compared to its big brother Ethereum, the Ethereum classic is entirely underpriced which is the reason why we have developed this Ethereum Classic beginner’s guide.

It’s important to mention that professional trader Linda Raschke has developed this reversal chart pattern. However, our team at Trading Strategy Guides has taken the Fakeout – Shakeout trading rules and made it into the ultimate reversal pattern that will stop you buying Ethereum Classic prematurely.

Now…

Moving forward, we’re going to discuss what is Ethereum Classic and how to buy ETC with our Ethereum Classic beginner’s guide.

What is Ethereum Classic Cryptocurrency?

Ethereum classic is a blockchain based computer network specializing in smart contract functionality. The Ethereum Classic ETC come into existence after a split within the Ethereum community, but they still remain technically quite similar projects.

At the time we wrote this Ehereum Classic review, this coin is the 17th cryptocurrency in the world with the total market cap of around $2.0 billion.

Ethereum classic cryptocurrency strategy

One of the best things that Ethereum Classic has going for it is the Ethereum brand recognition. However, to be fair, we believe that ETC provides value towards Ethereum and it’s a liquid cryptocurrency.

Now, before we go any further, we always recommend taking a piece of paper and a pen and note down the rules of the Ethereum Classic cryptocurrency strategy. For this demonstration, we’re going to look at the buy side.

Ethereum Classic Cryptocurrency Strategy

The real beauty of this reversal trading strategy is that it offers you:

  • Precise rules when to buy Ethereum Classic.
  • Distinctive risk levels where to hide your protective stop loss.
  • And accurate exit points to maximize your cryptocurrency profits.

In the beginning, it might require you to study more this reversal chart pattern so you can become better at recognizing the Fakeout – Shakeout pattern. You can become a trader expert if you devote enough time to study and understand this reversal pattern.

As a general rule, this pattern does set up in any market (Forex currency, commodity, stocks, ETF, cryptocurrency) on any time frames.

If you ever asked yourself how the smart money is trading the cryptocurrency market, then the Ethereum Classic cryptocurrency strategy is the answer to your question.

Without further ado, this is the step by step guide to trading Ethereum Classic using the best reversal pattern.

Step #1: Identify a clear trading range zone followed by a breakout below the support level.

The principal idea behind the Fakeout – Shakeout reversal pattern is that we’re looking for an area of consolidation or range trading followed by a false breakout that is QUICKLY bought by the institutional money.

A trading range is defined by price moving back and forth between clear support and resistance levels.

The Ethereum Classic chart below highlights the first part of the Fakeout – Shakeout pattern.

Ethereum classic chart

A valid Fakeout only needs enough bearish momentum so we can break below the trading range.

Now, we’re going to move outline the characteristics of the second element of the Fakeout – Shake out reversal pattern.

Step #2: Identify the starting point of the Fakeout movement.

What we’re looking to do next is to just wait for the sell off to fail.

The way we’re going to know that this is a false breakout is if the market starts recovering and breaking above the starting point of the sell-off.

Simply, mark on the Ethereum Classic chart the bearish candle that started the sell off. It doesn’t necessarily have to be the first bearish candle. What we look for is for the most prominent bearish candle within the downward movement.

Ethereum classic chart

The critical thing to watch is for the Ethereum Classic price to recover fast and not spend too much time on the downside.

Note* The stronger and faster the recovery happens, the stronger the reversal pattern becomes.

A legitimate breakout should not retrace so deep. If it does, according to our amazing reversal pattern, it signals that this was a false breakout and a bear trap.

The Fakeout – Shakeout reversal pattern satisfies both of our trading conditions which mean that we can move forward and outline what the trigger condition for our Ethereum classic cryptocurrency strategy.

See below:

Step #3: Place a limit buy order above the candle’s high identified at Step #2

The best entry technique to use when purchasing Ethereum Classic is to closely monitor the charts right when the expected reversal is occurring. You must focus first on identifying the starting point of the fakeout movement.

The fakeout movement is designed to fool traders into believing the market will go down when the real intention of the smart money is to really move the market up.

This type of fakeouts happens all the time in any market and on all time frames.

ethereum classic value

The above Ethereum Classic chart outlines our entry.

This entry strategy has only a very small window of opportunity, so you want to make sure you’re ready to pull the trigger when the trade signals show up.

We refer to this recovery as the Shakeout phase. The sellers who got caught on the wrong foot and got tricked are about to be taken out, which in turn will fuel more the upside.

The next important thing we need to establish for the Ethereum classic beginner’s guide is where to place our protective stop loss.

See below …

Step #4: Place your protective Stop Loss below the “Fakeout low”

You also need to concentrate on seeing the logical places where to hide your protective stop loss.

Trading without a stop loss is a receipt for disaster, so always use an SL.

The initial stop loss is placed at the swing low developed during the Fakeout – Shakeout phase.

ethereum classic future

Last but not least, we also need to define where we take profit when trading Ethereum Classic ETC.

See below …

Step #5: Take Profits when the bullish momentum fades away

The easiest way to take profits is to wait until the rally starts losing the bullish momentum.

The simplest way to gauge when the bullish momentum fades away, is when the price either starts to consolidate again or when big bold bearish candle start to develop on the Ethereum Classic chart.

Ethereum classic cryptocurrency strategy

Alternatively, you can trail your stop loss and enjoy the opportunity to potentially make bigger cryptocurrency profits. You have to monitor new swing low points as they are formed and then just trail your protective stop loss below these swing points.

Note** the above was an example of a BUY trade using the Ethereum Classic beginner’s guide. Use the same rules for a SELL trade – but in reverse. In the figure below, you can see an actual SELL trade example.

Ethereum classic trading strategy

Conclusion – Ethereum Classic Beginner’s Guide

To summarize Ethereum classic ETC is just the old blockchain of the original Ethereum that has its own cryptocurrency. Ethereum classic has also got a lot of recognition by being backed by the big players, so it’s worth to give it a place in your cryptocurrency portfolio. You can also trade with the Gartley Pattern trading strategy.

Many of our team members are from the old school of naked chart trading, and they have found this reversal chart pattern to produce spectacular trading opportunities. However, you still need to be nimble to avoid runaway markets because even this reversal pattern can reverse any time!

Thank you for reading!

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