IOTA double top

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IOTA Cryptocurrency Strategy – Busted Double Top Pattern

A good trading method uses advanced price action techniques. Our IOTA cryptocurrency strategy incorporates clever trading tricks used by the big sharks in the market. The busted double top pattern is a fading method to trade the classic double top pattern.

Our team at Trading Strategy Guides is working to put together a comprehensive PDF guide of different cryptocurrency strategies. Previously, we covered Dogecoin cryptocurrency strategy. It is suitable for microtransactions and to send little gifts. More importantly, it outlines one of the most powerful short-term patterns.

The double top pattern is a bearish reversal trading pattern that emerges at the end of a bullish trend. This means the double top pattern generates a sell signal.

However, the busted double top pattern is a reversed pattern that generates a buy signal. In essence, we’re going to fade the double top pattern. Some specific trading rules need to be satisfied first for a valid trade signal.

There is a lot of psychology behind the busted double top pattern. We’re going to reveal it in the following sections.

Moving forward, we’re going to explain what IOTA is and cover key IOTA features. Last but not least, this cryptocurrency trading PDF will outline a method on how to buy IOTA. We also have training on how to use currency strength for trading success.

What is IOTA coin? A Beginner’s Guide

IOTA is a third-generation cryptocurrency and an abbreviation for 'Internet of Things Application'. Unlike most other digital currencies, IOTA doesn’t use the blockchain technology. Instead, it uses a new technology called the Tangle.

The key IOTA features are fast transactions and more importantly have no fees.

The primary objective of IOTA is to facilitate transactions between devices on the Internet of Things (IoT).

This June 2018 cryptocurrency trading PDF, shows that IOTA was among the top 10 cryptocurrencies in 2018 with a market cap over $2.7 billion.

IOTA cryptocurrency strategy

To create new Bitcoins, we must use "miners." IOTA removed the need for miners, which is why there are no fees associated.

Now, before we go any further, we always recommend taking a piece of paper and a pen to write the rules of the best IOTA trading strategy.

In this demonstration, we’re going to look at the buy side.

Best IOTA Trading Strategy

The double top is a powerful bearish reversal pattern if it develops at the right location. However, when double tops show up at the wrong location, that’s when the busted double top setup gives us the opportunity of making money trading.

The double top pattern is the clearest and obvious technical chart pattern when it comes to providing a place to hide your stop loss. The obvious place retail traders place the stop loss is above the double top pattern.

cryptocurrency trading PDF

The busted double top setup takes advantage of this market psychology.

How?

Well, the big sharks and smart money are always in search of market liquidity, so that they could execute their big orders at a decent price. In this regard, they will always target those technical levels that gather a big cluster of stop orders. Also, read about Personality Strengths and Weakness in Forex Trading.

This is also known as stop hunting.

To be able to benefit yourself from the stop hunting that goes on the market, you can use the busted double top pattern.

Like with all our trading strategies we’re going to give you first the trading rules by going through an actual live trade example.

Step #1: Wait until a Double Top pattern is developing on IOTA chart

Identifying a price chart pattern is a skill anyone can learn. The more time you spend in front of the charts the better you’ll become at recognizing these money maker patterns.

The busted double top trade setup starts with a double top chart pattern.

Retail traders like to use these clear technical levels, like the one offered by the double top pattern to hide their stop losses. That’s the reason why these technical levels act as a magnet for smart money.

best IOTA trading strategy

When a double top pattern develops on the IOTA chart, we’re given three points of reference. Two peaks noted with A and B, and a valley created by the sell-off from peak A, which we noted with C.

Let’s move forward and outline the next essential feature of the best IOTA trading strategy.

Step #2: Wait for the price to break downwards and drop below point C

The textbook double top pattern is only valid after the IOTA price breaks and closes below the first valley noted with letter C.

The busted double top pattern requires the IOTA price not to fall much further after we break below point C. This is very important to the validity of the busted double top pattern; otherwise, this might be a legitimate double top pattern.

IOTA cryptocurrency strategy

The reversal pattern needs to satisfy one more condition before we can outline our entry strategy.

See below:

Step #3: IOTA price needs to consolidate below point C

Additionally, to price not falling much below point C, the IOTA price needs to consolidate or move in between a narrow range below point C.

When we break below point C that’s when retail traders will short the double top pattern. During this consolidation, more sell orders will pour into the market.

Remember, that ultimately, we try to fade the retail traders and hunt for their stop loss.

iota ama

At this point, we still don’t know for sure if this is a reversal and if the double top pattern will work or not.

This brings us to the last trading condition which is also our trigger for the entry strategy and how to buy IOTA.

See below:

Step #4: How to buy IOTA: Buy after we break and close above the C point

Most of the time, a valid double top pattern will not allow for the price to close back above point C. When we do break and close above point C, then we can safely assume the smart money is targeting the stops above the double top pattern.

We buy IOTA as soon as we close above point C.

*Note: The clearer the breakout is the higher the probability the busted double top pattern will work.

IOTA trading strategy

This brings us to the next important step that we need to establish for the IOTA cryptocurrency strategy, which is where to place our protective stop loss.

See below:

Step #5: Place your protective Stop Loss below the trading range spotted earlier

No matter how confident you are about any trading setup; make sure you use a protective stop loss. Risk management should be your number one priority when trading the markets.

The busted double top pattern can provide us with a good level to maintain a very tight stop loss. The key benefit is that this will result in a very attractive risk to reward ratio.

Simply hide your protective stop loss below the trading range identified at Step #3.

why is iota rising

Last but not least, we need to define where we take profits when trading digital coin IOTA.

See below:

Step #6: Take profits during the first 5 – 15 minutes after we break above the double top pattern.

Once we close back above point C, the probabilities of a stop hunt increase. We now know that the smart money is at work and willing to target those stops crowded above the double top pattern.

The busted double top pattern is completed once we break above the double top.

Depending on how much momentum we have behind the breakout, we want to take profits as soon as possible, preferably during the first 15 minutes after the breakout.

Once the stop orders above the double top are hit, there is a high chance of reversal even though (at times) the IOTA price might continue to grow higher.

cryptocurrency IOTA

**Note: The above was an example of a BUY trade using the best IOTA trading strategy. Use the same rules for a SELL trade – but in reverse. In the figure below, you can see an actual SELL trade example.

Cryptocurrency trading strategy

Conclusion – Cryptocurrency Trading PDF

Digital coin IOTA is 100% fee free crypto alternative that deserves a place in your cryptocurrency portfolio. We want you to be the best trader you can be, and this stop hunting technique can help you achieve your financial goals. You can also trade with the Gartley pattern.

The trading tricks outlined by the best IOTA trading strategy are general untold truths that you can apply in any market. To be able to stop hunting, you need to understand how the retail mindset works. Once you do that, a new horizon of trading opportunities will open up to you.

Thank you for reading!

Please leave a comment below if you have any questions about this cryptocurrency trading PDF!

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