Skip to content

Module 04 — Technical analysis

Goal: read charts to decide WHEN to enter and exit. Honest warning: TA does not predict the future; it is a framework for managing probabilities and defining the levels where your thesis is invalidated (where the stop-loss goes). Without module 5, TA is useless.

🔊 Listen to this module (Spanish audio, 10 min 38 s)

Narrated version of the full module — perfect for reviewing while you do something else.

Tool: TradingView (a free account is enough).

1. Japanese candlesticks

Each candle summarizes the price over a period (1h, 4h, 1d...):

   │  ← upper wick (high)
  ┌┴┐
  │ │ ← body (open→close)
  └┬┘    green: close > open
   │     red:   close < open
   │  ← lower wick (low)
  • Large body = conviction. Long wicks = rejection of that level.
  • Useful patterns (don't memorize 50; these are enough): hammer (long lower wick after a drop = possible rejection of the floor), engulfing (a candle that swallows the previous one = possible reversal), doji (tiny body = indecision).
  • Context > pattern: a hammer at an important support means something; in the middle of nowhere, it means nothing.

2. Supports, resistances and trend

  • Support: zone where buying has historically appeared. Resistance: zone where selling appears.
  • They are zones, not exact lines. The more touches and the more volume, the more relevant they are.
  • A broken support turns into resistance (and vice versa) — flip.
  • Uptrend: rising highs and lows. Downtrend: falling ones. Range: sideways.
  • Beginner's golden rule: don't trade against the trend of the higher timeframe. If the daily is bearish, bounces on the 15m are traps.

3. Timeframes

  • 1d / 1w: the underlying trend and the important levels. Where a beginner should live.
  • 4h: timing your entries within the daily trend.
  • < 1h: noise for a beginner. Ignore it for the first year.

Analysis flow: weekly (context) → daily (trend and levels) → 4h (entry).

4. Indicators (few, and well understood)

Indicator What it measures Practical use
Moving averages (EMA 21/50/200) Average price; smooths out noise Price above the daily EMA200 = bullish context. Crossovers = regime changes (slow)
RSI (14) Speed of the move (0-100) >70 overbought, <30 oversold — BUT in a strong trend it can stay at an extreme for weeks. The most useful thing: divergences (price makes a new high, RSI doesn't → momentum running out)
Volume Conviction behind the move A breakout without volume = suspicious. A drop with huge volume after a long trend = possible capitulation
MACD Momentum of moving averages Confirmation of trend changes (lagging)

Classic anti-pattern: filling the chart with 8 indicators that say different things. Price + volume + EMAs + RSI is enough. Indicators are DERIVED from price; they don't add new information, they just present it differently.

5. Structure concepts that work in crypto

  • Breakout and retest: price breaks resistance, comes back to lean on it (now support) and continues. Entering on the retest = a better risk/reward ratio than chasing the breakout.
  • Fakeout / liquidity sweep: crypto is famous for breaking an obvious level, hunting the stops everyone placed there, and turning around. That's why stops don't go AT the level but beyond it, and entries wait for confirmation.
  • Confluence: a zone is worth more the more things line up at it (horizontal support + EMA200 + round psychological level).

6. What TA is NOT

  • It's not a crystal ball: it's scenario management. "If X holds, I look for Y; if X is lost, I get out" — that's a plan; "BTC is going to hit 200k" is an opinion.
  • In crypto, a piece of news (a hack, regulation, a bankruptcy) cuts through any support. TA won't protect you from that; position sizing will (module 5).
  • Beware the TA course sellers with the rented Lamborghini. If their method printed money, they wouldn't be selling courses.

Exercises (all on TradingView, BTC/USDT chart)

  1. On the daily, mark the 3 most relevant supports and 3 resistances of the last 2 years. Use zones (rectangles), not lines.
  2. Add the EMA 21, 50 and 200. Identify a period where price "respected" the daily EMA50 as dynamic support during a trend.
  3. Look for a bearish RSI divergence on the daily at any historic BTC peak. (Hint: almost every cycle top has one.)
  4. Find a successful breakout + retest and a fakeout. Note how they differed (volume, trend context).
  5. Write an analysis of the current BTC in notas/analisis-tecnico-btc.md: trend on weekly/daily, key levels above and below, and what scenario would invalidate each reading. Review it in 2 weeks.

Checkpoint ✅

  1. Why are supports and resistances zones and not exact prices?
  2. What is an RSI divergence and what does it suggest?
  3. What distinguishes a reliable breakout from a likely fakeout?
  4. Why shouldn't you trade against the higher timeframe?
  5. What can TA do for you and what can it NOT do?

→ Next: Module 05 — Risk management (the most important module of the course)