Start with the chart, not the overlay
A moving average or RSI can be useful later. First, mark swing highs and lows. Ask whether price is making higher highs, lower lows, or moving sideways.
Three states to name
- Trend: swings move in one direction. Pullbacks are for planning, not for guessing the exact bottom.
- Range: highs and lows repeat. Breakout trades fail more often here.
- Transition: the last high or low is broken. This is where many people enter too early.
How this shows up in crypto
Crypto can stay in a range for days, then move in a few hours. If you treat every candle as a new trend, you will overtrade.
Practice on a higher timeframe first. Name the state. Then decide whether your playbook even has a setup for that state.
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