Bitcoin: Buy Zone But No Setup.
Bitcoin has rejected the 30K resistance area, as I warned about in my previous article, even though there WAS a buy signal there. Price is now fluctuating within the first relevant support AREA which means I am looking for swing trade setups to go LONG. This location fits my criteria in terms of probability and reward/risk but with NO setups confirmed, there is NO reason to justify assuming risk at the moment. IF price is going to confirm a signal, it is likely to do so in the next couple of days BUT IF no confirmation appears AND current momentum stays intact, a test of the 25K support may result.
Before I get into more explanation, just wanted to thank the Tradingview team and the community for recognizing me as a "wizard". With my newly acquired magical powers, I can now attempt to build a "magical oscillator" that can compete with all the other magical oscillators out there that no one makes any money with (except for the developers). Mine should work though because I'm a wizard!
Before I became a wizard, I actually built a trade scanner (not an oscillator) that has shown some very interesting results. In fact I shared an ETH trade idea that was generated a week ago, which offered some profit potential before it got stopped out. As I have been trying to tell people, the key to using this tool is knowing how to adjust to the risk by assessing the probabilities around the locations where it generates ideas. The ETH trade idea was generated around a notable resistance area (like BTC 30K). KNOWING THIS means you adjust expectations IF you should decide to take such a higher risk idea. The system is unable to recognize context, that is the part you need to be able to judge yourself. More about this on my next stream.
Using elements like price structure and levels can help you better estimate probabilities around particular price locations. These are the first two steps that I teach students and are the most important besides the confirmation step (step 6).
This is how I estimated the position of the swing trade buy zone on my BTC chart (blue square) weeks BEFORE. The 27K to 28K area has recent history in the form of a consolidation (look back a few weeks on chart). The fact that price is now in the vicinity of that consolidation structure while the over all price structure is still within a broader bullish trend increases the chances that at least one more test of the recent high is likely. This all has to do with the population of traders (order flow) that are caught short versus potential for new longs to enter the market upon a retrace within a bullish trend. In theory, price should attempt to go for a new high (33K) over the next week or so.
While this sounds encouraging, I have found it is BETTER to have a more conservative expectation (like retest of 30K area) because markets ARE highly RANDOM and things can change VERY QUICKLY. Especially when the bond market has not exactly been the most supportive of broad and sustainable market rallies.
IF Bitcoin can produce a complex reversal structure (like a mini double bottom) within the current buy zone, it will prompt me to share a new swing trade long idea. Otherwise there is nothing for me to do except watch (and wait for the scanner to call something).
Thank you for considering my analysis and perspective.
Before I get into more explanation, just wanted to thank the Tradingview team and the community for recognizing me as a "wizard". With my newly acquired magical powers, I can now attempt to build a "magical oscillator" that can compete with all the other magical oscillators out there that no one makes any money with (except for the developers). Mine should work though because I'm a wizard!
Before I became a wizard, I actually built a trade scanner (not an oscillator) that has shown some very interesting results. In fact I shared an ETH trade idea that was generated a week ago, which offered some profit potential before it got stopped out. As I have been trying to tell people, the key to using this tool is knowing how to adjust to the risk by assessing the probabilities around the locations where it generates ideas. The ETH trade idea was generated around a notable resistance area (like BTC 30K). KNOWING THIS means you adjust expectations IF you should decide to take such a higher risk idea. The system is unable to recognize context, that is the part you need to be able to judge yourself. More about this on my next stream.
Using elements like price structure and levels can help you better estimate probabilities around particular price locations. These are the first two steps that I teach students and are the most important besides the confirmation step (step 6).
This is how I estimated the position of the swing trade buy zone on my BTC chart (blue square) weeks BEFORE. The 27K to 28K area has recent history in the form of a consolidation (look back a few weeks on chart). The fact that price is now in the vicinity of that consolidation structure while the over all price structure is still within a broader bullish trend increases the chances that at least one more test of the recent high is likely. This all has to do with the population of traders (order flow) that are caught short versus potential for new longs to enter the market upon a retrace within a bullish trend. In theory, price should attempt to go for a new high (33K) over the next week or so.
While this sounds encouraging, I have found it is BETTER to have a more conservative expectation (like retest of 30K area) because markets ARE highly RANDOM and things can change VERY QUICKLY. Especially when the bond market has not exactly been the most supportive of broad and sustainable market rallies.
IF Bitcoin can produce a complex reversal structure (like a mini double bottom) within the current buy zone, it will prompt me to share a new swing trade long idea. Otherwise there is nothing for me to do except watch (and wait for the scanner to call something).
Thank you for considering my analysis and perspective.
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