Long

BTCUSD LONG SETUP - 24/03/2018

Updated

Because of marginal new low at 8,265.00 that did not make a new low in RSI, I propose end of cycle from 9,188.10 at 8,342.00 with a FLAT that brought bitcoin to retest 9,000.00 mark but should fail to take out 9,188.10. So, if a marginal new high cannot be ruled out, I expect bitcoin to turn lower to break below 8,342.00 to equal leg area at 8,137.83-7,938.15.
Invalidation level to the upside is 7,325.37 for short-term, otherwise, 5,920.72 remains the main pivot in higher time frame.

Buy 8,137.83 stop 7,325.37

Note

Last marginal new high completed the 5th wave of third leg of the FLAT with RSI divergence (I have opted for truncated 5th wave on the graph).
From 9,020.00, we are now in the third leg of the cycle and we should be heading below 8,432 en route to our buy order.

Note

Closing to Entry. Count has been change to a double correction (and not zigzag as proposed in the graph).
red -1- at per chart
red -2- at 9,020.00
So need a 3 waves down from 9.020.00. Internal structure (green count) projects 8,082.63-7,874.91 but I will stick to 8,173.90-7,974.22 from the cycle of higher degree

Trade active

Equal leg area reached and Entry triggered. We should see a bit more downside at the moment of the comment for bitcoin

Note

Looks like we have a reaction here. bitcoin followed perfectly the count amended and provided to patrons - . 2 entries were given at 8,173.90 and 8,028.63. Cycle ended at 27/03/2018 high and I will expect a 3 waves bounce from here to challenge 9,188.10 for a break and a bullish sequence in 1h time frame.
Will keep you posted on this one. Can always check my patreon site for more chart on BTCUSD.

Note

Marginal new low would mean that red -1- -2- -3- is not WXY in normal EW labeling but ABC with 5 waves down with RSI divergence from 9,020.00. Does not really matter on the 4h chart but if not in trade, I would not join from current level because FLAT can extend and pressure is bearish.

Note

Still in the trade, even though in the red ever since.
Called the cycle ended at 7,723.03 low. As long as above this level but more importantly 7,325.37, well we should go higher in at least a 3 waves bounce to challenge 9,188.00.
Will not force it it breaks down. Stop are set for a reason.

Note

marginal new low again. Does not change anything as long as above 7,325.37 and RSI divergence in place in 1h time frame.
Weak stops are being wiped out. Too many longs still ... If everybody is already holding buying position, nobody to buy again, so price is heavy...

Note

7,325.37 is close. Now, 15min RSI divergence as well, so a bounce should happen.

If not, then the conditions would changed and the count be modified but the view would remain the same: in 4h chart we would have a FLAT from green 3 at 7,682 to 9,188,10 as green 4 (where is our green 1 from the count going to the upside) and we would be in green 5 to complete red 3 and purple 2).

True invalidation level for now is 5,920.72 as explained to patrons on Discord server.

Trade closed: stop reached

As expected yesterday, I got stopped out.
Explanation given on the Discord to patrons just after it happened:

ANALYSIS
See also in the training room for 15min charts where I will analyze what happened
Now, first and foremost, we knew that there was no bullish sequence in 4h and the idea of the trade was based on the daily view. Second, after the first trade, we knew the risk of the double correction to turn into a FLAT or Triple. This is why stop was tight so that we do not drag a losing position and the financial risk was low. So the account should not be hurt here.
Retrospectively, the setup was right at the level and time we took it, entering lower and later did not make any sense as the structure was developing.

LESSON LEARNED
Market makes the price and not the chart. The right side of the market is to the upside until 5,920.72 is broken. We have to be patient and we will make an easy 10%-20% profit in next trades.
When the 1h time frame is very bearish as it has been and 4h neutral, we are actually picking tops/bottoms with counter-trend. Now, as per my theory we are always counter-trend of the higher degree, what matters is that we are aligned with the degree that gives us the direction: for me and my system (you can have yours) is 4h aligned with daily and execution in 1h which by definition will be counter-shorter trend.
Market is very uncertain but still massively long (people holding on to their position). When there is nobody to buy anymore in a market, this market goes to the downside.
Now, should we have been short? I stick to my point and say NO. Only after the fact, we can say "why did i not short 11,780.00 that made so much sense". If thinking that, you are wrong, that made no sense to call short there. Now if we hold 5,920.72 and go higher, all those people short from 11,780.00, where do they take profit? They have been picking tops, and it is a matter of when not if they gonna start losing big money. This is only my opinion. And "we agree to disagree" (French quote)
Charts will follow to demonstrate my point."

The_202_Quants

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