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Bullishmomentum

LTCUSD: Retrace To 186 Offers Next Buying Opportunity?LTCUSD update: Bearish trend line was cleared in a decisive move higher which lead this market to just under the 231 to 265 resistance zone. The next step is to add on the retrace. I have been writing about the clear reversal formations for weeks in the major coin markets. Of the three that I evaluate, this one had the clearest bullish signal which I highlighted in an update to my previous LTC report. This was the double bottom in the 118 area and was followed by the anticipated higher low, and you can now see the result. You want to be positioning yourself for these type of dramatic reactions, not jump in when it becomes obvious.This is why understanding your own risk tolerance is important, otherwise you will not have the confidence to enter when the most attractive reward/risk opportunities present themselves. The best time to buy is NOT obvious. Now that this market has proven that bullish momentum is in effect, my objective is to add to my position trade long on pull backs. The next pullback I am watching for is the 186 level which is now the .382 of the recent bullish swing. This level also coincides with the newly established bullish trend line. IF price manages to offer this opportunity, I need to then see some variety of a bullish reversal signal such as a pin bar or other type of pattern. Once in place, a swing trade and position trade opportunity will be presented. Why is a swing and position trade opportunity available at the same time? It is all relative to location. A pull back to the bullish trend line also happens to be overlapping with the large magnitude support zone of the 186 to 138 area (.618 of recent broader bull run). Trades off of this level offer attractive positioning for a broader move that can works its way back toward the highs over time. While at the same time, a swing trade can be taken that offers a shorter term opportunity with defined risk and a reasonable target range within the 231 to 265 area. If I think it's going back to the highs over time, why get out earlier? It is all dependent on your outlook and the risk you are willing to take. Also not all levels offer these type of opportunities. As the market goes higher, I will want to buy less for position trading and more for swing trading which keeps my risk in line with my tolerance. Swing trading is a lower risk strategy because you are in the market less time and take profits sooner compared to a broad position trade. In summary, if you find yourself feeling impulsive and anxious because you missed out on the earlier entries of this move, do not give in to the greed and fear of missing out, that is what the herd is for. Getting in the habit of looking ahead will separate you from the impulsive mindset and allow you to anticipate and position yourself to capitalize on the next reaction. In this case it is a simple pullback to the next support. At the same time, you must be mindful of risk because what if price falls through the support? IF that happens, the market would be telling us that it is range bound rather than bullish which will require an adjustment to the short term outlook and expectations. Price may only present a shallow retrace, which requires a more bullish adjustment. Having predetermined scenarios helps you prepare for and capitalize on market opportunities when they are not obvious, The herd cannot see beyond the scenario in front of them, while the experienced speculator is open to a multitude of possibilities and prepared for each one. Impulses steer you into the herd, the first step to avoiding that is becoming aware. Questions and comments welcome.
BITFINEX:LTCUSD
by MarcPMarkets
9
BTCUSD: Resistance Zone Is First Profit Opportunity?BTCUSD update: Bullish momentum is in effect as price reaches the 9887 to 10836 resistance zone, coming off of the recent higher low formation. This is where the herd begins to get excited, and also where the first profit target should be considered for swing trades. On 2/11/18 I highlighted a swing trade that triggered on the break of the 8570 candle high (I got filled at 8690, it's in the report). I am holding for a broader move, but for those who were more interested in a swing trade (short term move, defined stop and target), the first target area is about 650 points away. The 9887 to 10836 is the first resistance zone (.618 of recent bearish swing), that is being tested since the sell off. The swing trade target that I highlighted is the 10500 level which is basically in the middle of the zone. Why sell if this market still has a lot of room to run? This is the first level to consider locking in SOME profit, not your entire position. IF you got long around the 8690 level, you are up almost 1200 points at the moment. and at 10,500 you would be up 1800. Not bad for 5 days, so why not lock some in? It reduces risk and allows you to outperform the buy and hold strategy in an environment that is not the most stable. Remember the herd mentality. When markets start breaking resistances and pushing highs, the crowd reacts. This type of reaction, which is now in the form of strength is an opportunity for those who were able to anticipate this move to sell into strength. This is a best practice and the only obstacle in your way is greed. What about the bigger picture trade though? This is where your perspective, outlook and risk tolerance come into play. The positions that I built as this market bottomed were part of a position trade. I did not use any stops or targets because my outlook is anticipating the broader trend to reassert itself. For my trade, that scenario would be confirmed upon the break of the bearish trend line that was established in January. This would put price around the 12K area. As I hold out for these possibilities, I am taking more risk. The market can turn back at any moment and retest the 8Ks or even lower IF this market goes into a range bound scenario. So with that said, for my position trade, I intend to lock in SOME profit IF we reach the trend line and get a bearish reversal candle. If on the other hand, price blows through, then there is no reason to sell until the next resistance takes hold which can be in the high 13Ks. If I am going to lock in some profit, I at least want to make sure I have given the market a chance to maximize it. Another way to do this is to use a manual trailing stop which you place at the low of the previous candle. This is a good technique for when you have reached an acceptable profit target, and there is no reason to sell. Just trail the stop and let the market take you out. In summary, hopefully from the series of my previous reports, you can piece together the process that I covered to build my long position trade in this market. Now that we are at a resistance, I have the luxury I deciding if I want to lock in some profit or hold to see if my bigger picture anticipation plays out. The key point is: from start to finish I have been following a plan and NOT reacting to anything. At the current resistance area, best practices tell me that this is an area to consider locking in profit, and NOT buying. If you missed all the buying opportunities that I have been writing about, and you buy now, you are taking much greater risk and buying into a resistance level. This area is an opportunity for people who want to lock in some profit, not initiate new positions. A break of the current bullish trend line will negate this momentum, so be mindful of that and manage your risk carefully. Otherwise, besides locking some in, the other best practice is let winners run. That is my plan until broader resistance levels are in play. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
27
LTCUSD: Support Holding. Watch Formations, Trend Line Break.LTCUSD update: Since the pre Senate hearings sell off, this market has found support at the 118 level and has formed a double bottom. At the moment, price is retracing along with the other major coins, but in the face of a double bottom, it is reasonable to anticipate a higher low which offers a new buying opportunity. I wrote about the 118 level recently and that level serves as the lower boundary of the reversal zone. If price is going to fake everyone out, it is most likely to happen in this zone which is basically an extension of the recent low. Price did just that. It went slightly lower, but the long wick indicates that the lower prices were rejected quickly. The market is showing that the 106 area is where the most buyers buy. In order for the reversal zone to be void, price needs to close below it. Breaking below and forming a wick is not a break with conviction. Buying into the second low is not easy to do, and if you missed it, don't worry because there is another opportunity to buy into this market at attractive prices. Often when a market is transitioning out of a trend, it is a process, not a single event. In this case, the next part of the process that would offer another chance to buy is the higher low formation. Keep in mind the the 186 to 138 area is a .618 support zone relevant to the largest bullish structure. IF this market is going to find support and bounce, this is the zone where it is more likely for that process to unfold. What needs to happen next in order to confirm the higher low is a bullish candle formation or strong close combination. For example IF the current candle closes in its present configuration (pin bar) and the next candle breaks above the high, that is a bullish confirmation and trigger to go long. Further confirmation would be the break of the bearish trend line that originates from the recent highs. Especially if this break coincides with a compromise of the recent peak in the 169 area. What will negate this scenario is if price closes weak. If BTC retests its lows, this market is likely to follow. Any retest and bullish reversal off the 118 level is another buying opportunity as well. Keep in mind the time horizon that I am evaluating is for position trading and possible swing trading. This means even though the most immediate movement may be bearish, I am anticipating it can turn in order to be in line with the bigger picture and NOT react to the noise. In summary, like I always say, it's not about being "right", it is about listening and adjusting. Since I can only play one side of the market, and since my long term outlook is bullish, I am only interested in positioning for a broader rally which takes time to unfold. Buying in this zone is still attractive, but you must consider the risk which can be evaluated from the 106 low. The best way to participate in a broader rally is to build a position incrementally, so that you are immune to gyrations or selling spikes. Once the market confirms strength is returning, not only are you in a good position, but then you can add to a winner which is a more conservative position building strategy. Focus on the risks, know your personal loss limit and use these internal reference points to structure how aggressive or conservative you want to be. In this game, you make the rules that govern your actions, not outside forces like the market. Questions and comments welcome.
BITFINEX:LTCUSD
by MarcPMarkets
12
BTCUSD: Higher Low Implies Strength. 10,500 Area Within Range?BTCUSD update: Higher low formation still intact while price is attempting to break the 9047 previous peak. This swing high break is the first sign of bigger picture confirmation of strength since early January. The next anticipated resistance is the 9887 to 10836 zone. Higher lows often lead to higher highs and that is the formation that is unfolding at the moment. Since the 8427 resistance break, I wrote about how it was more likely to see this rather than a new low. What makes this reversal pattern even more compelling is that fact that is came out of a major support zone that I have been emphasizing for weeks now. I am adding one more unit and got filled at 8854.66 which now brings my average price to 10,020. Why am I adding? My original plan was to stick with what I had while the market worked its way higher. This exception is based on the solid technical signal, and the mindset that if the risk is much lower, it is better to be more aggressive now compared to a less certain condition. This is where knowing your risk tolerance and what you are willing to lose comes into play. I am not taking a dramatic risk, and market conditions are now much more favorable, why not push while the pushing is good? Keep in mind this new portion is for my position trade which means I am planning to hold it, even if the market decides to retest lows. I am accepting that risk now. Can this be a swing trade? If you use the 8500 level as a point of reference for your risk, and the 10,500 area as your target you are looking at reward/risk of about 2:1 which is favorable. Another technical point to consider is the new bullish trend line that is still intact. As long as price can maintain this momentum, the 9887 to 10836 zone (.618 of recent bearish swing) is a reasonable expectation. The confirmation of this oncoming strength would be the break of the 9074 high which can lead to some short covering price action that has not been seen in recent weeks (see LTC for a nice example of this). What can negate this is a break of the swing low at 7851. IF this bearish scenario takes hold, I am anticipating more of a broader range bound market rather than new lows because of the magnitude of the current support zone (8171 to 4983 which is the .618 area of entire bullish structure) and the fact that we took out the trend resistance of 8427. In summary, professional speculators are flexible and adjust based on what the market throws at them. I continuously read on other forums the frustrations or complaints of participants because the analysts they are following "keep hedging their signals". If scenario A happens then expect this, but if scenario B happens then expect that. Those who are less experienced have not learned yet that markets cannot be "predicted" with 100% certainty, only estimated with weighted probabilities. You must be open and flexible to multiple scenarios, and more importantly consider the risks of the adverse ones. That is the nature of speculation whether you are day trading or investing and the sooner you accept the flexibility mindset the sooner you will be prepared for the market. In my case, I am working from a broad perspective and have positioned myself for the when the bigger picture trend reasserts itself. Can I be wrong? Sure, but I am willing to accept the loss if this market falls apart. One lesson I learned very early in my trading journey is that the market is ALWAYS right, participating in it is a matter of developing the ability to go with ITS flow. Be open, be flexible. Questions and comments welcome.
BITFINEX:BTCUSDLong
by MarcPMarkets
25
BTCUSD: Higher Low Signals Buyers Are Back, But For How Long?BTCUSD update: Higher low established at 7851 as current candle takes out 8570 which is the previous candle high. This candle formation signals on coming strength and serves as confirmation that the buyers are back in the drivers seat. I bought more at 8693.10 (Coinbase). It is not about being right, it is about waiting for the market to conform to a predetermined scenario and having a plan of action for when the scenario unfolds and what to do if it falls apart. At the moment, the higher low formation is present as anticipated after the 8427 level signaled that this scenario was more likely. There are opportunities on two time horizons here: swing and position trades. I bought more which I plan to hold as part of my position trade. The difference between swing and position is swing trading aims to define a target and risk on a more immediate move. The risk is defined by the 8069 low while the first target is 10350 which is in the middle of the next resistance zone and gives you a reward of 1650 and a risk of 700 (RR ratio about 2.3:1). That is the swing trade. The position trade has no stop, and no target and depends on incremental sizing to manage risk. My average price is now 10,310. My plan is to start lightening up on the position IF the market starts pushing back up into the 13Ks at least. It is a big picture play and I intend to hold this position for a broader move. The next resistance zone is 9887 to 10836 which is the .618 area relative to the most recent bearish swing. A compromise of this level and subsequent break of the bearish trend line opens up this market for the next broader move higher. As optimistic as this sounds, there is always a risk we must consider. Fake outs happen all the time and this is why you must consider the bearish scenario in case it happens. A break below 7851 and this market is back in testing lows mode. That would cancel out the current higher low and I would steer clear until signs of stability return. Would I sell my position that I just bought? No, I will just not add anymore. In summary, you must be prepared for when the market shows you the signs you have been waiting for. In my previous reports, I have been describing this long scenario over and over. When it appears, instead of hesitating or reacting, you just follow your plan. And this plan does not come without its risks, and I consider mine at all times. For me, when all the factors lines up and I can no longer come up with any more reasons to stay out, I have no choice but to go long. The market is presenting one of the formations that I have been waiting for at a level where bullish reversal are high probability. The way to choose to manage this opportunity is a function of your risk tolerance and your outlook. Without a general idea of what those parameters are, you should not take any trades until you define them clearly. That is a task that only you can complete. Questions and comments welcome.
BITFINEX:BTCUSDLong
by MarcPMarkets
23
BTCUSD: Slow To Go. Retest Of 7Ks Before Next Run?BTCUSD update: Bearish momentum may still be in play because of the slow 8427 breakout attempt. Watch for a bearish close or break of previous candle low for more clarity. This does not mean I am bearish, I am observing and interpreting price action as the market unfolds. Many inexperienced traders who read my reports often think my evaluation is also a reflection of my trading decisions which is not the case at all. The market may show signs of short term bearishness, but that is the market, and only serves as a consideration for strategy and risk management. If I was day trading these markets, then I would be much more sensitive to immediate fluctuations. I am building a position trade which means I am looking at the market from a much broader perspective. I often remind newer traders that before you evaluate a market, you must have an idea of what time horizon you want to trade because information is weighted differently for each time frame. For my position trade, I am looking at broader market structures and evaluating price action on larger time frame charts such as 12 Hour, daily and weekly. And at the moment, price action has gotten stuck just under an important resistance point. A decisive break of 8427 is a key indicator for the return of bullish momentum on the bigger picture. It acts as a confirmation that the most recent bearish swing is over. So what does it mean if the level doesn't break? It means bearish possibilities are more likely. What bearish possibilities? A pull back to the 7Ks for a possible higher low formation. or a retest of the 6K low. In fact, the lower boundary of the current support zone 8171 to 4983 (.618 area of entire bullish structure) implies that a test of the 5Ks is possible for a failed low scenario. How do you manage a bullish position IF a bearish move unfolds? For me, I will not add any more to my long. Only in an extreme instance if price spikes off of a slight lower low will I consider buying more. Otherwise, risk can be managed by staying flat and waiting for more bullish signals. Once again, what to avoid on this time frame is getting short, because chances of a fake out are high based on the location of this price action. In summary, having a perspective serves as a guide. Risk management and strategy must be shaped and adjusted as the perspective changes. Your perspective must start from a time horizon and that is what should determine how your information is weighted. This is what allows me to be long and not get shaken in a market that has been bearish on the short term. Short term direction changes frequently, but the bigger picture does not. The fact that this market is trading within a major support zone is a key factor in my perspective and I am not about to become bearish at a low. As the market offers information that is in line with MY outlook, I can take initiative like add to my position. On the other hand, if the market offers information not inline with my outlook, I have to take defensive measures like not adding, possibly lightening up, and waiting. In order for this to work, my outlook must be based on a fundamental premise and in this case it is about the economic role of this market in the future. This is a major difference from day trading, which does not consider long term viability and focuses only on signals at the moment. Do not confuse perspectives. The simplest thing you can do is choose one and learn what is relevant to that time horizon and what is not. That alone will put you on a much more stable path when it comes to strategy and decision making in these markets. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
22
BTCUSD: How Indecisive Price Action Reveals Strength.BTCUSD update: Bullish momentum is building off of the 8171 to 4953 support zone. A break above 8427 and close will signal that the current bearish leg is complete. The next structure to anticipate is the shallow higher low formation. What indicates strength on this chart is the previous candle which is not obvious to the casual observer. Price made it as high as 8488, which does not count as a break of the 8427 resistance because it did not close decisively above. The strength is represented by the pin bar close followed by an immediate retest of the 8171 support zone boundary. How is this strong? Aren't bearish pin bars a sign of weakness? It all depends on the context of the situation. In this case, the bearish pin bar did not result in a break of the candle low, instead price pushes back up into resistance almost immediately relative to this time frame. That coupled with the fact that price is coming out of a major support zone makes for a stronger bullish argument. IF there is a pull back and another bearish test, I would watch for the 7K level to hold as a minor support for a higher low. I believe this situation is less likely, but something to be aware of. IF the current strength stays intact, what is more likely is a pair of spinning tops or indecision candles which I would view as a shallow higher low, followed by a solid push through the 8427 level. In summary, barring any negative catalyst, this is an area to consider putting on longs that is not as aggressive as buying into a market that is pushing lows. The more conservative play would be to buy when a clear higher low formation appears. The reference point for risk would be the 6600 area which is based on a proportion of the current minor bullish swing. IF this leg stays intact, the 9887 to 10636 zone is the next likely resistance target. Just like a vertical market reinforces boldness, a very weak market reinforces caution and fear. This is not a time to be fearful. Temper your risk and your aggressiveness through careful sizing, and/or basic price formations to justify a larger time frame position. What will protect you from another adverse move is your management of risk, not waiting for the perfect moment to enter. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
22
BTCUSD: Watch For These Signs To Confirm New Bullish Leg.BTCUSD update: Price finds support within the 8171 to 4983 zone and attempts to retrace higher. In this report I am going to discuss the next resistance level and some possibilities as buyers return to this market. As I wrote in my previous report, 8171 to 4983 is the largest magnitude .618 support area based on the entire price structure of this market. There is no other support area more relevant than this one. As suspected, buyers are slowly reentering the market as the Senate hearings put the general sentiment at ease. The general sell off is nothing more than a typical over reaction, and now is the time to watch carefully for the follow through as the market firms up. Keep in mind, as bullish as I have been and continue to be, this market is not out of the clear yet in terms of bearish structure. 8427 is the first level that needs to be cleared which will indicate that the current bearish leg is more than likely complete. From there, price is likely to test the 9887 to 10836 resistance zone (minor .618 of resent bearish swing) which is somewhat in line with the broad bearish trend line. This minor resistance serves as an initial target to lock in profits for any aggressive longs taken during the recent lows. What will determine if a broader momentum change is in effect is the next bear test. What makes these lows very tricky is there is no way to know if this is the beginning of a broader move up, or another head fake that will lead to a retest of the lows. If you are long from more aggressive entries, the best thing to do in this situation in my opinion is to now wait for supportive structure to unfold if you want to add to your position. There are three scenarios to watch for: the shallow pullback (often a couple of very small range candles), the higher low, and the double bottom (retest of 6K). If this market conforms to one of these scenarios, and does not make new lows, then there is a better chance a broader bullish move is in play rather than a bearish retrace back to lower lows. Also the fact that price is firming in a major support zone adds a lot of weight to any bullish formation that appears. In summary, being aware of risk is more important than rewards. This market still has room to test the low 7Ks or even 6K, but is less likely to go beyond that. With this in mind, you can better prepare for buying opportunities and manage risk as the market chooses its path. Choosing to be aggressive (buying into weakness) or conservative (buying upon structural confirmation) is all dependent on your risk profile and personality. In my case, I am long from an average price of 10800. I am open to adding but only on confirmation of structure. Playing the bigger picture in this way requires the patience and discipline to stick to the overall plan and not be swayed or shaken by immediate price movements. If you find yourself reacting to every little data point in this market, it means you have not chosen a time horizon. Start with the big picture and small size, that is a simple and effective way to keep probabilities and risk much more favorable. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
52
BTC -END OF THE STORM & BIG WAVES FORMATION - SPOTTED AHEAD !! Hello Followers and Visitors. Thank you for All Thumbs Up. I keep studying and testing "THE MOVING WATER"- (TMW)- A new trading perspective. It keeps working very smoothly. So far, within 2 months TMW could give us 5 charts that came to be 100% PERFECT. As you can see on the links below on related ideas. I have invented The Moving Water because all I learned from all around only gives us 60% of profit probability, to that's like flipping a coin, or gamble. I am trying to create something that is almost 100% perfect. If that is possible "ALL IN" should be my way of trading. I should know for sure what I am doing, and not be thrown by the waves everywhere. To me, if we change strategy because of the waves, we are not reading all the water flows underneath the sea, and should not trade, because if that is true, that would be just a bet - 50% - 50%, not a trade with a logical plan. What is on the chart above does not begin to embrace all of the analysis that is necessary to apply the strategy, so just the basic is there to give you the way. Finally, it is possible to see the end of the storm, and far ahead I can see big waves formation that we can ride up. For this trade, it is necessary to stay ahead, because price might just bounce really fast on the bottom of the green zone (buy zone) and on the top of the green zone (sell zone), so you should start placing orders now. There are two targets: 1st. under 10k, and 2nd under 14k. This analysis was made on BTC-USDT-POLONIEX, so if you are using another platform you should adapt the price range with those support and resistances. I believe human intelligence Infinite and the artificial intelligence will never win. Let's show them who is in charge. Let's crack the Bots. If you want to get serious about this crypto trading world I recommend getting your PRO ACCOUNT, because the free version does not give you the minimum necessary, which is: 5 indicators per chart, 5 saved charts layout, 10 side alerts, 2 charts per layout. So, if you are ready to become a real trader click on this link: tradingview.go2cloud.org GOOD LUCK. GOOD PROFIT. ALL IN.
Long
by EDWARDCASHTRADER
64
ETHUSD: Bulls Drive Price Into Resistance. Think Best Practices.ETHUSD update: The consolidation breaks from the higher low off of the 1K area and is now in the middle of a resistance zone. If you are long from the lows, this is a time to lock in SOME profit, NOT initiate new positions. At the moment, the major coin markets BTC, LTC and this one are moving together, just not at the same rate. What you are seeing in this market is the type of price action I am anticipating in BTC up to the 15 to 16K levels. This market has reached it's proportional resistance at the 1216 to 1304 area (.618 of recent bearish structure) which is an inflection point. The support and resistance levels that I notate on my charts serve as reference points to anticipate a crowd reaction but exactly how that reaction will unfold is unknown. It is a matter of recognizing and evaluating patterns that develop in those predetermined areas. At the moment price is pushing into a proportional resistance. This is an area where price is more likely to run out of steam momentarily and sell orders accumulate. This is why I always emphasize locking in SOME profit if you are long from lower levels. This is a best practice that reduces risk and still allows you to participate IF the market continues higher. IF you are driven by greed (typical herd mentality) and plan to sell nothing until this market reaches some fixed number "the top", you will under perform in the long run because you will be exposed to much higher risks. Shorting this market is also a high risk behavior unless you have the flexibility and attention to act quickly in terms of both taking profits or exiting a loss. Expectations need to be in line with the bigger picture in order to capture a broader move, and weakness is clearly not the broader market bias in my opinion. So if you were not positioned for this move at lower levels, where do you buy now? The 1074 level is a minor support (.382 of recent bullish swing) and serves as a reference point for new swing trade long positions. The key is to wait for 1. price to retrace to the level (may or may not happen), 2. wait for a reversal of some kind to appear (candle or chart pattern) and then 3. Evaluate risk and determine a reasonable target. If price never pulls back, then there is no trade, you move on and find something else. Can price still fall apart? Yes, because anything can happen. Price may retest 1074 and fall right through for whatever reason. For me, any extreme move below 1K becomes a position trade buying opportunity because I recognize the broader intent of this market. In summary, these markets are especially driven by emotions thanks to their novelty and large unprofessional population of participants. To capitalize on this, you must not let greed and fear govern your decision making. When a market reaches a resistance, even if it is slightly more likely to break through (like this market) you lock in profit if you have some, and hold onto some to see what happens. Otherwise you wait to see IF the market offers another opportunity at a projected level. Opinions and feelings will only lead to random performance which equates to nothing more than a gambling mentality. The first step you can take to minimize this natural thought framework is to learn to focus on risk, because real losses are what take you out of the game, not missing out on profits. Follow best practices and focus on always minimizing risk, and the profits will take care of themselves. Questions and comments welcome.
BITFINEX:ETHUSD
by MarcPMarkets
21
BTCUSD: Higher Low Implies Consolidation Breakout To Test 13K?BTCUSD update: Small consolidation forming around the 10988 support boundary on top of a series of pin bars within the support zone. I interpret this price action as a quiet accumulation. The higher low that has materialized at the 10534 to 9989 support zone points to bullish momentum increasing and a likely break above the 11871 to 12316 minor resistance zone. Higher lows typically lead to higher highs, it is a classic momentum reversal pattern. The fact that this structure is forming within a major support area is a bullish sign. The confirmation of bullish momentum is when price pushes through the 11871 to 12316 zone which is the .618 area of the most recent bearish swing. IF this market breaks 13K, it will signal higher prices to come. I am not short, but if I was, I would certainly be tightening stops or simply looking to get out. My position is long and my average price is around the mid 12Ks. I am still looking to lock in some profits in the 15K range. What about buying more? If you are not long yet, prices are still attractive for swing and position trades long. For swing trades, risk can be defined by the 10276 or 9900 lows which serve as reference points for stops. These stops may seem wide relative to current prices, but that is the nature of the structure in place at the moment. Taking long positions in this area has to be done with careful sizing in order to keep risk under control. IF the market tests the lows once more (which can happen) I will be looking to add more to my position upon the appearance of another bullish pin bar. Again I do not know if this scenario will occur, but if it unfolds, I am prepared to take action. The prices that I have in mind are the 10534 to 9989 area (.618 of minor bullish swing) or the 9683 reversal zone boundary. In summary, I can understand why some less experienced traders think this market is bearish. They are too focused on the small picture. Not only is the big picture technically still bullish, but we are in an expanding business environment which will keep these markets generally supportive. In such conditions it is better to buy near lows and hold for the next bull run which can lead this market back to the 16 to 17Ks without much effort, it is just a matter of the right catalyst. Effective positioning requires the perspective to buy when the herd is still bearish and sell when the market starts pushing into resistance zones. Most importantly you must have a perspective and plan your decisions around a small number of well defined scenarios, and then let the market choose. That is a great way to separate from the herd and capitalize on its impulsive nature. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
25
BTCUSD: Reversal In Progress, Longs Still Attractive?BTCUSD update: Higher low formation established as price found support off the 10K area. Price momentum is also transitioning to bullish as this market attempts to climb out of the major support zone of 10534 to 8656. The focus now is to watch for follow through and prepare for the possibility of a failed low. As I wrote in my previous report, I placed a buy stop to add to my position in the 10990 area and was filled. I do not have any stops or target orders placed since it is just an add to my existing position trade from 13150. I am keeping risk mitigated by not using margin and keeping my size relatively small. If for whatever reason price collapses, it will not be too uncomfortable and I will probably look to add more. From a technical stand point, this market is in a good position to build the next bullish swing. The low put in at 9900 followed by a solid bullish candle is a good form of confirmation. When I wrote about this in my previous report, price was around the 10400 area, and I said you can buy into the low, take more risk, but get a better price, OR you can wait for confirmation, not get the best price, but have momentum on your side. I chose the more conservative scenario since I would rather have momentum in my favor. In terms of structure, this higher low formation is not only coming off of a minor support zone of 10534 to 9989 (.618 of recent bullish swing) but it is also coming out of a broader overlapping support of 10988 to 8656 area (.618 of broad bullish structure). This combination makes this area attractive for both swing trades and position trades since the rally potential off of this area is of a broader magnitude. In other words this is a big picture support and IF price bounces, a retest of the mid 14Ks to mid 15Ks is very reasonable. At the moment, this market is still within an attractive area to get long since the reward/risk and momentum are both favorable. The key is sizing in a way that is inline with your risk tolerance because a failure from here can take price back to the 9Ks. Any swing trades from here and you are looking at around 600 points of risk at least. Can this market still collapse? Of course it can. The bearish scenario to be mindful of is a break below 9900. That will put price back into the lower reversal zone boundary near 9683 and nearer the 8658 low of the larger support zone. This area is where I would anticipate the failed low formation. This is when price goes slightly lower and reverses dramatically. Often this scenario appears to be very bearish as it initially unfolds, and then results in a false break. I am not saying this will happen, I am just laying out the possibilities in order to plan ahead just in case. This is how you avoid reacting, which is typical of the herd. In summary, this market is starting to trade slower compared to the way it was behaving back in December. It is not moving 2K points per day. At that time I was writing that the futures will bring balance to these markets, not a push to 30K. Balance means slower, range bound type markets which is more in line with reality. Realistic markets offer unlimited opportunities as well, but to capitalize on them structured decision making is a major requirement. As far as my position trade long, I plan to lock in some profit in the low to mid 14Ks and then see what happens from there. A run back up to the 16350 area is very reasonable as well. Either way, I have a plan and I adjust as the market provides new information. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
21
BTCUSD: Stability Forming Still Points To Higher Prices?BTCUSD update: Minor retrace takes price back to the 11K area while an inside bar is unfolding at the moment. This could be the beginning of the higher low formation that can take price back up into the 15Ks. Higher lows often lead to higher highs and are a general sign of strength. The formation at the moment is NOT an official higher low because the current candle is still open. IF this candle closes inside the range of the previous candle, it will be an inside bar. From there, IF price breaks above the inside bar high, I would consider that a trigger for a swing trade long. 10960 area can serve as a reference point for risk, while the first reasonable target is 14K. This puts reward/risk at around 2:1. IF price closes weak and no inside bar is established, then I will be watching for price to stabilize around the 10534 to 9989 area. This area is the .618 minor support of the recent bullish swing, but what also makes it interesting is all the overlap. This minor support is within a broader .618 zone that is relevant to the bullish structure that lead to the 20K high. On top of that, just below this area is the 9683 reversal zone boundary which is measured from the 10988 low. What does all this mean? There is a better chance price finds stability somewhere near or within the 10988 to 8656 area. Good place to take profits on shorts if you are short, and to look for bigger picture longs such as position and swing trades. Keep in mind this all dependent on the close of the current candle. At all times, many scenarios can unfold, but by limiting our scope to a smaller number of possibilities we gain the ability to make decisions that are more in line with what the market WANTS to do rather than what we want it to do. As long as price stays above the 9683 area, there is a greater chance of a higher low, it is just a matter of WHERE the market chooses to establish the formation. Also the reason I am using 14K as an initial target is because it is just below the 14211 to 15525 resistance zone which is the .618 area of the recent bearish structure. I prefer to lock in some profits while I can, and below the proportional area where sell orders are more likely to accumulate. In summary, navigating a trading market requires a well defined decision making process. Charts serve as a guide to evaluate possibilities and risk, but the key to utilizing them most effectively is to view them with a flexible mindset. There is no precision, only probabilities and estimates. This is why following an analytical framework and set of basic rules puts you steps ahead of the impulsive herd who continuously make and give back profits as they are driven to act by their greed and fear. We are obviously all in this to capitalize on opportunities, but in order to do that, the focus really should be on best practices rather than profits. Profits over time come as a derivative of quality decision making which is rooted by structure. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
20
BTCUSD: Bullish Momentum Returns. Eyeing 15K Target.BTCUSD update: Price is making its way higher as anticipated now that it has penetrated the 11600 resistance area. The bigger picture presents a bullish pennant formation which continues to point to an eventual retest of 20K or higher. You can interpret this environment in many similar ways depending on how you draw the parallel trend lines. Bullish flag, pennant, etc. The idea to take away is this short term price pattern is a broad bullish continuation pattern. Which for me, means this market is more than likely not going any lower than 8K. On top of that if you consider the highly bullish context of the general environment and velocity of expanding technology, it all points to strength. If you have not taken any longs yet, there is still opportunity, but risk has slightly increased. The 11600 old support/new resistance level has been compromised which indicates bullish momentum is present. The problem is buying in this area is essentially the same as buying in the middle of a range where price action is most random. In terms of a position trade long, a lower risk alternative is to start a very small position, something like 20% or less of your usual position size. The idea behind this is if price continues higher without any significant retrace, at least you capture some of it while keeping risk under control. If price pulls back, (which is very possible at current levels) you can then add to your position on the formation of a subsequent higher low. The price area to anticipate such a formation is now the 10534 to 9989 support zone which is the .618 area relative to the recent bullish swing. The scenario I would prefer to see is price retesting the low at 9683 for a double bottom or failed low formation. I DON'T KNOW if this will happen, but if it does I am prepared to buy more. When I position trade, I am participating on the broader time frame which means using stops will not be effective since price moves can be sharp and dramatic. I prefer to control my risk with careful sizing. IF the market collapses (ANYTHING CAN HAPPEN), I will not be as affected because I only add when the market is in line with my scenario, not against it. If price works its way up to the 15K area which is in the middle of the 14211 to 15525 resistance zone (.618 of recent bearish swing), I will be looking to LOCK IN some profit from my position trade. You may wonder: Why sell there when it's going to 20K? I am not controlled by greed. I lock in profits when the herd gets excited and buys into an area where there is a better chance the market will pull back again. I make decisions based on estimates and general probabilities, not feelings. Plus there is no guarantee that this market will reach 20K. And if it does, I will still have a small portion of my original position. One other notable observation about the 15K area is it also overlaps with the upper boundary of the bullish pennant formation. If price cannot break out, then there is a better chance of it retesting the middle or lower regions of the pennant. In summary, if you find yourself confused in a market like this, the first thing to do is zoom out and to get a clearer perspective. So many people get caught up on the smaller time frames, that they lose perspective of the broader intent of the market which always carries more weight. This market is bullish, even if it pulls back and retests the lows, that would be a buying opportunity in my opinion. Keep in mind my bullish outlook is also based on the context of this environment which is also another factor often overlooked by inexperienced traders. As far as adding to my position, I am choosing to wait for a retest of the 10534 to 9989 area for a reversal formation. Remember effectiveness in trading does not come from charts and indicators. It comes from knowing how to put the information derived from such tools into perspective in light of your own risk tolerance. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
37
BTCUSD: Minor Support Test Can Lead To Much Higer Prices?BTCUSD update: 11600 resistance taken out indicates bullish momentum returning while this market can be setting up for a broader move back to the 14211 to 15525 resistance area. If you are not long yet, the retrace to watch for is the 10242 to 9822 minor support zone. In my previous report, I wrote about the outside bar like formation (it wasn't an outside bar exactly, but it had the same effect). This served as a helpful indication that price was most likely on its way higher and since it was coming from an overlap of key support levels, it was a good place to consider position trade longs. Now that price is attempting to push through the old support/new resistance of the 11600 level, it can be preparing to establish a momentum reversal structure such as a higher low. The price area that I am watching for is the 10242 to 9822 zone which is a minor .618 support area relevant to the recent bullish retrace. It is also just above the 9683 boundary of the reversal zone where price established a swing low. If price can retest and reverse off of this minor support, that would be a signal for a swing trade long. If you are not long yet, this scenario offers an attractive area to establish such a position because the risk can be clearly defined by 9683 and potential target around the 14211 to 15525 zone. IF price fails to make a new low, that would present a sign of stability and increase the chances of higher prices in the near future. I have been long and will add if the higher low unfolds. Also IF the market offers the opportunity, I plan to lock in SOME profits in the mid to higher 14KS. For those who have been reading my reports for some time, I hope it is now clear why I also emphasize locking in some profits while you can. This is what a more normal trading environment is like, not that unrealistic non stop new highs that we saw weeks ago. Can price still fall apart? Sure, anything can happen and that is why we must always consider risk and manage it through stops and proper position sizing. The sign that would negate my bullish scenario is a break of the 9683 low without any immediate recovery or failed low price action. I believe this scenario is much less likely, BUT if it happens, at least take measures to protect yourself. In summary, one of the best lessons you can take away from the recent correction is when the market offers profits, TAKE some and wait for the next correction. Like I wrote weeks ago, vertical markets breed bad habits. Warped expectations and gut feel trading only lead to trouble. When corrections like this happen, and they always do, they shake out all the participants who had no sense of risk, or plan and were consumed by their greed. Greed and fear are at the forefront of the herd mentality, and the first step to separating yourself from that is to structure your investment and decision making process. Current market conditions are more realistic and require skill to navigate, and skill is not about what indicator to put on your chart. It is about structuring your thought process in a way that allows you to recognize and interpret market risk and potential. Buying supports in broader bullish markets and selling near resistance levels is a simple and effective best practice, but you have to put your greed and fear aside in order achieve better results consistently. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
38
ETHUSD: Higher Low Forming Sets Up Next Attempt To 1424.ETHUSD update: The 1291 minor support level has generally held while price is attempting to retest the level again. The resulting higher low formation is a reversal structure that implies strength. On top of that price has been consolidating into a triangle which often results in trend continuation. I wrote about the swing trade potential around the 1291 level in my previous report while this market was pushing into the 1250s. I also wrote that IF price can show some form of reversal pattern in the area, it would offer a swing trade opportunity because risk will be better defined compared to the current 1459 target. As of now, I am long from 1311.65 with a stop at 1243 and target at 1395. The reward/risk is actually 1.2/1. It is not spectacular, but what I am looking at more is the price structure and probability of the bigger picture trend reasserting itself. Price may be fluctuating over the next day or so, but the bias is clearly bullish based on price structure. Price has also tested a projected support (1291) twice resulting in a higher low which is a clear momentum reversal pattern. The current candle took out the previous candle high and is attempting to close strong. For MY swing trade plan, there is enough criteria to take a risk because I am now in line with the momentum and bigger picture trend. Have I gone mad? Has the market finally sucked me into an emotional trade? Not quite. I am simply following my plan. I am in line with the trend, a support as been tested and established and price is now testing it again showing signs of a higher low within a triangle while I can clearly quantify risk and a reasonable target. On top of that, this triangle can be interpreted as a sub wave 4 of the 5th wave that I have been writing about as well. This structure implies there is a better chance for at least one more test of the high. This trade is slightly aggressive because it is off of a minor support, and I did not wait for the current candle to close strong, but I am willing to take those chances in light of a bigger picture that is generally bullish. There is no perfection or precision, it is a matter of risk tolerance and context. If this market falls apart, which is always a possibility, I have a stop in place. It is wide, BUT I compensate for that with my size. In summary, one of the basic tenets of TA is "history repeats itself" and that is what pattern recognition is all about. I have seen this situation countless times, and when enough factors line up within the criteria of MY plan, then I am comfortable taking risk. The current price action FOR ME is clearly presenting one of those opportunities. Charts offer tools to help organize price information, but if your experience is limited when it comes to interpreting that information, then you will have trouble seeing the "context" which is not as obvious. This is one of the reasons why everyone was calling for BTC to go to 5K and I went long at 13150. Interpreting context requires a deep understanding of how markets work and is a function of experience which goes beyond what you can see on a chart. Things change fast in these markets, and that is why holding onto an opinion is not a good idea, especially on smaller time frames. I look for factors to line up that help me determine direction, risk and reward. Once I have that information, and it is acceptable to MY tolerance, I take a trade and that is what you see here. Comments and questions welcome.
BITFINEX:ETHUSDLong
by MarcPMarkets
23
ETHUSD: 1540 Target Within Reason But Risk Of Reversal High?ETHUSD update: 1424 all time high made as this market pushes its way into a potential reversal zone. In this report I am going to talk about the next potential supports and what to make of the current wave count. First, let's talk best practices. On a new high, it is always a good idea to lock in some profit. This does not mean sell your entire position. It means to take some profit while you can and look to buy back in if there is a pull back. I keep reading over and over, "HOLD" but that is greed talking and these same people are going to be the ones to buy from when they are shaken out during a sharp retrace. Can this market go higher? Sure. No one can predict the top, but at least you have a chance to capitalize on the buyers while they are still buying enthusiastically. As far as the reversal zone: this market is in a high risk area. This is defined by the 1459 upper boundary of the projection measured from the 1069 low. That does not guarantee that it will reverse, but it should be very clear that this level is NOT an attractive place to initiate a new long position. Why not short? Price may be in an attractive area to short, BUT there is no confirmation at all which makes the idea low probability at the moment. What about the wave count? I always write about when 5 waves are in place, the chance of a broader retrace increases. As you can see there was a retrace attempt that took this market to the .382 of the recent bullish structure at the 1069 area, and the support held. Since 5 waves were in place, I was expecting that support to be compromised which would be more in line with the broader correction scenario. So what happened? The market negated the wave count. This happens, and is the reason why as short term traders we must always be flexible and open to anything. This is also why having the ability to interpret context comes into play significantly in situations like this. In a more normal environment, I would be looking for the current leg to be the B Wave, which implies a much steeper pullback to come. Based on the context of this environment though, I am not labeling this as a B wave. This is the Wave 5 of 5 which still has some room to run before facing the increased possibility of the broader correction again. How much higher? 1540 is a reasonable area to anticipate as the next target IF price pushes through the 1459 boundary without any bearish reversal activity. Remember there is little precision in TA. It offers ways to arrive at estimates that are derived from the information available at the moment. The retrace levels I am watching for in case of a shallow pullback are 1291 (.382 of recent bullish swing) and the 1206 to 1152 support zone (.618 of recent bullish swing). Based on the current structure, it is reasonable for this market to present a shallow retrace (subwave 4) and make one more attempt higher (subwave 5) before a broader correction is likely. In summary, just because the market has potential to go higher does not mean it is safe to take on a new position. Current levels offer a chance to lock some portion of profit for those who took risk at lower prices. At the same time, shorting may offer more attractive reward/risk, but without confirmation, you are selling into a situation where momentum is working against you which does not justify taking a risk in terms of MY trading plan. For me, the best thing to do is wait to see IF the market chooses to revisit a projected support level, wait for some form of reversal, and quantify risk from there for a swing trade long. There is no need to chase, because the market will eventually line up factors that make the most sense when it comes to reward/risk AND supportive momentum. Patience pays. Questions and comments welcome.
BITFINEX:ETHUSD
by MarcPMarkets
22
ETHUSD: 5 Wave Completion A Bearish Sign?ETHUSD update: 1382 all time high reached which was just 3 points shy of the target projection which completes 5 large magnitude waves. The possibility of a broader correction is now increased. In my previous report, I wrote about the possibility of a subwave Wave 4 correction before the bullish Wave 5 which is now in place. That scenario has played out and price has rejected the 2.618 target projection at 1385 which is a sign that all 5 larger magnitude waves are complete. Based on this structure, it is now reasonable to expect a broader correction. Keep in mind, I am not writing this based on feelings, or irrelevant opinions. It is based on the probabilities inherent within the market structure that is in place at the moment. How is this helpful? For one, I would not be looking to establish new longs at these levels because of the increased risk of retrace. How about shorts? The reward/risk is in favor of shorts BUT there is NO immediate reversal structure at the moment. Larger magnitude turning points are often a process and require time to unfold. One bearish bar is not enough to get short in my opinion. What would be a better scenario to justify a short position? A double top or lower high. That is when momentum aligns with the attractive reward/risk. Like I have written about before decisions are better when they are evidence based. And right now there is no evidence of a momentum reversal (a peak and a bearish inside bar is a good start, but not enough to justify risk). This is one of those areas where being flat makes the most sense for MY trading plan at the moment. Now keep in mind, when I write about a broader correction, reasonable levels to anticipate are the 872 to 738 support zone which is the .618 of the recent bullish structure. That is where I would look to put on a swing trade long if the price action can prove itself in that area. This type of correction can take days to unfold so a ton of patience is required. The reason why I am not that interested in the 1069 level (.382 of recent bullish swing) is because it is too shallow relative to the magnitude of correction that I am anticipating. In summary, the current situation in this market is very conflicting. On one side you have structure that signals a broader correction is more likely to unfold in the near future, while there are no reversal patterns in place (a single bar is not enough). In my opinion, until this market shows more clarity, it is easier to just stay flat. That is what my plan calls for. If your plan is more aggressive, that is fine, BUT you MUST take responsibility for your actions, because if you are going to blame others for your lack of experience, then you should NOT trade any market. My trading plan helps me not only to sort out the lower risk opportunities, but it also helps to filter out many would be losing trades. It has a cost though, and that is missing out on some good moves as well. I am okay with that because I know that generating profit and then losing it is more costly than missing out because its not just money you are losing, it is also confidence which you cannot put a value on. Opportunities in financial markets are infinite, while your capital is not. Comments and questions welcome.
BITFINEX:ETHUSD
by MarcPMarkets
60
BTCUSD: What To Watch For Within Key Resistance Area.BTCUSD update: Some selling activity is now appearing in the middle of the 16350 to 17876 resistance zone. This price action also happens to be in an area of overlapping resistance levels that I will explain further in this report. If price cannot recover quickly, it is more likely to retest the low 15K area. I have been writing about the 16350 to 17876 resistance zone for about two weeks. It is the .618 resistance area relative to the broader bearish structure off of the 19891 peak. Upon further evaluation, there are two additional levels within this zone that are also worth noting since they point to a increased chance of selling pressure. The 16923 level is the 1.618 target projected from the 12795 low. Often price will hesitate around these projections as it is doing now. The other level which is less relevant but still worth noting is the upper boundary of the reversal zone measured from the 16474 peak. This price is worth noting because it serves as a breakout point. If price pushes above, it is then much more likely to test 20K, if price can't break this level, then it is more likely to correct which can lead price back into the low 15Ks. Even though price is showing potential reversal activity at the moment, it still has to prove its weakness by breaking back below the 16450 and 16100 areas respectively. This is where letting the market prove itself comes into play. If you are in for a swing trade long, and prefer to be conservative, you can reduce risk now by exiting a portion of your position. If you prefer to be more aggressive, you can just hold until the market proves it wants to retrace further. Obviously you will lock in less profit but that is the trade off that you must accept by giving the market a chance to reward you further. A healthy correction from here would be the retest of 15070 (.382 of recent bullish structure) or the 14398 to 13766 area (.618 area relevant to recent bullish structure). That is the area to look to add to a position, or enter a new swing trade long upon a bullish reversal. In summary, the trading mindset is about anticipating. Anticipating means we consider a number of scenarios and then we evaluate new information to see which scenario the market is conforming to. At the moment this market is hesitating in an area where a significant correction can unfold from, BUT until it proves it wants to follow such a scenario, it is reasonable to expect continued strength. Having levels that are generated from market structure helps us to paint a better picture of what is within reason based on market movement, not our feelings or opinions. My plan is to initiate a swing trade long IF my projected supports can be reached and validated around the low 15Ks or low 14Ks as described above. Having such criteria helps me avoid being consumed by the reactionary emotions of greed and fear which is what drives the herd mentality. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
27
ETHUSD: Push To 1045 Before Potential Correction?ETHUSD update: Price hesitates around 1000 which appears to be developing into a double top formation. Isn't this bearish? In this report I will evaluate the price action and consider what is more likely to follow based on market structure. The price structure leading up to the 1K area is bullish and has not shown any signs of significant weakness yet. The potential double top at the moment does not carry much weight. Why? Markets that are going to retrace often reject resistance areas quickly upon a retest, not float around the highs. Based on this price action, this market is more likely to consolidate on a smaller time frame and break higher. Which is also another way of saying it is NOT a good time to short this market. Based on the most recent pull back attempt, there is now a reversal zone boundary at the 1046 level. This means price can push slightly higher into new high territory and fail for a more significant retrace. This makes the area between current price and the 1045 area an attractive place to lock in some profit, and reduce risk. It is not an area to establish new swing trade or position trades long because the risk of retrace increases the higher it goes. The 978 area which has seen some price gyration is also a notable level because it is a 1.618 extension projected from the 642 low. These levels are usually not precise, but offer a good area to estimate a general target when it comes to assessing reward vs. risk. What all this means is this: To maximize your investment and your operations in this market, you need to at least have a sense of the time horizon for your position. If you are swing trading and bought in recently, this is an area to lock in profit to justify the risk taken, which means it is wiser to unload more of the position than less since the retrace risk is so high. If you are holding for longer term, and own from much lower prices, this also offers a chance to lock in some profit and reduce risk, but you have much more flexibility because a 20 to 30% retrace is much less threatening. Without some sense to time horizon, you will be at the mercy of the market. Your greed and fear will govern your decision making and more than likely get you to buy at the high and sell at the low. As far as buying goes, I am most interested in the retrace IF the market offers such an opportunity. The 881 level (.382 of recent bullish structure) is the first level I am watching for a possible bullish reversal. If price happens to retrace further, the 835 area (old resistance/new support) and the 788 to 724 zone (.618 of recent bullish structure) are the areas I will be watching for an attractive reward/risk opportunity as far as a swing trade goes. In summary, a key concept to remember about technical analysis is this: it offers a framework to organize market information in a way that helps us uncover clues as to what the market is more likely to do in the near future. It offers a way to measure and compare the decisions of the crowd and use that information to develop potential scenarios that the market is more likely to follow. It does not mean the market WILL follow. It is up to us to adjust as new information becomes available. When a market is on it's highs, as a swing trader, that is a place for me to take some profit and reduce risk. I don't care if it goes higher without me. IF the market is nice enough to offer a more attractive opportunity by pulling back to a support, then I will be happy to look for a place to get long in the area. Having this decision making structure allows me to operate in ways that stack probabilities in my favor, and give me a better chance of a profitable outcome on a repetitive basis. Having the ability to extract smaller profits repetitively is much more valuable than a single home run. Comments and questions welcome. Special thanks to The Henry Raines Show and @Goldbug1 for having me on as a guest. Listen to the archive: www.henryrainesshow.podomatic.com
BITFINEX:ETHUSD
by MarcPMarkets
30
BTCUSD: Bullish Momentum Can Lead Back To 20K.BTCUSD update: Bullish breakout and now attempting to retest the 16350 to 17876 resistance zone. The lower boundary of this zone is also the range high area as well. This is a good area to lock in profits upon any bearish reversals. At the moment, this market is showing continued signs of bullish momentum. When I say watch for bearish reversals, that does not mean I am bearish, I am just open and flexible to what the market can show next at such levels. Since the triple bottom formation off the 11600 low, this market has been producing high lows and higher highs. There is nothing bearish about that type of structure and implies bullish momentum. The current price area is very conflicting because the location implies a greater chance of selling, while price momentum shows no signs. So how do you navigate a situation like this? You go with the momentum until the market proves otherwise. To protect yourself and reduce risk, this area presents an opportunity to lock in profit, NOT get short (yet). Like I have explained in other reports, it is a best practice. Holding onto a smaller portion of your position allows you to participate if the market decides to break through the resistance zone and retest the 20K area. Since this market has broken out of a triangle, there is mounting evidence on the bullish side, especially since the low of the triangle represents a broad higher low on the bigger picture. Everyone gets caught up in the head and shoulders because they cannot see beyond the chart. Head and shoulders patterns are good for smaller time frame trading like day trading or scalping, not broad counter trend moves. The environment for this market is very bullish. Charts are a way to organize data and get a sense of temporary market intentions, not to base long term opinions on. As far as swing trades go, IF the market retraces and offers a lower risk buying opportunity, the levels to watch are the 14465 (.382 of recent bullish swing) or the 13420 to 12660 area (.618 of recent bullish swing). Also 15000 is worth noting because it would be a retest of the triangle boundary and a old resistance/new support. Bullish reversals in these area present more attractive buying opportunities in terms of risk compared to where price is now. Especially the 12,500 area which is the range low, great place to take a swing trade or position trade upon confirmation. In summary, anticipating which way the market is likely to move next is only one piece of the puzzle. Ultimately, the market leads and the best we can do is adjust or "listen". Right now this market is at a resistance which is an area to anticipate more selling than buying on the short term, BUT there are no significant signs and until there are, we can reduce some risk by locking in some profit or take no action until the price gives more of a reason. As long as the momentum does not change meaning price does not break any supports, or hardly retraces, then it is likely to continue higher. A push through the resistance zone can lead the way to a 20K retest, while any retest of support has a greater chance of holding as long as this market is generally strong. When you wait for a lower risk opportunity, like a bullish reversal off of a significant support, when situations like the one we have now come along, you have a lot of flexibility and favorable choices. This is much better than buying impulsively only to find yourself at the mercy of the market. Patience is strength, greed is weakness. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
44
ETHUSD: Sub 1000 Psychological Resistance Area Higher Risk?ETHUSD update: 954 all time high reached as price reacts to the upper boundary of the 945 reversal zone. Price momentum is bullish and is likely to test 1000 but buying at current prices presents increased risk. This price action is nothing new. When you have strong markets like we have seen in these coins, it is still better to lock SOME profits at highs, and look to buy nearer supports. The biggest problem that I see with new investors is they are controlled by greed. They want to sell at the exact top and feel as if they have lost if the market goes higher without them. This is a normal reaction but must be identified and eliminated because this same greed is what leads to turning a winning position into a losing one. The 945 upper boundary of the reversal zone is a projected level that is measured from the 492 low. IF price fails within this zone, like it is now, that presents a situation that is similar to a double top but not as obvious. This zone, along with target extensions serve as better places to lock in profits, not establish new positions. Why not lock in all profits and just buy back on the pullback? The reason is there is no way to be certain that price will retrace or how much. By locking in some profit, you reduce risk if price decides to fall apart, and by holding onto some of the position allows you to continue to participate in the market IF it continues higher without any significant retrace. This is how a swing trade evolves into a position trade. We can't control profits, we can control risk. As far as where to buy now, the first level I am anticipating is the 835 minor support (.382 of recent bullish swing) which is also an old resistance/new support level (inversion). The second area is the 761 to 710 zone which is relative to the .618 of the recent bullish swing measured from the 640 low. Buying at these levels would be for a swing trade and would have a target some where in the high 900s. The risk has to be determined at the time of the entry. And that will be based on what kind of price action unfolds IF the market chooses to retest one of these areas. I would like to see a reversal pattern such as a double bottom or failed low before I consider anything else. What if price never pulls back? Then I miss the move. I do not care about how high or low markets go, I am only interested in opportunities that present a well defined risk, a signal that shows momentum is in my favor, and a target that is within reason and relatively attractive compared to the risk I have to take. It is possible price may hesitate to retrace and just continue higher to test the psychological 1K resistance, but the risk is unattractive at current levels. In summary, the concept of selling while you can is nothing new to professionals who are aware of the limitations of greed. When markets push highs, that is an opportunity to sell while buyers are plentiful, while selling the precise top is irrelevant. Buying strong markets at a low point offers greater reward potential at a lower risk. Controlling risk is what leads to long term success in any market, not home runs. In a case like this market, waiting for a retrace to a relevant level is the best I can do, especially when price is showing some signs of selling off of a projected resistance area. All markets eventually retrace and if the market I am interested refuses to, then I will look elsewhere for a market that offers opportunities that make much more sense in terms of the risk I have to take. Comments and questions welcome.
BITFINEX:ETHUSD
by MarcPMarkets
32