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BTCUSD: Key Support Zone Reached. Where Is The Long Trigger?BTCUSD: Price fluctuating inside a major support zone and hesitating within a minor overlapping support area. This area presents very attractive reward/risk for longs, but can it break lower? Big difference from the vertical markets of a month earlier, but this is reality. This is more in line with how markets trade. The good news is price is within a projected support area with a lot of overlapping levels. Even though it is has not reversed up strongly, it still offers potential since the chances of a bullish reversal are generally high. In my previous report, I wrote about the possible inside bar that was forming and the potential bullish trigger which never materialized. Price broke lower instead which brings it into a very attractive area for ME. The whole point of a trigger is to act as a filter and minimize premature entries. And that is exactly what happened here if you were disciplined enough to wait for the close of the inside bar and outcome. Now price is doing it again. Another inside bar potentially forming, two long tails (IF the current candle closes in this configuration) and all of this is happening within the projected support zone of 10988 to 9989 which is the minor .618 support relative to the recent bullish swing. The long signal would be IF the current candle closes as an inside bar, and the high of the next candle breaks above the current candle high. IF that scenario takes place, again it would serve as an entry for both swing and position trades long because of where this is taking place in terms of the bigger picture (large magnitude support). The more aggressive trade is to start buying early, anticipating that the current levels will hold and probabilities will play out. This scenario is RISKIER because price has not fully reversed yet, and you are betting that it will because of the probability of its general location. And as far as risk goes, for a swing trade, the 9950s serve as the best point of reference. Just because the general probability of reversal is high does not guarantee that it will happen. This is why if you prefer more stability and confirmation that momentum is in your favor, you WAIT for the bullish trigger. Which also means you will not get the better prices that are available now. It is a trade off and you must decide which scenario is more in line with YOUR risk tolerance. Anything is possible and price can also retest the 9683 low and possibly lower since the support zone boundary is at 8656. IF this happens I would be looking for the failed low formation to add to my long position as well. In summary, I am very interested in adding to my position trade at these levels. Since momentum is still bearish, I will take a slightly more conservative route and place a buy stop above the market at the 10980 level. I will not get the best price, but I don't mind giving that up in order to have momentum on my side. This helps to minimize a premature entry as well. If price spikes into the low 9Ks I will also consider adding to my position which is aggressive, but I will temper the risk by keeping my size relatively small. When markets look their worst, that is often a good time to buy which is counter to the herd mentality. The key is to do it in a way where risk is carefully considered and entry scenarios thought out and prepared for in advance and then waiting for confirmation. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
24
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: 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
BTC Short Term Bounce?Whenever, the price goes up or down too fast, the price almost always retraces. Bitcoin has gone down 20% over the last two days, and is looking to make a short term bounce. A quick glance at the RSI and we see that it has broken the former trend line, which now is the support line. The RSI is no longer in a downtrend, but starting a uptrend. There also a cross over on the MACD, indicating the bears are losing momentum and can't drive the prices lower. At the bottom, we see a long doji candle. These type of candles are often a powerful reversal signal. In addition, Bitcoin failed to made a higher low, which could mean that the downtrend is over. Possible Trade Setup: Stop Loss: 13700 (Slightly lower than the current low) Target: 15740 (upper trend line in descending triangle) What is a cross over? www.google.com What is a doji candle? www.google.com
BITFINEX:BTCUSDLong
by aoeuaoeu
LTCUSD: Triangle Breakout Can Lead Back To 300?LTCUSD update: Consolidation breakout occurred with price now trading just under 250. At the moment, based on the current structure, momentum is bullish and is more likely to work its way into the 285 to 321 resistance zone. Just like BTC, this market has formed a higher low in recent price action which is clear momentum reversal. This formation has lead to the breakout of a triangle that has been developing for two weeks (since the 370 high.) The focus now is on the potential retrace levels that would offer an attractive reward/risk opportunity to go long. As I write this, price is hesitating within a mini consolidation (a series of inside bars) which is taking place within the area of a previous peak (257.40). This minor resistance can lead to a retest of the 234 level which is the .382 of the recent bullish structure, or the 219 to 210 support zone which is the .618 area relevant to the same structure. These levels are minor supports but do provide prices to watch that offer more attractive reward/risk compared to where price is now. IF price can retest these areas, a reversal pattern or higher low (just like the one in place around the 220 area) would be the justification to go long. As you can see from the chart. the target is the 285 to 321 resistance zone which is the .618 area relevant to the recent bearish structure. Price has been staying within these broader resistance and support zones which has lead to the triangle that is now obvious on the chart. Risk will have to be measured at the time the bullish reversal pattern occurs. What to avoid in a situation like this is premature entry. IF price falls through the oncoming supports, then it is more likely to test the low 200s or even the 190s for a possible double bottom formation. That scenario would offer the most attractive buying opportunities, especially for longer time horizon trades. In summary, the levels that are projected on this chart offer a better possibility of where price can react or reverse. They provide reference points where you can anticipate price action rather than react to it. The key to using this information effectively is to observe and evaluate the outcome of the price action at the time the levels are reached. Not jump in blindly. What you are looking for is price action to prove it is more likely to follow the anticipated scenario and that often unfolds in the form of a reversal pattern. The hardest part is WAITING in the face of building emotional pressure and impulse. By letting the market prove itself, you at least align your thoughts and actions with what the market is more likely to do rather than what you think. Comments and questions welcome.
BITFINEX:LTCUSD
by MarcPMarkets
24
BTCUSD: A Reversal Here Can Spark New Rally?BTCUSD update: Higher low in progress just above the minor support area of 12483 to 12139 as bearish price momentum continues to maintain control. Now is the time to watch carefully for a swing trade long entry. As I wrote about in my previous report, there is an infrequent broader reversal structure in play. The subsequent resistance level has been taken out (13520) and the next step is to evaluate the following retrace for a swing trade long entry. The market is following the scenario so far, and presenting the anticipated higher low. Now the question is: when to enter the swing trade long? The answer is in how the current candle closes. If it closes on it's lows, then there is no reason to enter if you are waiting for momentum to be in your favor. Buying when momentum is going your way minimizes pain and randomness from the setup over time. I am waiting for a break of the high of a pin bar or inside bar to occur which would be around 13300 at the moment. That would trigger a swing trade long with a stop around 12100 and a target of 16200 which is around 3:1 reward/risk. This swing trade would be separate from the position trade that I entered into the other day that has no stop or target (explain in that report). It would be especially notable if these candle stick formations appear within the 12483 to 12139 minor support zone which is the .618 area relevant to the recent bullish swing. Waiting for the close of the candle helps to minimize premature entries which often lead to losses. At the moment, price can still continue lower and even retest the 11600 lows. IF that happens, I would be looking for reversals to add to my position trade as well. Prejudging a candle before it closes is a bad habit because you are assuming it is going to close in a way that may not happen (this is especially common on larger time frames). Patience pays especially in preventing potential losses. In summary, not a whole lot has changed in terms of technical formations. The biggest lesson you can take away from a situation like this is that markets stabilize at tops and bottoms over time. It is a process, NOT an event. People who got sucked into buying this market too early, and too big are now at the mercy of the market. Not a good position to be in, but this behavior that payed off two weeks ago is the same behavior that is going to wipe out the inexperienced and impulsive eventually. In my opinion, it is better to miss out than to win and give it all back because when you lose, you lose more than capital, you lose confidence which is a magnitude of loss that cannot be measured in dollars. Slow and consistent requires knowledge and a strong self awareness. That is was trading is really all about, not charts, oscillators and news. Improve your success rate by first identifying and eliminating ineffective behaviors and becoming more aligned with your risk tolerance. It will help you separate yourself from the herd mentality. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
31