Get started

Howto

BTC correction! Understanding levels and timingBTC has started two quick down moves in the last two days inside the broader range. Both targets from my posting yesterday have been reached (11200/10800). But where do these moves start and when? And why was the second correction double the size of the first one? The market is fooling people all the time, so just when everybody believes in the strength of the uptrend again the biggest correction occurs. Now lets look at both corrections in detail... Correction 1: The downmove starts after my target at 11650 from a leg up had been hit (red arrow 1). There is a bulltrap by breaking above the prior little double top. The target of the correction is at 11200 (blue circle) which is the breakout area, so there might be some breakeven stops that are being hit from the breakout traders. Why didn't the downmove continue down to 10800, the uptrend channel had been broken, right? Because it was the first break of the channel and we can expect some legs up to a new high or at least a retest of the high! Correction 2: After correction 1 prices move higher in a new small uptrend, but there is another trap waiting, the same structure I always talk about: The break of the trendline and then two small legs to a new high at 11780. Now the bigger correction can start (red arrow 2) because: - the bigger and small uptrend have been broken - afterwards there were 2 or more legs to a new high - now many bears have given up and closed shorts, longs have bought in on the way up - and of course there is again a small bulltrap with the break above 11750 What happens when a lot of people are fooled? A quick and steep downtrend, because a lot of stops are being hit and the smart money is shorting, looking for prices to go to the lower side of the range at 10800. So how exactly did this 1000 point drop unfold? You can see it clearly in the chart: Again we had the break of the steep trendline and two legs down to the target (blue circle)! You can see this structure over and over again... What is happening right now? BTC is still moving below the EMA, I see a possible spike and channel formation. The target is at 10200-10100 (from legs+support level). Before prices reach that target I would expect a move up to the 10800 area to get some breakeven stops.
BITFINEX:BTCUSD
by FBlocktrader
Reversal over? The long road to 9000...When BTC broke free above 8000 again a few days ago and continued to storm up, a lot of people might have looked to 9000 and thought it would reach that level in a matter of hours. But not so fast...the market had some tricks up its sleeve to scare you out of your long position or to make you believe we are going back to 6000 again. How to avoid getting tricked and profit from all this? So after the first leg up and the break of the uptrend, price action rules did give a target of 9000 (second leg). We eventually did get to that level, but not without a lot of seemingly erratic up and down, trapping traders to the wrong side. One of the keys to trading is to determine if we are in a trend or in a range! When the second leg did not reach its target and prices went below the EMA it is time to think about a possible range. This range, which was established at the Entry 1 (blue arrow), is pointing upwards, so we have a large trend channel. Always try to find these slightly tilted channels, do not look only for horizontal ranges between support and resistance! You can see prices moved exactly in this channel for several days. Nice short and long entries could be found at the upper and lower side of this channel: 1. Long: - second entry long from the low at 7550 - Range expected - for more details see my posting "No free lunch!" in the related ideas 2. Short: - now this looks like a perfect bulltrap at the top of the channel - failed breakout above 8500 resistance - we did see two equal length legs up inside the channel reaching the upper side 3. Short: - expect a second leg down to the lower channel line - second entry short after it turned down at resistance - breakeven stops of traders who got short at entry 2 were taken out 4. Long: - little bear trap at the lower side of the channel - second try to go higher around 7800 (second entry long) - two legs down completed 5. Long: - another try to move up counted from the low at entry 4 (second entry long) - channel was confirmed again - expect to go to the upper side of the channel, making an new high 6.Short: - we had a strong short term trend up, the break and several legs up - bull trap at the top of the channel (breakout above 9000) - now the second big leg to 9000 is completed, i talked about in the beginning! 7. Short: - perfect second entry short after the break of the steep downmove - two small legs back to the EMA (two pushes up) - breakeven stops from shorts below 7850 taken out - another red leg down expected to the lower side of the channel The end of the big reversal in Bitcoin? No, we are still moving inside the channel. But right now a lot of people might see this channel...and when everybody does expect something to hold often the channel is broken. So pay attention to the short-term downtrend channel which is still in play. I would not be surprised if we see 8200- 7900 again. Why? There might be still some breakeven stops from the longs at entries 4 +5 ;)
BITFINEX:BTCUSD
by FBlocktrader
2
No free lunch! How BTC pushes traders out..Do you sometimes get pushed out of a profitable position? Do you see the market coming back to your breakeven stop, only to then continue going in "your" direction? The market is doing this constantly, so be aware of this. I will show you two areas where this has happened yesterday. Traders often do get no "free lunch", which means a riskless profit. After the trade entry, you may have a nice profit but then see prices turn against your position. Of course you do not want a profitable position to end up in a loss, so you move your stop to breakeven at some point. Is there a solution to this dilemma? Yes, you can exit a good position at a reasonable target, giving up more profit potential. Or you can leave your stop in its original place and risk taking a (small) loss, but stay in your position which can still become very profitable (again). Yesterday there where two examples of this "breakeven stop hunting": 1. The "breakout" longs In the chart I marked the breakout area (red box), where traders entered long, after prices went above resistance levels at 7550 to 7930. Not a bad decision, prices went up to hit the resistance at 8400, nice profit. Traders who hoped it would go higher still, like 9000, of course stayed in position and may have moved their stops to breakeven. But now BTC turned down and made several legs back to 7550. So now the bulls all have seen their stop hit, and what happens? Right, it goes up 1000 points! 2. The "early" shorts Aggressive short traders may have entered below the resistance at 8400 when they saw the market showing weakness there. In the blue box you can see the short entry levels between 8400 and 8100. After seeing a little profit the market then goes up again to 8400, hitting stop loss or breakeven stops of these shorts. Now of course it goes nearly straight down where everybody thought it was going (7800-7600). After all this there was a nice long entry: The long entry (blue circle) also was created by a short trap below 7800, which looked like this: People saw the short term downtrend and break below support at 7800 (former resist). Then a pullback from 7550 to 7800. When prices turned down below 7700 again, some traders would think bearish and short ("Hey, double top and strong downmove, we are going to 6200 again.") Now the bear trap strikes, presenting a long entry: The market makes a second entry long (second push up from 7600). Stops of shorts are being hit and drive prices up, not looking back to this level (7800)! Now how could you have anticipated something like that? Think about a possible range, because prices are moving above and the below the EMA. Think about the breakeven stops of the longs (see above my point 1). Longs are out and so the market is "free" to go up again. Longs might have to buy in again. Think about another leg up (second big leg) and a new high. As you can see, Bitcoin moved up to the upper side of the range in two equal legs and also made a new high! Feel free to post questions or PM me! Or just follow me ;)
BITFINEX:BTCUSD
by FBlocktrader
5
The trend is strong! But how to find entries and targets?Bitcoin did brake out of its spike and channel formation to the downside, after a short lived pullback at 9500. This is not surprising, because prices traded down into the broader channel/range by making a first leg. We often see breakouts in the same direction prices traded into a range, thereby continuing the trend. The market then established a steep downtrend channel, moving with two smaller legs down to 9.000. A quick pullback then took prices back up to 9500 again, thereby testing the former range again. The pullback started at the end of the big second leg (blue) and the target from the smaller second leg (red). How to enter in trend direction when you see such a strong pullback? Wait for the steep uptrend to be broken and look for a new high afterwards! Then the downtrend should continue and a new short entry may present itself, as it did in this case. BTC failed to get back into the former range at 9500 and the bearish candle suggested a retest of the low at 9.000. Why a retest of that support could be expected? Because after a short term downtrend, like the second leg (blue), you expect a new low or at least a retest of the low at 9.000! We did indeed get a new low at 8.800. This move can be seen as a first leg and a new short term trendline drawn. After a short pullback to the downtrend line at 9.100 you could expect a equal length second leg, which had a target at 8.430. The market pulled back hard 500 points exactly there! Don't fight the trend, look for price action entries and targets!
BITFINEX:BTCUSDShort
by FBlocktrader
BTC in spike and channel formation: Pullback ahead?The end of the downtrend? Well, maybe not yet, but we see a spike and channel formation. How to trade this formation? The sharp drop from 11.000 to 9.900 is the spike on the 30m chart. At the end of this movement you could see a downtrend channel, but that channel was quickly broken when BTC made two nearly equal legs up to 10.500. This is not a place to go long, just the opposite! Prices were rejected by the EMA and quickly dropped to a new low around 9.800. We see typical price action in a strong downtrend, because it creates a trap at 10.500 for longs and one for shorts at 9.800. Now we can draw a broader range, which is a slightly downwards pointing channel. This was confirmed when prices bounced above the EMA. Now a lot of people would call this a double bottom or a head and shoulder reversal formation, looking to the upside when prices broke above 10.360. And this is were the next bull trap happened! What the trap looked like? After the break of the prior up move from 9.800 to 10.350 we got a pullback to the EMA and two small pushes up above the resistance at 10.350. Just to our upper range/channel line! By following price action rules you would have switched to range trading mode : Keep watching those upper areas and still look for shorts. The upper channel line was confirmed several more times after that, and two more short entries could be found at these key entry points. At the second entry the momentum to the downside picked up and prices went straight to the lower side of the channel and beyond. But why beyond? Think about equal legs: The first leg was the spike, the target for another down move is the equal length second leg. It has reached that target at 9250 to the tick ;) Markets like to create symmetric moves and second legs, second entries...good stuff :) So, what about that pullback from here? The downtrend has played out well, therefore i would expect a pullback from here to at least 9.700 (resistance). The broader channel could still be in play, because often there are fake breakout. If BTC moves back in the channel we might see 10k again.
BITFINEX:BTCUSDLong
by FBlocktrader
Negative news (Coincheck): How to trade the pullback in BTCWhen markets go down sharply, like the fast drop in BTC after the Coincheck hack, they tend to pullback and eradicate any losses in the following 24 hours. But even if you know and expect this, you have to follow price action rules and wait for long entries. How could that be achieved in this case? 1) Why was the market starting its pullback at 10.300-400 levels and not go down and test the 10k supports, as a lot of people expected (myself included)? BTC is moving in a broad range, which is a slightly upward pointing channel. The lower line did run at the 10400 level, providing support. Another factor may be that when everyone is expecting something, like testing 10k or fall below that, it is not going to happen ;) 2) How to enter with a long position to profit from the pullback? The first long entry I marked is a failed second entry short, which squeezed a lot of shorts out. This is probably why it spiked sharply up (first leg), thereby retracing nearly all the loses from the fall. This spike was way to steep, so you would expect a correction to the downside. It is difficult to decide where to enter long in such a correction, so my second marked entry long is at the small breakout level (10750) from the first spike up. This is where a lot of traders would place their break even stops if they got long above that breakout. BTC did make a bullish candle at this point which could lead to the expectation of a second leg up. Right now BTC has established a spike and channel formation, which is just a upward pointing channel after a spike up.
BITFINEX:BTCUSD
by FBlocktrader
Bitcoin range trading after break of downtrend (HowTo)After the break of the big multi day downward channel, Bitcoin has established a range, or rather a broader upward tilted channel. This sideways movement can be expected after a strong downtrend. In the chart I explain how to trade this range. Right now the strong correction to the upside has nearly completed its second leg up and is making a new high. When prices reach 13.200 it will be interesting to see what happens: Bitcoin could continue in the range like sideways channel, with a possible downmove to 12.000. Or it could establish a stronger uptrend and squeeze more bears. Right now I don't see a good entry.
BITSTAMP:BTCUSD
by FBlocktrader
How to trade strong downtrends in Bitcoin with Price action.We had a strong correction in the major cryptocurrencies. Bitcoin and Ether and other liquid assets like Ripple traded pretty much in sync. So this price action technique can be applied to all of them. In the chart I briefly explain in the notes why theses short entries are within my price action rules. The covering of the positions take place at support/trendlines or price targets from second leg projections. Right now the market has broken the downward trend channel and is moving sideways, which can be expected after such a major downtrend. But there is still a risk that after the break of the downward channel we might get a retest of the low in the next days, before a new bigger uptrend can evolve.
BITSTAMP:BTCUSDShort
by FBlocktrader
BitCoin BTCUSD - Breakout over $800 -- Target $811 - PT LessonHere is a small display of how to measure a price target of a breakout after an initial flag or pennant forms... These short-term patterns often reflect the rally's halfway point and are great opportunities to test your price targeting ability. The rest is easy, measure the length of the pole portion ($11.23 is the dollar value of the move) and than measure and add the same value (in dollars, not % as it changes ever so slightly) to the breakout point of the flag or pennant you measured! If it hasn't broken out yet, just pick between 1/2 and 2/3 along the flag or pennant and go from there. Even that isn't necessary, it all depends on your level of OCD and anal retentiveness :p Happy Trading!
BITSTAMP:BTCUSDLong
by Kantardziski
How To: Trade Support & Resistance Like the ProfessionalsHello traders. It is a statistical fact that upwards of 90% of retail traders lose money in the Forex market. There are many reasons for this, but perhaps the most important reason is entry. Retail traders often get terrible entries. Even if they are right, their entry may be so poor that their opportunity for profit is not enough to make them consistently profitable. If 90% of retail traders are losing, then that must mean 90% of institutions are profiting. Why is this? What makes institutional traders better than retail traders? Well the main reason why institutional traders are better is because they have access to research that retail traders simply don't have access to. The institutions that employ these traders also employ teams of analysts whose sole responsibility is to analyze the market to ensure the profitability of the institution's traders. However, another very important aspect of their success is that they do NOT wait for confirmation, trend line breaks, patterns, and signals from indicators when trying to enter the market. Institutional traders look for specific prices to buy and sell at and they place their orders at those levels. In a trending market for example, such as this USDJPY over the last month, institutional traders will be looking to buy dips. They won't be waiting for price to form a low and then enter the market because that would be chasing price... that would be retail. Institutions let the market come to them, they find specific prices that reflect good value for buying given the market condition. You can see on the chart all the points at which major higher lows formed throughout this uptrend. As you can also see those lows in just about every instance match up perfectly with the previously broken high. That is no coincidence. For a market to form a major swing high in an uptrend, there must be a lot of money selling the market at that price to push it lower. Only institutions have enough buying/selling power to move price and form such a top so if a high is formed it is because it was at a price level where institutions were previously selling. If price then breaks out to the upside and forms new highs, institutional buyers will then look to buy that same price that they previously sold at. It seems very basic... and that is because it is. Institutional traders only look at price action. Retail traders are the only traders who complicate things by using patterns and indicators and that is precisely why so many of them fail. Keep your charts simple... don't wait for confirmation or signals... let price come to you. Think like an institutional trader now like a retail trader!
Education
by UnknownUnicorn261897
22