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NZDUSD - News predictionThis will be my first "public" post reacting to news events beforehand - using a few key indications that make up my assumption. As you see here on this chart, marked by the cyan up arrow, my prediction is LONG for this pair. What did I see to make this choice? Divergence, Support and Resistance, RSI Level, Market Structure and Candlestick Patterns. This is not meant to be taken for advice on trading but more of an example of how one can predict news. Thank you to all who've remained patient and not left me - haha! Let's see if this plays out.
Long
by xEbenx
Chop is bad? Daytrading the swings (Concept Of Pain)"A choppy market is bad, can't make money in this erratic sideways movements..." I often read these statements, but is it true? Not if you can trade a 800 point range in Bitcoin and make money from the swings intraday. The key to trading with price action in a range is to buy low and sell high. Of course that sounds trivial, but it is not, because the market tries to trap people into thinking that the range is over and done. So a lot of traders start thinking " new strong trend" and buy high or sell low, expecting the trend to go on. These breakout points often look very bullish/bearish and it may feel "easy" to go long/short at these points, but they are the worst places to enter long/short. So always ask yourself "what can the market at this point do to inflict pain, to cause damage?"... The concept of pain in intraday trading is extremely important, because what do you think drives prices intraday when there are no news? It is just a game of fooling other traders and to trap them in the wrong direction. When people can't stand the pain any more and close their position because all hope is lost, then the markets turns and goes straight to the point where they may have thought it would go. So try to think tactical all the time: Where are breakeven stops or stop loss levels of "easy" entries? Prices tend to go there! Sorry for that philosophical rant, but it is the weekend and I felt like sharing my philosophy :) Now we get down to business and look at some price action entries (numbered arrows): Trade 1: After I wrote in my last posting (see link below), that I expect a sideways movement and a target of 9600, there was a short entry at the top of the range. At this point some people might have thought we have a double bottom at 9750 and a new uptrend, but I there is often a third test or a new low (9600). Notice how bearish it looked at 9600, a lot of longs might have been closing their position at this point. Next thing you know prices rise to 10.000 again...the concept of pain, remember? Trade 2 + 3: Prices now are moving in the range again. The breakeven stops from the early longs at 9700 have been taken out, the second leg up can start. That would take prices near the top of the range again (10.100). Trade 2 is more aggressive than Nr.3, because there is only a small double bottom and a bullish candle. Trade 3 is a failed second entry short in a steeper short term uptrend. Trade 4: This short illustrates the concept of pain again. We now have seen a break of the steeper uptrend from trades 2+3, then two legs up to a new high: This is where you expect a move down. Prices also climbed right to the top of a possible broader uptrend channel (acting like a range). As a skilled price action trader you look for an aggressive short entry at this point, while others are crying "moon" because of the uptrend and the breakout above 10.250. Trade 5 + 6: Now a all the "easy" long entries (above Trade 3) have seen their breakeven stops hit, the concept of pain again! The market has moved down in two legs to the lower side of the upwards tilted channel at 9.900, it sure looks bearish again, right? Meanwhile a lot of people are short again and may already look for a retest of the low at 9.600. But that would be too easy, so the concept of pain strikes again! Prices rocket up in a steep trend making a new high (10.500). The powerful trend is now fueled by all the stops from shorts who need to exit. Again trade 5 is more agressive than trade 6, both can be seen as failed second entry shorts, but at trade 6 there is already the steep uptrend in play. Trade 7: Up there people think long, we have a strong uptrend and a new high and higher lows, right? The same price action pattern as always: After the break of an uptrend and two legs to a new high you should be careful about that long position ;) The space for text here is limited, continues in update...
BITFINEX:BTCUSD
by FBlocktrader
2
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
Correction incoming? How uptrend breaks fool peopleWe saw nice gains in the last 6 days, but was it easy to think long all the time? BTC has pulled off two times the exact same trick to fool people into thinking bearish! That pattern is "designed" to make it look bearish and get longs out and draw shorts in. Then of course another big uptrend starts, fueled by people who buy in again and stops of shorts being hit! In the chart I have shown how the structure works: 1. There is a nice big 1.leg up, clearly uptrend 2. Then several things happen, which make it look bearish: - break of the uptrend line - prices move below EMA - 2 legs down (red arrows) - finally there is even a support broken after two legs down 3. Now a (big) bullish candle marks the start of a new upward move, which then establishes a new 2. equal length leg up Conclusion: If you see an "easy" short entry after a strong uptrend in Bitcoin, think twice and do not expect a big reversal right away. These bearish structures are often the start of the 2.leg and can be very profitable entries (green arrows), but they are "harder" to take because of the more scary bearish signs. What is happening right now? Prices have reached the target of the last 2.leg at 11650. A little double top at 11550 was broken and we have a clear uptrend channel. It might look like super bullish, but this often a point from which a correction starts. The first downside target would be the 11240 level, which is the breakout area. There is also a possible bigger range, which gives a target of 10800.
BITFINEX:BTCUSD
by FBlocktrader
2
Difficult market? Two important price action concepts help!BTC has moved sideways now for some time, prices swinging up and down. A lot of choppy behavior with several tricky moves. There are two important "secret" concepts that can help you find entries in nearly every market condition. By having these skills you can often avoid having the market confuse or trap you! Concept A): After the break of a trendline, there will be one or two legs to a new low/high. Why is that working? It just traps people who entered after the break, looking for a reversal. When a new high/low occurs they might get stopped out and think the trend continues, just when the real trend reversal begins! Additionally other traders enter when prices brake out to a new high and low, only to see prices reverse. Now they are trapped to the wrong side. Concept B): Second entries. This is just two pushes (two legs) against the trend direction. When prices pullback in two legs and then make a second attempt to go in trend direction it is a second entry. Why do these work so well? In an uptrend people see a lower high, then a lower low. Now many think bearish and suspect a reversal, the beginning of a new downtrend. New shorts also come in, hoping to catch a new downtrend early. Of course then the uptrend continues, hitting stops of shorts. Also skilled traders go long, driving prices further up. These two vital concepts require some experience, but you can find such entries constantly, because trends also occur inside broader ranges/channels as we can see in the Bitcoin chart. I have numbered 5 entries which can be based on these concepts + other clues: Trade 1: Short -> Concept A + bulltrap Trade 2: Long -> Concept A +B + retest support from breakout Trade 3: Short -> Concept A + pullback to EMA + trend channel test expected Trade 4: Long -> Concept A + B + successful retest of uptrend channel Trade 5: Long -> Concept A + B + pullback to EMA + retest support from breakout What is happening right now? We have seen a strong breakout and two legs up. Prices have also overshot the broader trend channel! Now it looks like a new steeper two tiered channel is in play (with a midline). We are trading at the upper end of this channel, so maybe BTC will retrace to 9500 again, but do not look for short entries in such a strong trend! Feel free to comment or ask questions! Or just follow me ;)
BITFINEX:BTCUSD
by FBlocktrader
4
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
Stumbling the EURUSD legs by the dayKEEPING THINGS SIMPLE ON THE EURUSD (1 day, log scale) -the April/May negative divergence worked out -price was meeting resistance in June turned down as expected -at the time, RSI was just slightly at overbought levels (I would prefer a larger RSI overbought reading for a start of an uptrend) -we are seeing lower highs and (less pronounced) lower lows - breaking of the trendline was followed by a pretty violent retest, all the way to 1.12 In all & until proven otherwise: EURUSD on the daily switched from neutral to bearish some time ago, and there's no way to look at it as being bullish. Surely, it will bounce off here and there , but all action looks to the downside. First target remains: 1.0820, thereafter possibly a retest of 1.0520 / 1.0450 A breaking of the RSI support-line will be indicative of this
Short
by JohnLaw
2