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Liquidity Pool / Stop Loss Explanation POE SignalA group member had a question about why the stop loss was "so low" being 23% under the buy price. The reasoning is you need to avoid the liquidity zone, where price could easily be pushed. The purpose of our stop is to exit the trade if its no longer valid (not get stopped out only to see a pump happen afterwards). This could be another accumulation cycle, so we want to ride out the potential for a dip. As normal traders we normally dont have to deal with extremely large positions. But the whales/institutions who do have to think about liquidity very differently than you or I. Order flow intersections are what they look for. They have to go TO the liquidity - which is many times where people end up placing their stops. They cannot simply accumulate or distribute a large position whenever and wherever they wish. Rather, they must look to those levels where liquidity is aggregating, and stops are helping them in an indirect way. Without a Support/Resistance Finder (SRF) to help you, you can also/alternately use a volume profile as shown. SRF auto plots the S/R lines for the current range (all the horizontal dashed red and green lines are done by SRF). You want to place your stop BELOW where the liquidity is likely located - and also where your trade idea is invalidated. In the opposite sense there is a liquidity zone above as well. Many times you will see price probe the same levels over a few days. This is testing the resistance and seller appetite. You can see this here in the 210+ area as price has been probing the upper resistance.
PEducation
by theheirophant
1
Bitcoin Daily Update (day 236)My most recent Bitcoin Bubble Comparison - 3 Day Chart led to the following calls: < $5,750 by 11/15/2018 & my prediction for the bottom is $2,718 by 1/20/19 | | Calling for $35 ETH before the end of 2018. Previous analysis / position: Examined whether or not the descending triangle is still valid since it has move past 75% completion / Short USDT:USD from 0.0968 | Short ETH:USD from $201.85 | Orders to add at $194.90 and $187.70 Patterns: Coil (no longer calling for descending triangle due to moving past 75% completion) | Symmetrical triangle from 10/8 to 10/27 has broken down Horizontal support and resistance: S: $6,387 looks about as strong as Popeye without his spinach | R: $6,413 BTCUSDSHORTS: Finding support from bottom of symmetrical triangle Funding Rates: Longs have been paying shorts 0.01% for weeks. What happens when shorts become more in demand than longs? Short term trend (4 day MA): Today’s candle closed below, Currently being tested for resistance Medium term trend (4 week MA): Price right on top of MA Long term trend ( 32 Week): Bearish Overall trend: Bearish Volume: 3d and weekly candles are on pace for record lows FIB’s: 0.618 = $6,530 | 0.5 = $6,441 | 0.382 = $6,351 Candlestick analysis: Last five daily candles: shooting star, hanging man, hanging man, shooting star, hanging man. Doji forming on current candle Ichimoku Cloud: Testing 12h cloud for resistance. A close inside the cloud would be very significant. TD’ Sequential: Too choppy to glean anything Visible Range: Looking back to September 6th (when this range started) point of control at $6,400 and two high volume nodes from $6,386 - $6,464 | This is also the highest liquidity zone for all of 2018 Price action: 24h: +/- 0 | 2w: +3.11% | 1m: +0.015% Bollinger Bands: Haven’t had a daily close above MA since 10/9 Trendline: Even though I no longer consider this a descending triangle, I still view the trendline as extremely important. Small symmetrical triangle brokedown and has held as resistance on the retest Daily Trend: Chop Fractals: Up: $6,792 | Down: $6,057 RSI: Stuck at 50 Stochastic: Find it interesting that the daily is starting to diverge following a bearish crossover at 50. Summary: If it was one month ago I would be rushing out to add to my position due to the symmetrical triangle breaking down, and holding as resistance on a retest, in combination with the thick 12h ichimoku cloud at $6,400. I would have cancelled my stop order at $194.90 and I would have added at around $200. All of my rules would have been met: original position is in the green, and over 24 hours have passed since the initial entry. Getting a better price than planned and checking off my best practices would have been more than enough reason for me to justify that move. Now I am starting to realize the error in that approach. It is a mistake to over expose oneself at the same price and this is a prime example. I prefer to enter in thirds and only add when it’s making a move. Until ETH’ breaks down $195 and BTC’ breaks down $6,375 then we are still stuck in the same trading range. Adding another third of my position while still in the same range is overexposing myself to that price / position. It doesn’t matter if the original position is in the green if the price remains locked in the same trading range. My new best practice will be waiting to add to my position until I can move the original stop to breakeven. Let’s use my current ETH’ trade as an example. If $10,000 desired position size then Enter $3,333 at $201.85 with $206.60 stop loss. Set stop orders at $194 and $187 to add $3,333 to the position at each price. If $194 order triggers then move original stop to $201.85 If $187 triggers then move original stop to $194 and move second stop to breakeven Trail stops again once/if price breaks down a further 10% With targets of $100 and $35 that approach should work out very nicely. It will allow me to increase my exposure without taking on more risk. This should also greatly limit myself from becoming handcuffed by overexposing myself to an asset that isn’t moving or is moving against me. Now that the plan is outlined it is time for the hardest part: waiting
BITSTAMP:BTCUSDShort
by Sawcruhteez
How To Calculate Pip Value, Risk & Trade Size TutorialHey Traders, in this idea we are going to break down step by step, how a professional trader calculates pip value, risk and trade size. The focus of this lesson is aimed towards helping you get an idea of how you can create your own risk management plan in order to remain consistently profitable over a long period of time. You can have the best strategy in the world and still lose consistently without a solid risk management plan. In fact, in my personal experience with teaching traders, I have found that many traders who do not succeed are actually using a profitable strategy! These traders would have made money if they followed their risk management rules but that tends to go out the window when we do not see how the numbers work out for ourselves (among many other reason). It is important that you use these calculations that I have broken down on these charts over and over again until it makes perfect sense to you and then apply them to your own trading. If you do nothing else at least make sure the numbers work for you! I hope this short tutorial helps you get started on creating your own risk management plan and please be sure to comment below with any questions you may have. If you like this tutorial please give this lesson a thumbs up and I will cover more on this topic In a future lesson. Thanks Traders, If you would like access to a spreadsheet that automatically calculates all of this for you, please request one using the link below and I will send you my personal spreadsheet for free. goo.gl Also if you have not done so please follow me at TradersNsights Facebook page as I plan to start posting daily market updates and predictions over there that may be helpful to you. www.facebook.com
Education
by Alec40
17
Bitcoin Daily Update (day 232)I believe that it is possible to beat the market through a consistent and unemotional approach. This is primarily achieved through preparing instead of reacting. Click here to learn more about how I use the indicators below and Click here to get my complete trading strategy! Please be advised that I swing trade and will often hold onto a position for > 1 month. What you do with your $ is your business, what I do with my $ is my business. I recently posted Bitcoin Bubble Comparison - 3 Day Chart . It provided new dates and prices for the bottom, however it’s still slightly too early to abandon my predictions from the previous Bitcoin Bubble Comparison ]Bitcoin Bubble Comparison: 1 day - 5 days = < $5,750 | bottom prediction: $2,860 by 10/30 | | Calling for $35 ETH around the same time Previous analysis / position: Left a comment on October 18th’s post saying that I wouldn’t be able to do the daily update and that I was watching the 4h TD Sequential and Stochastic. Still felt good about short positions due to $6,400 holding as strong resistance / Short BTC:USD from $6,367 | Short USDT:USD from $0.968 Patterns: Descending triangle / hyperwave Horizontal support and resistance: S: $6,400 | R: $6,428 BTCUSDSHORTS: Appear to have created a lower high without re tested top of triangle Funding Rates: Longs pay shorts 0.01% Short term trend (4 day MA): Broke through 4 but now pulling back below. Wait to see where it closes before considering it bullish Medium term trend (4 week MA): Bear Long term trend ( 32 Week): Bear Overall trend: Bear Volume: Last few days have been well below MA FIB’s: 0.618 = $6,530 | 0.5 = $6,441 | 0.382 = $6,351 Candlestick analysis: Bearish spinning tops, today forming bullish spinning top Ichimoku Cloud: Fell out of 4h cloud, but still has not gotten kumo twist or bearish TK Cross. 1h cloud shows a lot of resistance from $6,400 - $6,480 TD’ Sequential: 4h: G3 | 12h price flip Visible Range: Showing strong resistance from $6,400 - $6,800 Price action: 24h: +0.57% | 2w: -2.72% | 1m: +0.5% Bollinger Bands: Continuing to resist daily MA Trendline: Top of descending triangle = $6,670 | Phase 2 hyperwave = $6,000 Daily Trend: Chop Fractals: Up: $6,792 | Down: $6,057 RSI: Hanging around 50 on all time frames Stochastic: 4h starting to rally after calling a good buy. Daily is recrossing bearish after a double top Summary: I entered based on the 12h red 2 below the red 1 in combination with the button top. Based on that entry I should be setting the stop loss above the 12h red 1 at ~$6,501. That is only 2% risk and there really isn’t reason to set it tighter than that. After taking a number of losses I start to second guess my entries and stop losses. Sometimes I have an inclination to tighten the stops due to be afraid of losing and other times I have a tendency to really widen them due to being frustrating from getting whipsawed. The last couple weeks have been a lot of the former. Instead of using the stop loss that the TD’ Sequential trading system outlines, I used an approach from Wyckoff. He states something along the lines of: “When there is a breakout / breakdown of a trading range and the price quickly returns to the middle of the range then it was likely a fakeout” I entered on the $6,400 breakdown and figured that a return to > $6,450 would indicate a fake breakdown which usually precedes a strong rally. So I set my stops at $6,451 on BTC’ and $204.2 for ETH. Fortunately the BTC’ stop didn’t trigger, unfortunately the ETH’ stop did and there was not the follow through that I was expected. As it stands now I was stopped out on the very top on a 1h wick (which was a green 9). Trading successfully long term is much more about losing than it is about winning. Prolonged losing streaks will challenge your motivation, confidence, sanity, and finances. Risk management is only one piece of the puzzle. The other part is emotional control, and I could argue that is even more important. You can tediously manage risk 99% of the time, but that won’t matter if you let your emotions get the best of you on the other 1%. I have found two very important ways to help control my emotions after taking a string of losses. First I shut off the computer and take a day off. I go outside, socialize and gain some perspective. Then I come back re charged and ready to get back in the trenches. Another thing that really helps is not adding to losing positions. It can be very tempting to add at a better price when a position moves against you. Controlling that urge will help to minimize losses and maximize wins. Furthermore it will cause less stress/anxiety when things are going your way. Set the stop loss then forget about it! In regards to my USDT:USD position, I feel comfortable holding onto that as long as BTC’ is rallying. If it starts dumping then I will look to exit that position. I went to a bbq last night and today I am playing in a golf tournament. By this time tomorrow I expect to feel fully reinvigorated.
BITMEX:BTCUSD.PShort
by Sawcruhteez
1
ICX appears to be within an Ascending Triangle pattern.ICX/BTC appears to be within an ascending triangle pattern. This type of pattern is usually bullish. I've laid out a few scenario's of what I think will happen. Scenario 1 (Green Arrow): ICX/BTC bounces off the sideways support (around 1000 sat's) and moves to the upside breaking through the top of the ascending triangle (around 1090 sat's), of which the target area would be around 1250-1300 sat's. Scenario 2 (Yellow Arrow's): ICX/BTC bounces off the sideways support and moves to the top of the ascending triangle pattern before getting rejected again. It could then retest the sideways support a second time before moving up and breaking out of the top of the ascending triangle and then starting its move toward 1250-1300 sat's. Scenario 3 (Red Arrow's): ICX/BTC fails to hold the sideways support and breaks to the downside. Additionally, it could successfully hold the current retest of the sideways support, move up to the top of the ascending triangle, get rejected, then fall back down to the sideways support line before eventually breaking through it to the downside. If this occurs, I will be watching 850 sat's as a possible area of reentry, and if that fails to hold, then 790-800 sat's. (790-800 sat's was the bottom we hit back in mid August, and was the springboard for it's move to around 1450 sat's in late August.) RSI on the 4-hour is seeing a little movement downward, but it's fairly neutral otherwise. Daily RSI is neutral for the most part. MACD on the 4-hour did get a bearish crossover around 11 PM on October 3rd, indicating a potential for more short-term downside. Daily MACD got a bullish crossover around September 20th, and the Weekly MACD also got a bullish crossover around September 24th which could indicate upward movement on a larger time frame. To go along with that, Stochastic on the 4-hour is oversold, and could see a turn-around soon. Daily Stochastic got a bearish crossover today, but that might coincide with our retest of the sideways support line, so I'm not reading too much into it, especially with the 4-hour Stochastic oversold. As always, keep an eye on Bitcoin and it's price movements as well, since it can be a major influence on alt-coin movements. Entry: 998-1015. Target: 1250-1300. Stop-loss: 955. --This is not financial advice or financial recommendations. This is merely my opinion. Do your own research and come to your own conclusions before buying/investing. I am not liable for any losses incurred.
by Deftsuo
BTC Update! Recognizing support & resistance levels!Good evening everyone! We had about 48 hours of nothing occurring since last update. Two charts ago we were watching to see which side caved with the 3 supports in $6400's and 3 resistances in $6600's. The bears won that battle and sent us down to $6399 which is when I entered some positions, using $6320 as my stop loss based on the next support level. We then saw a rally up where again, we knew we had 3 resistance spots of $6610, 6640, and 6642. This has me taking some profit in the upper $6500's just to lock the profit in and recognizing potential resistance spots. We topped out at $6603. Last chart I discussed just having patience with the remainder of my position and if bulls could not break the resistances, I'd be watching for a 4 hour higher low to be formed and this would then become an updated stop loss area just to protect profits. Bulls established that at $6511 on the consolidation. And finally after literally no movement up or down for a while, we saw the bulls try and make their move. They rallied straight to, you guessed it, resistance. $6641 is where this move topped out. I personally left my position in tact as was not at a computer to move from SL to profit taking but do not believe I would have exited anyways. At this time, I'll ride the stop losses to protect profits and wait to see if the bulls can prove themselves and get above the resistance spot now at $6641 and $6642. So we essentially have a triple top including $6640 from before. Ok, so am I bullish or bearish? Overall I am neutral because the weekly remains in an equilibrium pattern. So let's weigh some positives and negatives of current market. Positive, bulls got above the high from 2 days ago at $6603. Negative, they still could not beat the 3 resistance zones, getting ahead of $6610 and rejecting hard with the triple top. Negative - the upper wick on the candle screams profit taking just as it did before. I'll keep a few stop losses loose personally just to avoid the market makers fishing for those stops as this market continues to be easily moved with thin order books. Market is in a bit of a channel currently as well so I am keeping a close watch on that. While I'll happily stop out if higher lows are lost and protect my profit, I'd then be watching the channel to re-enter positions and use the channel as a SL if needed. Lots of ways to play this market but overall its currently a market I am not dedicating a ton of time to as the moves have been small so a couple of checks on the chart each day just to see where things are and if I need to adjust stops or alerts. Just My 2 Sats!
COINBASE:BTCUSD
by My2Sats