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Bullishmomentum

Bitcoin: Structure Worth The Wait?Bitcoin update: Since the exit of our long swing trade two weeks ago, this market has not offered any worthwhile opportunities to get back in. So we have been doing what we do best: WAITING. Waiting is actually why our swing trade performance across multiple markets is in the green. Waiting is what pays in the long run and NOW Bitcoin is beginning to provide compelling reasons to pay closer attention for a new setup to go long. The 3550 and 3700 levels are where we have been anticipating support. We have been writing about these levels and sharing a lot of insight about the recent activity with our followers over the previous two weeks. The point of our message has been: just because a bullish candle alone may show up in the right location is not enough of a reason to get back in. What we need to see is a better defined structure. And today, that structure has established itself. The Bitcoin chart is now showing a failed low formation in a general area of support. It took a few weeks, but THIS is what we WAIT for. Now it is a matter of identifying some form of confirmation. This is where momentum continuation patterns come into play. Candlestick patterns like a bullish pin bar or inside bar would be a welcome confirmation at this point. If the market provides the criteria we need to enter, then our targets would again be in the low 4Ks. We don't react, we WAIT. Now what can go wrong from here? The risk that we carefully consider is the fact that Bitcoin is still fluctuating in the middle of a very wide range. Inside such ranges, follow through is often limited. We would rather miss a few small profits in order to avoid constant losses generated from over trading and getting faked out. In summary, with the failed low in place, we are much more interested in continuation patterns that develop. Another positive that adds to this context is the Litecoin high. Andrew has been on top of this and highlighting its strength since the break out at 34. This makes the Bitcoin price action even more credible since it provides some evidence that there is buying across the board. Trading more in this environment is not as effective as WAITING more.Bitcoin has not met our criteria of being in a broader trend, and until that occurs, we remain cautious. We WAIT. Patterns and setups are not created equal. Some offer a higher probability than others and weighting them is a function of knowing the CONTEXT of your environment. And knowing the quality of your environment is a function of asking the right questions. Many new traders often want to know the best way to learn this framework of thinking and my answer is: learn to play Poker. It is more than just a game of bluffing. It is a game that requires adjusting your betting based on a multitude of variables that change as each betting round unfolds. In Poker, just like in market timing, a strong hand or a good setup can lose its value quickly. You must be able to recognize when it is better to throw that hand away even with a small loss and WAIT for a better situation. You can learn more about decision making from Poker than you can from watching a chart. Whether you are playing cards or timing a market, learning to WAIT is the best skill you develop. Learn the art of the WAIT.
BITSTAMP:BTCUSD
by MarcPMarkets
12
Litecoin: 48 And 56 Key Levels For Profit Taking?Litecoin update: I have to give credit to Andrew on this one because he has been calling this long in our chat room since it broke the 34 resistance. And now that Bitcoin has spiked higher (our first profit target at 3825 was reached), Litecoin appears to be on the move again. Andrew actually shared some valuable insight around the higher low and break of the 41.89 level as well for a continuation trade. For those who missed this, now is NOT the time to start buying, especially for short term swing trades. The 48 resistance if anything is a level to lock in profits. The other factor to be aware of is: there is a potential double top formation here. If Bitcoin starts lingering again, LTC is in a position to fake out. That does not mean that it will, it is just that the reward/risk is no longer favorable like it was at lower levels. The next key resistance is the 56 area which is what we are considering as a target when the next long setup appears. Overall, I can't say it enough times: PATIENCE PAYS. All during the bearish environment we were extremely conservative, very selective with our trades and MISSING out on some small moves while avoiding persistent losses. Now as the environment improves, we are in position to profit, not climb out of a hole.
BITTREX:LTCUSD
by MarcPMarkets
2
Bitcoin: Structure Still Says Strong. 4K In Sight?Bitcoin update: Price continues to hold up and is now taking out the minor bearish trend line that has been in place over the previous week. It is nothing to get overly excited about, BUT it does add to the argument in terms of further strength. This entire space is not exciting enough to attract a constant flow of new money, so it needs surprise news or catalysts in order to make any significant progress. This limits the effectiveness of technical analysis but does not render it useless. The news about the SEC's comment about an eventual "ETF" and now JPM's creation of their own currency are certainly positives for the future of this space. And judging from the recent price action, again the short term patterns may not be very reliable, but the broader structure is. After the news spiked the price over a week ago, it has been lingering lower, but not decisively so. We have been explaining to our followers that as long as Bitcoin does not give back the gains made by the large bullish candle, strength persists. Even in the face of increasing short interest. We carry long term inventory and a short term swing trade. In order to be in on the next leg up, you just have to be in and wait for the next news item to come out and surprise the herd. Bitcoin is a very emotional and ignorant market and the smart money knows it. And they use this to their advantage with the use of market moving information timed at their convenience. Just from my observation, there are many examples of analysis all over the internet that over complicate this. Perhaps they do this in order to attract attention since "more is better" appeals to the majority of investors, traders and gamblers. For us, the situation is very simple: Either Bitcoin takes out the 4K resistance area upon its next catalyst, OR it takes out the 3350 area support. Based on recent structure, price appears to be poised to go for the 4K but we also know that ANYTHING can happen. Some news item can appear out of no where that sparks a push to 3250. You cannot predict these events, but you can prepare. In summary, when it comes to timing any financial market, everything is about "IFs". IF Bitcoin pushes into the low 4Ks, we have profit targets in place to capitalize on the move. IF price takes out 3350, we will be stopped out of our swing trade, and we then wait for the next setup to get back in. IF price takes out 3250, we step aside until stability can reestablish itself. That is our plan in a nut shell. Market timing is about having a process and following it. Our process considers many variables, and we make every effort to simplify each step in order to minimize indecision. There comes a point where there are compelling reasons to still be in a trade, and when there are not. At the moment, Bitcoin still provides a compelling argument for longs even though price appears to be static for prolonged periods. Even though this is a primarily event driven market, that doesn't mean charts are useless, it just means you need to recognize the value behind the subtle clues that are still available. Do not make it more complicated than it is: higher lows often lead to higher highs.
BITSTAMP:BTCUSD
by MarcPMarkets
7
Litecoin: Looking To Add Around These Supports.LTCUSD update: After a nice short squeeze, price is slowly drifting lower to where it may even attract a lot of bear talk. We are actually using this retrace as an opportunity to add more to our long term portfolio. Although the 41 area may still be a little high, we are specifically watching what kind of price action develops around the 40 level (psychological and historical support). IF price breaks lower, the 37 and 35 areas both offer high probability support areas as well. As long as this market does not give back the entire break out candle, we are anticipating a broader move higher in the coming weeks. Since we called the aggressive break out around the 34 level, this market has been more of a leader than a follower. Relationships are ever changing in this space, but while it stays intact, we will continue to align our expectations and strategies.
BITTREX:LTCUSD
by MarcPMarkets
2
SAN In Your Plan? Chart Says It Should Be.Here is an alt coin that is not as popular as some of the other cheap ones, but the chart is very clear and compelling. A chart is a chart, no matter how irrational or ridiculous the fundamentals may be. Compared to alts at similar prices like XRP and IOT, SAN is exhibiting greater relative strength and bullish structure. A retrace to the .39 and/or .28 support areas are the location to look for potential position trades as the entire space slowly recovers. .72 would be a reasonable target. We do not own this alt, and we have not called any specific trade ideas for it. This is just to highlight an alt coin that is showing greater technical potential compared to its peers.
S
by MarcPMarkets
3
Bitcoin: This Formation Hints At Broader Recovery?BTCUSD update: Recent price action has printed the beginnings of a significant change for this market. The appearance of the descending wedge followed by a sharp price spike is a sign that the underlying selling pressure that took this market below 6K is now losing its grip. This formation viewed in light of recent highs in short interest and a close proximity to a major psychological support (3K), opens the door to a more bullish environment ahead. Pattern recognition is a key behavior when it comes to using technical analysis effectively (not relying on oscillators). This is the case because chart patterns serve as a gauge for crowd sentiment in terms of order flow. Chart patterns alone can be random at times, BUT when they develop within an isolated context, they can be invaluable when it comes to anticipating how the herd will react next. Descending wedges are one of those uncommon patterns that signal the exhaustion of a trend. And the one on this chart (along with most of the alt coins) is of a large degree (took weeks to develop) and completed near a major support level. Now that an initial rally has materialized, our focus is to look for the development of a broader support structure over the next few weeks. The larger degree structure that we would like to see before considering accumulating more inventory would be a higher low. Along with that, the 3600 and 4500 resistance levels would have to be decisively taken out. Until this scenario develops, we will continue to maintain a strong defense. Often we get the question: If you think its going higher, why wait for 4500 before buying? The answer is: risk. If we had NO inventory, then we could justify some buying at such attractively low levels. Having rules to control risk is more important than "buying the bottom" and has saved us a ton of money as this market may new low after new low. We are open to taking smaller time frame trades such as aggressive swing or even day trades to capitalize on an initial recovery. Since the exposure is much more limited, these activities fit within our defensive framework. The key to coming out ahead is tight position management and taking profits while they are available. It sounds like common sense until your greed enters the picture. The current inside bar formation may lead to such a trade signal (break above 3600). In summary, Bitcoin is finally showing significant signs of building a recovery. It still needs to prove itself, but at least the current formations provide a context to measure against. Remember tops and bottoms are a process and develop over time. Can this market continue lower? Sure, anything can happen and that is why we ALWAYS maintain a flexible mindset. This is what helped us preserve our capital, especially after the 6K support break. Amateurs struggle with being "right" while professionals adjust to probabilities. And based on the current structure, the bias is shifting from bearish to neutral. This does not guarantee a recovery, but if a recovery is going to unfold over the next few weeks, there is a greater chance that this is the beginning. You don't have to be right, you have to be flexible. Let the market provide the proof.
BITSTAMP:BTCUSD
by MarcPMarkets
16
BTCUSD: The Road To 7K Begins Here?Bitcoin update: The break out to 7K is now in progress. We issued a swing trade idea to go long which triggered around 75 points ago. Now it is a matter of waiting for our target (lower than 7K). As long as the newly established minor bullish trend line stays intact, it is within reason to see the low 7Ks relatively soon. Compared to other "experts" who were more active during the hard money, we only sustained two stop outs since August. We preserved our buying power which now puts us in a position to effectively capitalize on the opportunities ahead while many are trying to recover from a deficit. If you can't keep what you make, then this is nothing more than an expensive hobby. So what's ahead? If this recovery continues, there will be plenty of entry opportunities. We are leaving our short term target in place in order to lock in profit and reduce risk which is in line with our best practices. At the same time, we have been accumulating inventory in some of the more promising alts that can benefit from a broad recovery in Bitcoin. We have been writing about and accumulating longer term positions in coins like BAT and XMR for weeks. If you missed all this, there is nothing to do but WAIT for the next setup. Buying highs is never a good idea even though this market has plenty of room to push higher. As price continues to go vertical, the risk of retrace increases dramatically while the relative reward becomes less attractive. The best thing you can do is formulate a plan in advance. We did not react to the market when we issued our Bitcoin long, we followed a particular plan. Just like we did for the two trades previously that were stopped out. Our plan also kept us out of a lot of noise and unnecessary losses. The plan does not have to be complicated, but it really should be your own. Following others is good to get ideas from, but ultimately your reasoning has to come from your own experience. Our plan is to ride this long to its target and then wait for the next retrace. It could be the mid 6400s, but that can change as price makes a new high. In summary, in a recent article I mentioned that we always consider sentiment from the contrarian point of view. Our recent evaluation (observing top Tradingview articles) shed some light on this coming break out. How? The majority of "experts" were bearish. Classic herd mentality. Successful market timing is about evaluating, adjusting, measuring and maintaining a sense of probabilities. It's the same for EVERY market, not just Bitcoin. Knowing your environment, how to play a good defense and how to manage risk across time frames has very little to do with the RSI or drawing lines on a chart. Market timing is more about getting into the "listener" mindset and recognizing what a quality opportunity looks like, not just on a chart, but also in terms of risk and probability. You will benefit more from getting more in tune with your decision making process and fine tuning it than you will from following an anonymous chart guru making outrageous claims. Learn to listen to price.
COINBASE:BTCUSD
by MarcPMarkets
19
BTCUSD: Breakout? Waiting For High 6Ks.BTCUSD update: A breakout attempt to 6480 fizzles out. This is nothing unusual for a tight consolidation. There are major and minor support levels established through the 6300 to 6K price area. As long as these areas hold up, we will continue to anticipate strength and hold our long for the targets. Even though price is not following through on the break out, it is still managing to hold the 6300 area. If you want to look at it from the Elliott Wave perspective, you can say it is a Wave 4, which often precedes one more attempt at the high (Wave 5). For us, this is a waiting game. We have been managing a new swing trade long for almost a week. Being patient with a position is just as important as being patient on the side lines. As many of the top speculators and investors are often quoted, "Money is made in WAITING". As long as the current structure stays intact, there is no reason to do anything else. The entire space depends on Bitcoin, and it is one of the only coins that still maintains a healthy long term structure. Price structure develops as a result of the collective order flow. This is the natural trail of money and will often shed light on the short term strength or weakness of the market. And this is what shapes our decisions, NOT RANDOM LINES on a chart, or nonsensical rumors. While we have always been long term bullish, our perspective shifts on the short term WITH THE MARKET. When both perspectives align on the long side, that is what allows us to justify risk on a swing trade. When they don't align we do something that the upsets the most ignorant of herd members, we stay on the side lines. We think like a casino, not a slot machine gambler. Even if price closes below the 6300 support, we will continue to look for long setups. The major number for Bitcoin is 5750 and so far, we are no where near it. We are always open to anything and acknowledge that it can happen, but until price action shows clues or evidence, we will remain long or looking for longs. In summary, for those new to this game, there is a different environment in play from a year ago. This is an institutional environment. They have the resources to keep price more or less in line for them to accomplish whatever agenda is at hand. Bitcoin is unregulated and probably lacks the most emotional intelligence out of the entire universe of financial instruments (just read some of the troll comments). This is the perfect space for institutions to exercise their power both on and off the exchanges. They are like the big stack at the Poker table, bullying the small stacks by going all in with then and eventually consuming their chips. THEY can AFFORD to BUY control. We on the other hand cannot. The MOST we can control is our BEHAVIOR. We don't have to play when conditions are the most unfavorable. We don't have to take big risks, and we can WAIT until probability favors our idea the most. Besides our behavior the ONLY other control we have is our RISK. This means having a strategy for POSITION SIZING, and knowing where to effectively place a stop. A big risk is not necessarily about putting a lot of money on the line. A big risk is about taking a chance when the most likely outcome is unfavorable. Like betting on the horse that is least likely to win. It offers the highest payout, but chances are you will lose. That is the lottery ticket mentality and does NOT produce consistency in any investment effort. It's fine for entertainment, BUT if you are looking to effectively grow capital, you must think more like the casino. High probability, but the payouts are small.
COINBASE:BTCUSD
by MarcPMarkets
13
BTCUSD: No Where Fast But Support Still In Play.BTCUSD Update: Price action continues to trade WITHIN A RANGE. The recent sell off only amounted to a 5% correction which is really not that big of a deal. At this point, Bitcoin has to choose a direction by taking out a significant level. Unpopular as it may be, we focus on the waiting game, not on over reactive and costly forced trades. True selling does not hold range supports, it breaks them. This market went from the 6600 area to 6100 in a matter of minutes and has simply stopped. While slowly making its way back into the middle of the range. If it is not weak, then it should be strong, right? Not necessarily. Again for those who do not have the ability to understand the way we evaluate markets, we make judgements and decisions on MARKET STRUCTURE. The thing to remember is not everything shows up on the charts, there are things like context and market internals that can also present red flags. Before the sell off, we were all about the minor bullish trend line which implied strength. On the day of the sell off, we noticed a glaring discrepancy in the prices between Bitfinex and Coinbase which is a reflection of the Tether situation (not obvious on a chart). We did not know the market was going to sell off as fast as it had, but we did issue a warning about taking precautions hours before the sell off. Our swing trade long was stopped out in the low 6400 area, and even though our outlook is still long term bullish, we are waiting until a clear sign of strength appears. A couple of small bullish bars do not meet our criteria for any new swing trades. So now what? Even though this market remains neutral, the current structure in place could be a bull trap. If the Bitfinex price cannot close beyond the well established bearish trend line, a retest of 6K is more likely. A close above the 6500 area would be an obvious sign, while a retest and failed break of the 5700 area would be much less obvious. Unlike so many, we know how to WAIT, and let the market come to us (which is why we did not lose 30% over the previous month). The market will choose and we will adjust. Please realize reacting to price information is unproductive. Just ask all the trolls who got short and are now a little uncomfortable while waiting for 3K. In summary, this market is NOT trending and must prove itself one way or the other. The levels are clear, it is a matter of letting it reveal its hand. If it's a bearish hand, we step aside, but if it's bullish, we have our specific criteria to justify a new swing trade entry. We follow a plan, not entertain our hopes, feelings and impulses. Those who prefer drama, there are day time soap operas for that (or the mainstream financial news).
BITFINEX:BTCUSD
by MarcPMarkets
33
BTCUSD: Structural Clues Lean Toward Bullish Breakout.BTCUSD update: Price action is going nowhere fast. A consolidation within a consolidation. A tough market for those who do not have the ability to wait. The question is: are there any clues as to which way it will break out? Just like trending markets do not continue forever, neither do ranging markets. Consolidations are an expression of balance in terms of order flow. Buying and selling pressure is generally equal. The thing is, eventually one side will be wrong. And that natural order flow should provide the momentum for a significant break out. Are there any clues or hints that may tip off which side is the right side? In terms of price structure, yes. And it comes in the form of a higher low formation. Higher lows often lead to higher highs during trending markets. In range bound markets, they may not offer the same likelihood because of the high amount of randomness, BUT they often appear before a break out. In the case of Bitcoin, there is a clear higher low in place at the 6450 area. Below that is the 6350 area which serves as the base of this structure that leans toward the bullish side. In fact the structure was compelling enough for us to take two swing trade long positions. One of them reached their first target, before stopping out on the other half for break even. As long as this structure (represented by the newly formed bullish trend line) is maintained, we believe the break out has a greater chance of being bullish. We are positioned for that scenario and anticipate a move to at least 7K. In summary, this is the type of market where brokers and exchanges make the most money from people looking for action every day. There is no action. Impatience and the need for action are expensive emotional conflicts that put people in a financial hole. When the better market returns, they have to spend their time and effort making money back rather than advancing the growth of their capital. These are the same people who blame the market, the whales and the exchanges for their problems. Meanwhile they do not realize their own mental framework is at fault. It all begins with having criteria, categorizing trades and waiting for the market to play along. This is what active listening is all about when it comes to adjusting and preparing for the next move. The fact that this is a game of psychology, not charts and numbers is why it is easy to understand the concept of "waiting" but so difficult to practice.
BITFINEX:BTCUSD
by MarcPMarkets
57
BTCUSD: The Break Out? Or Just More Noise?Bitcoin update: Recent price action has everyone excited, confused and most likely losing money. First the confusion set off from the recent outside bar, followed by partial continuation, but the lack of conviction still lingers. This is typical of a consolidating environment. Trying to catch the "big move" before the market provides evidence is a losing proposition. At S.C., we don't just interpret lines on a chart and call ourselves market technicians. We look beyond the lines and evaluate factors that dictate typical market conditions. By doing this, we have a much better idea of when our strategies are most likely to perform. Market environments play an important role when it comes to the success or failure of a strategy. That is why during strong bullish trends, all the current amateurs appear to be experts. Anyone can make money in a forgiving environment, but most cannot hold on to it when the market returns to reality. The varying level of difficulty that we have seen since February is a good example of a typical market. Anyone can learn to recognize basic setups, formations and signals. The common mistake is not evaluating these setups within the context of the environment that they appear in. We recognize the degree of noise in these markets and have the ability to steer clear. While the herd continues to chase the "breakout" that never seems to follow through, they exhaust their capital and confidence. When the market eventually makes a decisive move, we will be prepared to capitalize on the opportunities that follow. Meanwhile we exhaust nothing by waiting. At S.C., we remain long term bullish but recognize the short term conflict. We have defined particular scenarios that we are waiting for in order to take action and share these ideas with our community. For starters, Bitcoin needs to close above a recent resistance before we even think about adding risk to our portfolio. The more bearish scenario involves a test of the 6K psychological support or lower. Unlike many of the other "experts", we don't react to movements, we wait for the market to fit our criteria. In other words we let the market show its hand, not force its hand. In summary, knowing your environment is just as important as checking the weather each day. Why do we bother? So we can make a more informed decision as to what we should wear. Do we need a jacket? An umbrella? Or can we just wear a tee shirt and shorts? Why would you not attempt to protect your capital from the market environment the same way? The answers will not come from oscillators or small time frame charts. They come from being in tune with market sentiment as it expresses itself in varying degrees through price action. Professional landscapers are experts at mowing lawns. If they are so good, why can't they get the job done while it's raining? The environment is not conducive, no matter how skilled they are. So what do they do? They wait until weather is more favorable. Trade the same way.
BITFINEX:BTCUSD
by MarcPMarkets
24
ETHUSD: Higher Low New Strength?Ethereum update: A market that is weak sells off quickly. The bullish inside bar in this market is a sign of a fake out, and not a characteristic of weakness. On top of that, the current structure may be turning into a higher low formation. Bad for shorts. This is the first sign of improved structure since this market made an attempt in July. It is still too early to make any changes to our strategy at S.C., but it is certainly a welcome sign. The reason why it is too early to call this a bottom is because Bitcoin needs to improve also. If the higher low fails to follow through, the formation will more likely evolve into another bearish continuation pattern. This is not something that is predictable, it is something that the market must demonstrate. Predicting and timing a market are not the same. People who claim they are "predicting" are still learning. Anticipating a market is the practice of interpreting available information in a way that identifies some form of advantage. We express this in terms of probability. People who predict imply absolutes and there are none in a highly random environment such as a financial market. When the environment is clearly UNFAVORABLE, we sit on the sidelines. Being aggressive at the wrong time is much more expensive than being conservative at the wrong time. The herd may criticize us for waiting it out, but our funds will still be available for when the favorable environment returns. Of course the herd will be made up of entirely new critics that will take the place of the current ones. In summary, the question that we are waiting for the market to answer is: if Bitcoin tests its low, will Ethereum make a new low? So far the higher low or failed low scenario is gaining favor. The fact that price did not collapse as usual can also be interpreted as a new sign of strength. If this market is going to recover, there will be plenty of opportunities to board this train. Especially if important resistance levels like 300 are taken out in the process. While the market builds the structure that we want to see, we wait rather than react. Waiting is free and can be practiced indefinitely. Reacting is not, just ask all the bears that jumped into the sell signal.
BITFINEX:ETHUSD
by MarcPMarkets
13
BTCUSD: Indecisive Price Action? Sidelines.Bitcoin update: Price action is holding just under the 6626 resistance level. This minor consolidation can establish a shallow higher low, but in light of the general conditions, follow through is less likely. In my recent S.C., article I talk about the herd's need for action. There are people that are in this for the thrill of the emotional highs and lows, and then there are people who are serious about making money. Since we belong to the second group, we recognize there is a time to be aggressive and a time to be conservative. Until conditions improve dramatically, we will continue to be conservative. This means SELECTIVE. This means not taking every signal, trigger, candle pattern or any other rationalization to "catch" the next move. Yes, there is nothing exciting or glamorous about waiting. Our capital is preserved and prepared for deployment when the infrequent but high probability setups appear. The price action at the moment is random, it can go either way and there is no distinct advantage to buying here. 50/50 trades are not conducive toward building accounts over time. In the market timing arena, the player defines the game, not the other way around. We like to compare this to the types of poker players that you will find at the average table. There are loose players who play every hand for the thrill, and there are conservative players who are there to make money and will throw away hand after hand until a more favorable opportunity unfolds. An opportunity that fits their criteria for their style of play. In summary in order for us to take on new risk, particular scenarios need to materialize (shared with our members). The scenarios we anticipate are ones that offer a clear and natural advantage. Whether they pay off or not is a function of probability, but when you have pocket aces, you bet on them. Every time. We employ multiple styles of trading and investing, neither of which come anything close to day trading. High frequency will fulfill your need for action, but the high costs will not fulfill your trading account. The occasional wins that do come out of such strategies are no different than the small rewards that come out of a casino. They are just enough to encourage you to keep betting, which is what keeps the house in business. Can you clearly articulate your style of trading?
BITFINEX:BTCUSD
by MarcPMarkets
28
ETHUSD: Nice Try, Long Way To Go.Ethereum update: The retrace attempt may look impressive at first glance, but the broader structure provides a more sober perspective. A move from the 160 area to 224 is nothing to sneeze at, but how much did you have to lose in the process of betting on this random event? This is one of those situations where good is not good enough. Although the move to 224 has the impulsive traders hungry for more, both broader bearish trend lines are no where near being compromised. Like I have been writing in recent Bitcoin articles, the initial move is the most costly. At S.C., in order for us to come off the side lines, this market needs to close above 300 at minimum. Otherwise it will have to take the time to build a much more convincing structure. The initial move is the most costly because in order to prove itself, price needs to test a support to demonstrate the possibility of further strength. Buying too early means you are not only exposing yourself to this adverse movement, but also to the possibility of momentum continuation. Which in this case means a lower low. In summary, market reversals are not a single event, they are a process. Now that the initial move is in place, our objective is to wait for the market to prove a broader reversal is likely. It can demonstrate that in a variety of ways with the most recognizable way being a double bottom formation. Getting sucked into the initial move motivated by the fear of missing out is a common mistake, even if it pays a random profit. If this market probes higher, the broader structure is still not favorable for the type of swing trades we aim to take. If this market is going to recover, it will take time to construct the evidence. Waiting for this requires patience in the face of movement that looks promising, but offers no distinct advantage. We would rather sacrifice what appears to be better prices, for conditions that are generally more favorable. This perspective specifically pertains to our swing trade methodology, and not our inventory management. We do not mix strategies. That is how we effectively minimize losses and maintain positive longer term performance. In this game, you have the opportunity to only play when the conditions are best for you. Take advantage of it.
BITFINEX:ETHUSD
by MarcPMarkets
36
BTCUSD: Price Aims Higher As Risk Increases.BTCUSD update: Minor consolidation forming above the positive sloping trend line which is likely to lead to a bullish break out. Triangles are trend continuation patterns and so far the momentum as defined by price structure remains bullish. As price is poised to climb higher, our concern is the over head resistance located in the high 7400's and above (not on chart). This along with the fact that the higher price goes, the higher the risk of retrace. At S.C., we do not react to price action, we evaluate and anticipate. For our swing trade methodology, the current location makes putting on new trades too aggressive. Less experienced traders do not realize that not every setup is high quality, especially since they hunger for action. One of the toughest lessons to learn is the market will occasionally reward bad habits. Over trading, low probability trades, buying highs, etc. This phenomenon is no different than when a casino game randomly rewards a player. This ignites hope, and stimulates further play. There is no such thing as a professional slot machine player is there? This is why having criteria and sticking to it is so important, no matter what the market is showing. And Bitcoin is in one of those situations where it is showing a potential setup, but the risk is high. Best practices prevent us from buying into such conditions. In summary, at S.C. we have a swing trade plan that governs what trade setups we can take. Bitcoin may push higher, but the risk outweighs the potential reward at this point. Like I wrote in my article earlier today, a retrace to 7K or into the 6800 area presents a much more attractive opportunity. What separates our research from many is that we do no pretend to know where price is going next. Instead we are open to the possibilities of where it can go, and then let the market prove itself. If it aligns with our criteria, then great we have a trade. If it does not, then we sit it out, no matter how great the chart may look. This simple form of discipline is why our performance record is in the positive. Much of it has less to do with hitting home run 10,000% trades and more to do with avoiding many would be losses. I often remind our followers that successful market timing has as much to do with a good defense as it does a good offense. No one wants to hear it though, because defense is never fun or appreciated since the majority of traders are focused on profits. True the purpose of putting money to work is to gain a return. The mistake is in following the natural instinct of obsessing over the return which is what contributes to its elusiveness. All of this translates into: timing is about organizing information, following rules, and waiting for the market to conform to criteria. And yes, it is far from the excitement and glamour portrayed by the financial media. If you want excitement, casinos offer a much better experience for your emotional needs.
BITFINEX:BTCUSD
by MarcPMarkets
19
ETHUSD: Improving Structure, But Relative Weakness Prevails.ETHUSD Update: Even with the Bitcoin surge, this market cannot push above 300. Even though short term structure is attempting to improve, this market looks like it is leaning toward a bearish continuation more than anything else. At S.C., we have been bullish on Bitcoin. We bought at 6189 when the herd of "experts" were sure it was going to 5K. We still own some in our inventory along with a few of the alts. Ethereum is one of the alts and we will not be looking to add until it can close above 320 at a minimum. This does not mean we buy at 320. A close above 320 allows us to begin evaluating price structures and patterns again for potential trades. Many newer traders do not understand the concept of having a good defense is just as important as participating in high probability trade setups. The problem with Ethereum is the consolidation that is forming can turn out to be a continuation pattern toward lower prices. A close below the 280 level will further confirm this scenario. This is why we wait for the market to prove itself before continuing to add or look for new trades. If price instead breaks back above 300 and closes beyond 320, then that will help to negate the potential bearish structure. Keep in mind there is a negative sloping trend line around the 350 area which is another obstacle this market must face. In summary, while other alts like BCH and LTC have shown significant improvement, Ethereum has not. This can change, but at S.C., we let the market prove itself and do not get caught up in irrelevant opinions or feelings. Our objective is to deploy capital across markets that are displaying strength. Although this market is trying, it is currently in a position that lends itself to more of a bearish bias. What happens if Bitcoin retraces significantly? We continue to hold our inventory and remain bullish in the long run, but until structure improves, we will continue to wait on the sidelines with it comes to this market.
BITFINEX:ETHUSD
by MarcPMarkets
7