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Bullishmomentum

BTCUSD: Price Poised To Push 9600 Level?BTCUSD update: 8859 minor reversal zone support holds price as it is poised to test the 9616 minor resistance level. A close above this resistance will signal renewed bullish momentum which is more likely to lead to a retest of the 11700 double top area. The pin bar that appeared off of the 8659 level a couple of days ago is the bullish clue. As you can see, price did not continue higher immediately off the pin bar. There was a bearish candle that appeared first. This candle which is nothing more than noise, looks a lot more dramatic on smaller time frames, enough to suck people into shorts or shake people out of longs. This is why I always emphasize evaluating the bigger picture first. The low of that initial pin bar was never compromised. This bearish failure translates into a bullish sign. The 9616 level is the .382 minor resistance of the recent bearish swing. Once price closes above this level, it will confirm that a new bullish leg is in progress. Are there swing trade opportunities here? Yes, but like I wrote in my previous report, the specifics to this trade will be published elsewhere. Even without a specific call, there is enough information here to quantify risk and anticipate reasonable targets. Keep in mind, the fact that price has pushed into the current support has also signaled for me that the near term expectation of this market is a range bound environment. That means the 10422 to 10943 minor resistance (.618 of recent bearish swing) and the 11700 peak area have a higher chance of preventing a broader break out. IF prices tests these levels and shows immediate signs of failure, I will be prepared to lock in more profit on the position trade that I am managing at the moment. IF price just blows through (still possible) I will take no action and let the winner run. In summary, many less experienced traders often think in absolutes: IF THIS, THEN DEFINITELY THAT. You can't operate in these markets with such limited thinking. Even gauging precise probabilities is more appropriate for PhD's in Statistics, and not practical for speculators looking to capitalize on short term market movement. What is more practical is having the ability to question the market at all times by maintaining a flexible mindset. As price pushes off the current support, and it is strong as proven by the inability to make a new low, how should it behave at the 9616 level? What should the candle look like? How should a strong market present itself upon testing a minor resistance? How should it close? What about if the pin bar low is taken out instead? What does that mean and how does it change expectations for yourself and the herd? These are the questions that you should be asking and answering as the market provides new information. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
16
ETHUSD: Pin Bar Establishes New Support For Longs?ETHUSD update: Recent pin bar formation establishes a higher low relative to the 565 low. Simultaneously price has also rejected the 670 extreme support boundary which is also now in line with the new converging bullish trend line. Observe the structure on the bigger picture and what do you see? A broad triangle which can be labelled as a large magnitude Wave 2. Just like in BTC, the immediate action in this market has been bearish. Smaller time frames will certainly blind you to what is happening where it matters more and that is on the big picture. This minor sell off has done nothing more than push price deeper into a supportive area. The 713 to 520 zone is the .618 area of the entire bullish structure originating from the sub 300 lows. If this market is going to mount a broad reversal and transition back to a more bullish environment, this area is the most probable location for it to begin. IF price closes above the 830 level, that would confirm the bearish trend line break, and will signal the possibility of the first leg of a larger magnitude Wave 3. Positioning for a move like this requires a plan for entries, adjustments and sizing which you must have figured out ahead of time. The bullish pin bar that has appeared is one sign of the beginning of a reversal. It does not guarantee that a reversal is necessarily in play. What if the next candle closes lower? What if the newly established bullish trend line is taken out? Bearish momentum can lead price to extreme lows such as the 520 support zone boundary or the 491 extreme support boundary. IF the market chooses this more bearish scenario, I will be looking to buy into that extreme weakness. In summary, buying a fundamentally strong market is not as simple as buying any pull back. As you can see, since the peak in January, this market has retraced more than 50%. Even though recent lows are attractive buy points, they do not guarantee the best prices. The key to remember is this: there are no "best prices", it is always about what you are willing to risk, and then waiting for the market to provide a scenario where that risk is within range. Are you willing to buy at 1400 and sit through a 50% pull back? (high risk) Or are you willing to wait for a more reasonable price area (50% off the peak) to start building a position? By the time the new bullish leg is in progress, the opportunities that exist at the moment, or leading up to the break out will no longer be available. The goal of this report is to provide perspective, and an idea of what an opportunity looks like. As far as specific trades, they will be available to those who know where to look. Questions and comments welcome. (PM for fastest response).
BITFINEX:ETHUSD
by MarcPMarkets
10
BTCUSD: Slow Double Top May Offer Hidden Sign Of Strength?BTCUSD update: Double top formation is attempting to unfold but I would not assert this conclusion yet because it is materializing in such a slow fashion, it is suspect in my opinion. This double top is lacking the selling momentum that usually follows which can be a hidden sign of strength. When a market rejects a resistance level, especially a second time, price often does not waste time. It sells off quickly and that is not happening in this market. Not only is the bullish trend line still intact, but there is also a minor support at 10754 (.382 of recent bullish swing) that can hold price up for a subsequent higher low. These not so obvious factors point to the possibility that there is no real motivation to sell and all this market needs is a catalyst to spark the move to higher prices. This type of formation is attractive to shorts, and can suck many in who do not realize that the timeliness of a formation is an important consideration. If I was short, and I was sitting through this lack of progress, I would be uncomfortable and looking to get out because it is not behaving as it should. This is not something you learn in a book, or some free video on Youtube, you learn this by years of observation and getting caught on the wrong side of strong markets. When selling happens, it happens faster than buying. This does not guarantee that price will continue higher, and the possibility of the double top following through still exits, but the longer price stays above the trend line and/or the 10754 level, the more of a chance it will go higher. Don't be quick to judge a market because of an impression of a formation, instead let the market prove itself. Waiting for this proof usually costs you more in terms of better entries, or less favorable exits, but that is the price you must pay for seeing the market's hand. Since I locked in profit at 10900 the first time it sold off from this level, I have reduced risk and still waiting for a good price to add more to my long. A clear bullish reversal at the 10754 level is my preferred scenario, other wise I will just stay with what I have. It is very possible for the market to form a shallow higher low off of the trend line and break higher, which is a valid break out signal. Why I will not aggressively add in that scenario is because I do not like buying into the reversal zone which has an upper resistance at 12429. If you choose to buy into that break out, the key to managing more effectively is to be quick to exit if a failure candle shows up while within the reversal zone. In summary, TA is more than just indicators and charts. It tells a very detailed story if you understand what is "behind" the candles. And to any story, there are at least two sides, and you must always be evaluating both until the market shows its hand. Less experienced traders do not realize that when facing any market environment, there is a high degree of randomness or noise which leads to confusion and a lack of "predictability". The mistake many will make at an inflection point like that one we are facing now is that they will attempt to predict which way the market will go from here. We can evaluate the signs and consider the context to get a better idea of where the bias leans, and take chances when the reward/risk is clear. When it is not, it is better to let the market reveal its intentions. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
31
LTCUSD: Consolidating But Still Bullish. 320 Target?LTCUSD update: Symmetrical triangle is unfolding in this market as this sector seems to be waiting for something. A catalyst is required to spark the momentum either way and it is important to determine what you will do once the market makes a choice. Tight markets like this can be confusing and there is no reason to take new positions at this point until a break out occurs. In the case of this market the bullish breakout would be 218. Just like in BTC, this market still has a bullish bias because of the position of this consolidation relative to the bigger picture. In other words, it is in a higher low position and we know that higher lows often lead to higher highs. The biggest mistake you can make in a situation like this is to attempt to read smaller time frames which can lead to a lot of confusion. False signals and noise are characteristic of consolidating markets. The best thing you can do is prepare for both possibilities, the break higher and the break lower. IF the market breaks higher (higher probability), the 289 to 312 resistance area (.618 of recent bearish structure) offers a reasonable short term target. A strong catalyst is required to spark this type of move, whether is comes in the form of specific news for this coin, or a fundamental improvement for the sector. When consolidations break out and they have a strong catalyst behind them, their potential target can be measured by projecting the length of the consolidation vertically. It is an old technique, and is far from accurate, but it does provide some perspective and in this case the potential target is the 320 area. Keep in mind this market can also break lower. Unless this coin becomes obsolete, the bearish side has much less potential, especially since there are major support levels just under the consolidation. 186 to 138 (.618 of recent bullish structure) is still in play and any retrace into this area is one that I am interested in buying, not selling. A close below the 106 low is the only scenario that would be more of a cause for concern for me. In summary, markets like this one are not as wild as BTC, but when they move, they do move relatively quickly. It is just a matter of having the patience and the confidence to trust the road map which is still bullish. The other factor that I write about over and over is your risk tolerance. Without a clearly defined strategy for managing your risk, or accepting losses sets you up for reaction trading. This is the irrational decision making that often leads to selling bottoms and buying tops. Let the market show its hand, then take action based on a predetermined plan. My plan at this point is to wait for the next resistance area to be reached so that I can lighten up on my position. If I see any solid opportunities to add along the way, I am still open to that. Questions and comments welcome.
BITFINEX:LTCUSD
by MarcPMarkets
7
BTCUSD: Double Top? Or Break Out? Let Market Choose.BTCUSD update:The current candle which has less than 8 hours to close is presenting an inside bar formation. The break out from here can be bullish or bearish and it is up to the market to choose, not for us to "predict". Based on the current structure that is intact at the moment, the buyers are still technically in control. The recent bullish trend line is still in play which increases the chance of a bullish break out rather than a sell off. Breakout buyers still face the potential reversal zone just above the previous 11788 high which extends up to the 12429 resistance boundary. Usually when there is a break out, the break out candle closes strong which is not happening. This means it is important to pay more attention to the range of the next candle. If price breaks below 11050, that is a sign of weakness which will be confirmed with a close below 10750 which coincides with the break of the bullish trend line. These signs of bearish momentum can be used as catalysts for lightening a position, or as a stop loss, depending on the type of long trade you are managing. At the same time. this hesitation may be nothing more than noise, and if the 11500 level is broken instead, that is confirmation that bullish momentum is still in play. This makes it reasonable to expect a higher high attempt which offers the opportunity to let longs run to see if the next resistance levels can be reached. I do not mention the short side because at this point, the bias is still bullish and shorts, especially on the broader time horizons are much riskier in my opinion. I do not short these markets to begin with, and if I could, I would only short on small time frames which is often not practical. In summary. the market is at a point where we must take ourselves out of the equation for the moment. It is either going to unfold as a failed high, or break out to new highs which is what the bias leans toward. For my long position, I am looking to buy more, but since there is a hint of a second peak, I would rather wait and see if the lower probability bearish scenario plays out. IF price retraces, it may offer a new opportunity to add to my position. IF price breaks out instead, I still benefit from my long anyway and I will be looking for opportunities to reduce risk and lock in more profit at my predetermined resistance levels. Define your scenarios, have a plan for each one, and then let the market choose. This is what flexibility is all about: the market decides, and you adjust. Our preparedness is how we anticipate, which is much more effective than emotional reaction. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
14
BTCUSD: Poised To Break Out? Scenarios To Consider.BTCUSD update: Bullish momentum is carrying price back to the previous peak. A retest of 11788 is likely and this situation offers an opportunity to lock in profit. What about buying the break out? Risk is now higher for the short term, and in this report I will explain some considerations for those who have been long, and those who are out, waiting to get back in. If you are long, there is no reason to sell at the moment. What is important to consider is the price action that occurs at the 11788 high, and the proportionate reversal zone just above that has an upper resistance of 12429. IF this market is going to peak and retrace, this is the most likely area for the selling signs to appear. For example, the appearance of a pin bar off the high (just like the previous peak) would qualify as such a signal. This scenario would then present a double top or failed high formation. Double tops or failed highs are signs that imply oncoming weakness, but not necessarily a trend reversal. At this point, I do not know if the market will decide to start selling, all I know is that it is an area that can attract more selling than buying. For the swing and position trade longs, locking in profit (NOT selling your whole position) is never a bad idea in areas like this. To help maximize your winner, do not place limit orders at target prices, instead wait for the market to show weakness. Once the weakness is confirmed (a bearish reversal candle) then you sell some portion of your position. What about taking new longs? A common strategy is to enter on break outs. A push beyond 11788 is a breakout that will attract these types of buyers. The problem is the potential fake out. Even though though price is more likely to break higher since higher lows lead to higher highs, there is an increased chance of a pull back. If you are long term bullish like me, you may wonder: Why not buy if its going higher in the long run? The answer to that question is: how much pain are you willing to take? Often when markets look their best, it is a bad time to buy. Best practices suggest buying supports in strong markets, not resistances and once this market breaks out, price will first face the reversal zone resistance, and IF it can break it with conviction, the next resistance is 13012. As price pushes higher the chances of a retrace increase while reward/risk becomes less and less attractive. One solution to buying the breakout is using a tight stop in case of immediate failure, but this requires a ton of attention. The other problem with this technique is when it comes time to take a profit. Are you using swing trade targets? What if the market turns before it reaches the 12500 or 13K area? You are now managing a swing trade idea that carries larger short term risk, with day trade constraints. Your chances of getting confused and shaken out increase dramatically, especially if you do not have the time to watch these markets all day. It requires a lot more work to escape with a profit compared to if you bought in at a much lower price. In summary, I like to take risk when conditions are more favorable and usually these conditions are not obvious to the market crowd. By the time the strength is obvious, that is the best time to sell. Why buy highs? They naturally carry more risk, and if you happen to get away with a profit, that high risk behavior was now reinforced by the market. I expect prices to break out and continue higher, but I am long from 10020 and have been since January, which gives me the flexibility of either locking in more profit, or just letting it ride. My plan helped me recognize the opportunities at lower levels and I took the risk. Do not let greed or fear of missing out drive your decisions, instead focus on identifying when the reward/risk is most favorable relative to your trading style. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
17
BTCUSD: Setting Up To Revisit Lows? Or Just Noise?BTCUSD update: Bullish momentum is still carrying price higher, but it is slow. In this report I will cover how to manage expectation in this type of environment and what to look for as far as signs of weakness. When price action hesitates like it is doing at the moment, it can scare traders out of a good position too early, especially for those who have a hard time dealing with losses. The main thing to focus on in a situation like this is the direction of the immediate momentum which is bullish. This is easily defined by the trend line that is still intact. As long as this condition stays true, and price does not close below 10300, it is more likely to grind higher. The trend line boundary at the 10300 area is a good place to look for reversal candles on smaller time frames, and IF price closes below, it does not mean the trend shifts to bearish. The 9986 to 9723 minor support is still an area to look for reversals also. Price retesting this support just means subwave 2 of Wave v is still in play as long as there is no overlap with Wave i. A tricky scenario to be mindful of is IF price retests the 8800 area which is the lower boundary of a minor reversal zone just below the 9280 low. A push into this area can appear very bearish and attract over reactive shorts, along with a lot of drama. The key to avoiding getting caught at a low is watching for the establishment of reversal formations, especially if they are pin bars on this time frame. Range bound markets will often test lows and produce false breakouts, especially when they are counter to the broader trend which is still bullish in my opinion. What will confirm that price momentum is bearish again? Reversal patterns at the current price level are not enough. A break and close below the current bullish trend line along with breaks of the minor support and reversal zone are required. That means price would have to decline by more than 1500 points to finally consider momentum bearish? For my outlook on this time frame, yes. Remember depending on the time horizon you are focusing on, your criteria for defining momentum would be different. If I were day trading this market (which I have no intention of doing) I would be bearish as soon as the current candle closed and price breaks the low of it. That is a much different perspective which carries tight stops and profit targets to give you an idea. In summary, having a specific plan and predefined criteria to measure against are essential to not getting confused by the hesitant price action we are facing at the moment. Knowing what to look for within your specific time frame is what minimizes those emotional impulses to react to noise. Whether this market chooses to extend the consolidation or fake out and go higher, I am prepared either way and keeping an eye for any attractive opportunities upon any retest of the supports mentioned earlier. I have been bullish the whole way and will continue to manage my position from that outlook as long as the general fundamentals stay intact. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
17
LTCUSD: A Break Of 232 Is Beginning Of Wave 3?LTCUSD update: Price action is still consolidating around the 210 level which is building a larger higher low formation. Following the lead from BTC, the price action in these markets are pointing to further strength. The more time they spend trading horizontal often leads to a more sustained move once price breaks out which puts the 300 area within reasonable range. Consolidations like the one unfolding in this market are important to recognize especially because of the where it is appearing on the road map. The structure serves as a broader higher low formation and offers a number of opportunities to participate before the next leg breaks out. In terms of Elliott Wave, this formation can be counted as a subwave 2, which means IF the overall bullish structure continues within the impulse configuration, then the next bullish break out is most likely subwave 3. Wave 3's are never the shortest wave, which means even if it turns out to be equal in length to subwave 1, that makes the 312 boundary of the 269 to 312 resistance area (.618 of recent bearish structure) a reasonable target over the next couple of weeks. Price needs to close above the 232 level decisively which means no long wicks during the break out. I would also consider a break and close above 226 as an earlier confirmation of strength since price would be pushing through the minor bearish trend line at that point. The questions always are: where do you buy and what can go wrong? IF this markets pushes 226, that is a more aggressive buy trigger in my opinion because it still has to clear the 232 swing high before breaking free of the consolidation. Breaking 232 offers more confirmation that momentum is driving price higher, but you will have to accept a larger loss if the move is a fake out. What can go wrong is a bearish catalyst can surprise the market and scare price back to the 186 to 138 support zone (.618 area of broad bullish structure). In summary, as I often write, your outlook and risk tolerance play key roles in how you manage the kind of opportunity that this market offers at the moment. You must first consider what kind of time frame you want to participate, and then weigh the risks against the potential rewards. Everyone wants to be in for the big move, but no one wants to face the larger risks, which come in the form of deeper retraces than expected. This is why I emphasize, if you can take the loss without batting an eye lash, then you become immune to the random curve ball that the market can throw at you. This strong hand can be accomplished by appropriate position sizing which is often frowned upon by participants with small accounts, or who are driven by greed, or both. By default, chances of success in the game of speculating or investing in any market are weighed against us just based on our own psychological wiring, not mention other factors like costs and slippage. This is why it is so important to make decisions based on risk first, then consider the relative reward, not the other way around. And risk management begins with how well you know yourself. Questions and comments welcome.
BITFINEX:LTCUSD
by MarcPMarkets
9
BTCUSD: Impulse Still Active. Bullish Retrace From These Levels?BTCUSD update: As of this writing a bearish pin bar is forming which indicates the onset of weakness. This is a good sign for me since I am interested in buying into the next higher low to add further to my long. In this report I will discuss the two price areas that I will be considering. The first point that I want to make is this: the analysis that I write is based on the configuration of the pin bar which is not established yet. It has about 14 hours before it closes which means it has plenty of time to change. It can get weaker which is what I would prefer, or it can close strong which will prevent me from taking any action. TA helps to define multiple scenarios, and then you adjust to what the market chooses, you don't react. IF the pin bar closes and the next candle continues lower, I am looking for price to present a shallow reversal between the 9956 to 9723 minor support zone (.618 of recent bullish swing). Since this zone is relatively narrow, a break lower will bring my attention to the 9280 swing low. IF price can produce a reversal pattern within these price areas respectively, I will be looking to add 30% to my position. IF price falls through these levels, (anything is possible) then once again I will be eyeing the 8171 to 7329 minor support (.618 of recent bullish structure) for reversals. Keep in mind the likelihood of this scenario is lower since this market is still within the boundaries of a bullish impulse wave. I am looking at the current bullish swing as a Wave 1 of a Wave v. The next minor retrace would be the Wave 2. Breaking below the 9280 low will negate this count and imply that this market is in a consolidation that will have to be identified further as it unfolds. If the Wave 2 establishes itself, then Wave 3 should carry price back up toward the 11700 swing high, and likely break higher. Many people get confused when it comes to the subjectivity of Elliott Wave, but remember it is best used to provide a general road map or guide. As the market changes, it offers criteria and categories to base ideas on, expecting more than that is not realistic. In summary, looking ahead and preparing is much more effective than reacting. Inexperienced traders may focus on the pin bar and look to sell, but may quickly overlook the context of the situation surrounding this formation. With the bullish impulse wave still intact, this market is still has a short term bullish bias which reduces the weight of bearish formations like a pin bar, or lower high until the impulse is negated. This information alone should at least help you to look for support levels to hold rather than break, and more importantly to anticipate bullish reversals. This is how understanding context guides your decision making process which is much more effective than simply reacting to a candle formation alone. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
10
ETHUSD: Price Still Vulnerable WIthin Triangle?ETHUSD update: Now that a positive catalyst has once again sparked a BTC rally (no surprise) this market has more context to rally even though it has been somewhat sluggish compared to BTC and LTC respectively. The good news is this market is coming off a major support zone with momentum that is backed by supportive structure. How do you buy if you missed the trigger? During the minor retrace lead by BTC, this market retested the 872 to 739 major support zone (.618 area of broad bullish structure). Within this area the 824 level (.382 of recent bullish structure) was also tested which lead to an outside bar. This configuration is not only a very bullish sign (the newly formed bullish trend line) but it was followed by a minor higher low that served as a long trigger within the major support zone. I did not write about this particular trigger because I was more focused on BTC and LTC opportunities, I also did not take this trade because I was not overly enthusiastic about this market's lack of responsiveness. So the big question: Is now still a good time to buy? The answer depends on your outlook and how much pain you are willing to take. 816 is the current swing low and reference point to measure risk from. And that is the lower risk swing trade perspective. If you are looking to enter for a broader move, you have to be okay with the possibility of price retesting the 739 lower boundary of the broad support zone (it can happen). This increased risk means if you are too aggressive with your size, or too nervous about pull backs, you are more likely to get shaken out if any bearish drama follows. If the momentum is bullish, shouldn't price just keep going now? Why worry? Speculating in any financial market is like playing a game of musical chairs, once the music stops, you better be close to a chair. In trading this means you must always consider your position if everything falls apart and then ask yourself if you can handle it. What can go wrong in this market? The 921 resistance is still in play and beyond that the broad bearish trend line in the 940 area also stands in the way. With bullish momentum supporting price, these resistances are more likely to break, but IF they don't, especially if price action forms a lower high, that would make this market more vulnerable to bearish catalysts or short term drama. In summary, the overall market structure at the moment is more of a consolidation than a clear trend (as defined by the converging trend lines). This broad triangle is one giant continuation pattern in my opinion, and offers plenty of bullish potential if you are able to hang on during the over reactive pull backs. A break of the lower boundary of this broad triangle is not a major bearish sign, but it could lead to the retest of lower supports especially in the face of any newly formed head and shoulders pattern. I only mention the bearish possibilities because they are important to recognize when assessing the type of risk you are willing to take. Overall I am bullish on this market, it is just a matter of waiting for a price that is in line with my criteria, especially since I am holding other positions that are correlated to this market generally. Questions and comments welcome.
BITFINEX:ETHUSD
by MarcPMarkets
8
LTCUSD: 218 Break Out Can Lead To Test Of 260?LTCUSD update: As BTC is pushed lower by bearish momentum, this market is acting relatively strong by maintaining a tight consolidation. Often this type of relative strength leads to higher prices, especially when combined with the potential effects of this type of trend continuation pattern. The symmetrical triangle is a form of consolidation that is considered to be a trend continuation pattern. The key to capitalizing on these formations is in waiting for the break out. The most important consideration is the over all market context that the consolidation is appearing within. In the case of LTC, this triangle formation is materializing after a minor retrace which followed a well defined bullish structure off the recent lows of the 106 area. Simply put, it is forming a higher low just above the 186 support level. The 186 to 138 area is the .618 support zone relevant to the broad bullish structure of this market. This configuration in my opinion is a sign of strength and offers an opportunity to add to a position trade or even initiate a swing trade upon the break out which puts the trigger at 218. My long term outlook remains bullish on this market and I have been carrying a position since the 50s. My more recent purchases have been in the 150 and 230 areas respectively. I will look to add at a break of 218, but keep in mind this is a position trade which means I use no stops or targets. I manage risk with strategic sizing. The swing trade, which has a more defined risk can be taken upon a break of 218, with a stop just below the 181 swing low. Which strategy YOU choose depends on your goal, outlook and risk tolerance. The first target for the swing trade would be the 260 level which is just below the 269 to 312 resistance zone (.618 resistance area of recent bearish structure) . It is also within a minor reversal zone that is projected off the 254 recent high. What IF the triangle breaks lower instead? For one, it cancels the swing trade scenario, and secondly, a break lower will put price right back into the .618 broad support zone where I will be looking for new stability to materialize anyway. Any dramatic selling in BTC is more likely to affect this market in this bearish way, so that is something to keep an eye on, especially if you are more interested in the shorter term move. In summary, at the moment this market is acting relatively strong to BTC which indicates it is poised to outperform IF BTC finds strength in the coming days. These type of correlations or relationships work until they don't so it is not something to count on 100%, just another argument to add to the mounting bullish signs in this market. For my position trade, I am looking to add on the 218 bullish break, and looking to lighten my position well into the next resistance zone which is the 269 to 312 area. Within that area, there is a 2.618 target projection which serves as a good point of reference. I am bullish and can afford the risk if this market falls apart, and that is something you need to strongly consider if you are looking to take a position as well. There is no safety in these markets, it is all about what you can afford to lose. If you can't lose, you especially should not be speculating in these markets. A trade should begin with your own personal assessment of risk, not a pattern on a chart. You do not need to be an expert analyst to know your level of risk, you need to be an expert at knowing yourself. Questions and comments welcome.
BITFINEX:LTCUSD
by MarcPMarkets
10
BTCUSD: Minor Retrace? Or Retrun To 9600 Support?BTCUSD update: Price is retracing off of the 11700 high, but what is more important to notice is the bearish pin bar that formed and it's low compromised. This bearish signal was one of the scenarios I was anticipating at or near the bearish trend line. What does this mean? I published a quick update that said I sold 15% of my position. I did NOT exit my entire position, all I did was lock in some profit which was part of my plan if you read the details of my previous reports. I am still bullish, but I am simply following best practices: sell into strength. Locking in some profit is never a bad idea, and it reduces risk. If you don't understand this, then greed drives your perspective. It also means you have not learned anything from the 20K sell off. Do I think this market is going higher? Yes. I locked in some profit just in case the retrace becomes more pronounced which is still possible. In fact, the bullish trend line was tested at the 10680 low and held which is a sign of strength. The problem is this market needs to establish a bullish reversal pattern in the current price location, otherwise it may break the trend line. If the trend line breaks, is that the start of a new bearish move? Not necessarily. It just means momentum is becoming less bullish. If there is a break and decisive close below the trend line, I will be watching for the 9604 level (.382 of current bullish swing) as the next support for a bullish reversal and place to add to my position trade. In summary, my choice to sell 15% of my position was not a reaction. It was a predetermined adjustment that I described ahead of time, which required the market to show a certain condition, and it appeared. Emotion does not drive my decisions, my well defined plan does instead. I was interested in selling around 11400 but instead of placing a limit order earlier, I chose to give the market a chance to go further. This is the trade off that we must always face when in these situations. I can place a limit order and sell too early if the market goes straight to 12K, or I can give the market a chance in which case I may get less than 11400 if I use a candle low as my trigger to take profit. There is no perfect way to do this. Your choice here is a function of your risk tolerance. I still have 85% of my position, so what if I make a little less as the market goes higher, and I will add back to it IF the market gives me that opportunity. Managing a position trade is like managing inventory, and I just locked in some "retail" prices at a potential peak. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
26
BTCUSD: Strong Close Can Lead To 14K Push?BTCUSD update: Higher high takes out bearish trend line as anticipated. With the 9890 to 10836 minor resistance cleared and bullish trend line still intact, the next resistance area that I am looking for is the 13012 to 14889 zone. At the same time, I am still open to locking in 15% of my position if price action presents a reversal signal in the current price location. For those who have been following this position trade, my average price is 10020. The swing trade call that I made at 8854 paid an 1800 point profit (if you sold at 10500) and IF you held onto some as I suggested, you are riding a winner. The main premise behind the position trade was the magnitude of the support zone that the market reacted to which was the 8171 to 4983 area (.618 relative to entire bullish structure). And consistent with this premise, price has cleared the minor resistance zone of 9890 to 10836 (.618 area of recent bearish structure). The next area to consider is the 13012 to 14889 resistance zone (.618 relative to entire bearish structure). The bearish trend line break around the 11400 area is a significant bullish sign. It serves as evidence that the bearish momentum that took this market to 6K is no longer in effect. This does not mean the market won't retrace though. In this scenario, I would expect support levels to offer a better chance of holding, rather than this market testing new lows. Keep in mind, price has not cleared a small reversal zone that is just above the most recent minor peak. IF a bearish candle formation appears at the current level, that would signal a failed high and more than likely lead to a retrace. On the other hand if there is a strong close, then it is reasonable to expect bullish momentum to carry price into the higher resistance zone over the next few days. In the failed high situation, I am looking to sell 15% of my position, otherwise I am holding for the 13 to 14Ks. Letting a winner run is a best practice and requires the flexibility to adjust if the market presents a less favorable sign. Part of my plan was to see how price behaves on the break of the trend line. Any trouble, I will lock in some profit and reduce risk, otherwise hold. I may not be able to update this post with timely order information so it is not wise to depend on me for these types of decisions. I am telling you my plan, and you must have the ability to make the judgement on your own whether to lock in or hold. In summary, one of the best lessons you can take away from this trade is this: To benefit from a broader move, you must be able to see the opportunity before it becomes obvious to the herd. If you find yourself confused because of conflicting information the whole way up, it is because you lack your own perspective and are missing a process to evaluate market information effectively. This will especially be the case if you are a hyper consumer of internet news which only serves to benefit marketers. All financial markets, especially this one, are environments that flow with uncertainty at all times. Price action can help us get a sense of how the crowd is likely to react, but the key to benefiting from this type of evaluation is also having the mental flexibility to adjust if your scenario is negated. There is no certainty, only probability. Our goal is to find ways to stack probabilities in our favor enough to justify taking the risk and usually when these opportunities are present, they are not obvious. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
30
LTCUSD: 229 Break Out Can Lead To Test Of 265 Resistance?LTCUSD update: Price action presents a shallow retrace which has established a minor higher low at 212.50. Higher lows often lead to higher highs, so if you missed the earlier buy signals in this market, a new one may be in order, BUT it does not come without some increased risk. Since the turn around in BTC, the coins have all established bullish trend lines. As long as the markets can stay above these trend lines, higher prices are more likely. In the case of this market, the trend line support is at the 205 area. In terms of waiting for a more attractive buy signal, this level would be more appropriate since it has structure and proportion behind it. IF this trend line is broken, that does not mean the market turns bearish, it just means the current bullish momentum is changing (possibly to a more range bound environment). There are two ways to participate in this situation: The aggressive way is to buy the bullish breakout. That would be in the form of price breaking above the counter trend line which is around the 229 area. This choice carries more risk because you are buying right into the 231 to 265 resistance zone (.618 area relevant to recent bearish structure). Buying this breakout is betting that the resistance will be cleared now that momentum is bullish. This requires agility because any sign of failure after the breakout can lead to a retest of the lower 200s. If it follows through instead, you will have a position that has a reasonable target around the 300 area (2.618 extension measured from 106 low). If you use the 200 area to define risk, R:R is 2.3 which is worthwhile for a swing trade in my opinion. The question is, are you willing to take a 30 pt or greater loss if the market turns? The conservative strategy is to wait for a possible retest of the 200 level, followed by bullish reversal signs such as a pin bar, etc. In this scenario you are still betting that price will push through the upper resistance zone, but you are getting a much better price. IF this market breaks below the 200 area, it is more likely to continue as a consolidation rather than a retest of the 106 lows. If you are new to these markets, following analysis like this in a literal sense will not help you be successful. The idea here is to provide a perspective or range of ideas that you modify and make your own based on your personal risk profile. The best thing you can do is learn what factors are being considered and figure out how to interpret this type of information on your own. Following any analyst, whether they are on here or anywhere else still puts you a step behind because you do not have the confidence that gave the author the reason to share their respective ideas. In summary, this market is showing a formation that presents an opportunity. How you participate in this opportunity depends on what kind of risk you prefer to take. IF the bullish trigger occurs at 229, and you buy, you must accept the possibility of the immediate fake out and failure. If you recognize the signs, you can get out earlier. These types of decisions must come from you, your process and your risk profile. Expecting simple "predictions" and outcomes from any analyst is unrealistic. You must be proactive in your decision making process and know ahead of time what type of trade you want to participate in along with a set of specific outcomes. This structured decision making is what your "plan" should help you accomplish for every trade you take, whether its a day trade or position trade. Managing my position trade, I am looking to participate in both scenarios and temper my risk with size since I am in this for a broader move. Price breaks out, I will look to buy smaller. Price retraces to 200? I will look to buy bigger. My risk is managed with my size. Questions and comments welcome.
BITFINEX:LTCUSD
by MarcPMarkets
3
BTCUSD: Bulls In Control Unless Trend Line Breaks?BTCUSD update: Retrace off of bearish trend line in progress as price action establishes an engulfing candle. Is this the turning point that will lead to a retest of the lows? Or just a small bump in a broader bullish move? The answers come from your outlook and your risk appetite, while the chart offers a structured way to plan your decisions which is more effective than reacting. Having your OWN perspective and outlook frees you from the confusion of the hype. From irrelevant news that aims to drive traffic, to over exaggerated analysis written to attract attention, it is very easy to become indecisive when the market gets a little shaky. Bullish momentum is easy (if you are long), but when a retrace comes along, that's when fear begins to distract you from your original plan, especially if you are a regular consumer of low grade information. The solution? Learn how to weight and categorize information based on your OWN perspective and outlook. My perspective and outlook has been bullish and still is. I am managing a position trade which means I am looking to capitalize on a broader move higher. The price action that is occurring now was a scenario that I was anticipating. It is not that surprising that selling shows up at the 9887 to 10836 resistance zone (.618 area of recent bearish swing), and simultaneously off of the broader bearish trend line. In my previous report I wrote that I was going to sell 15% of my position around the 11,400 level depending on the price formations. The market never went to that price, and the bearish engulfing candle came sooner. Can you see why I have not been encouraging people to buy at these higher levels? What to do now? Lock in some profit earlier because of a selling pattern? My answer is in my outlook for my trade. I am playing the bigger picture and expect much higher prices based on the magnitude of the level that this market is coming from. On top of that, the bullish trend line that is still intact carries more weight than the engulfing candle and tells me that buyers are still present (especially if an inside bar forms). Since momentum and structure is still generally in my favor, I am willing to risk the profit that I am managing at the moment in order to let my plan play out. My outlook and perspective along with the supportive structure on the chart all tell me the 11,400 trend line break is still reasonable to expect. I suspect that price will push when the bearish trend line is compromised, and any failure in that area is when I will sell 15% of my position (especially since it would be considered a double top formation at that point). IF price never shows any subsequent failure, I simply let my winner run. The scenario that would cause some concern for me would be a decisive break and close below the bullish trend line which means price would be push below the high 9Ks. In that scenario, I still would not sell, I would wait for the next bullish retrace attempt and then unload some there. By operating this way, I give the market a chance to go back in my favor, or at least offer a better price to lock in some profit and reduce risk AFTER it has proven weaker than anticipated. In summary, having a perspective, knowing how to weight information and accepting the relative risks are paramount to sticking with a bigger picture plan. Can some news come out of nowhere and hammer this market? Sure, but I am willing to take that risk. Managing a position trade is more like managing inventory. When the cost of inventory gets cheap (market is selling off) you buy at wholesale prices. When peak season comes around (new highs) you unload it at retail prices and then wait for wholesale prices to come around again. As long as prices are not going to zero, this is a good analogy to consider. Charts help us measure, evaluate and anticipate, they can't decide our risk appetite, only you can. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
25
BTCUSD: Strength Continues Toward Bearish Trend Line?BTCUSD update: 10,500 swing trade target was reached yielding an 1800 point profit and you only had to hold since the 10th. Price is now pushing highs and is poised to break above the bearish trend line established in early January. There is nothing to do at these levels except watch. People are still sending me messages asking me if NOW is a good time to buy. Clearly they have not read my previous two weeks of reports, and/or their impulses are so strong, that they can't contain themselves. As I have written before, this is when the herd mentality kicks in and offers an opportunity for the prepared traders who positioned themselves much earlier to sell to the "obvious" crowd. The risks are shifting into high mode for initiating new trades. Current levels are a place to lock in profit, not buy. Now this is when greed begins to rear its ugly head. IF you participated in the swing trade which I defined clearly in my reports, selling some at 10,500 means you locked in some profit and reduced your risk. That was the plan, and if you stuck to it, you should acknowledge your ability to avoid the pitfalls of the herd. When locking in profit, I always reiterate that you should not exit your entire position. Maybe now you can see why. My average price is 10,020 and my plan since the beginning has been to hold for the broader bullish move. The 9887 to 10836 is a minor resistance zone and serves as a swing trade target and since I am not in a swing trade, I plan to hold and only begin to sell some of my position as this market attempts to cross the trend line which is around the 11,400 area. IF I see a selling formation establish itself such as a pin bar, bearish engulfing or other formations that imply oncoming weakness, I will take that as my signal to lock in at least 15% of my position. As long as the newly established bullish trend line stays intact, this market is more likely to push higher. This does not mean the market can't pull back. IF this market breaks the trend line, it will be signalling a possible retest of the 8171 to 4983 support zone (.618 of entire bullish structure). This scenario would prompt me to add more to my position trade once stability materializes after the retrace. Buying into the current highs presents more risk because if the retrace scenario takes effect, you will have the worst prices and face a lot more pain if this market decides to retest the low (ANYTHING can happen). Taking the most pain is what often pushes people out of positions at the bottom, which is the way of the herd, not the professional speculator. In summary, benefiting from the kind of bullish move that came from the 6K low requires planning and structure, not reacting. Often the best prices are the least obvious to the crowd and why having a perspective, and a structured evaluation process is key to capitalizing on their impulsive ways. Evaluation is not "predicting" as so many like to call it. It is about estimating loose probabilities which are based on repetitive price patterns and then considering that information in light of broader technical and fundamental factors. That is what yields a perspective and what facilitates positioning before the herd reacts to the obvious. What also makes this type of positioning possible is the acknowledgement of the potential risk, and comparing that to your personal loss threshold. That is how I decide if a position is worth taking. Charts serve as a tool to develop a perspective, and to quantify risk, they cannot determine your own risk tolerance. That part must come from you and your unique situation. Once you have an idea of what is reasonable on both sides of the market, then you can better decide if the situation is worth the risk relative to your own personal capacity. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
42
LTCUSD: Retrace To 186 Offers Next Buying Opportunity?LTCUSD update: Bearish trend line was cleared in a decisive move higher which lead this market to just under the 231 to 265 resistance zone. The next step is to add on the retrace. I have been writing about the clear reversal formations for weeks in the major coin markets. Of the three that I evaluate, this one had the clearest bullish signal which I highlighted in an update to my previous LTC report. This was the double bottom in the 118 area and was followed by the anticipated higher low, and you can now see the result. You want to be positioning yourself for these type of dramatic reactions, not jump in when it becomes obvious.This is why understanding your own risk tolerance is important, otherwise you will not have the confidence to enter when the most attractive reward/risk opportunities present themselves. The best time to buy is NOT obvious. Now that this market has proven that bullish momentum is in effect, my objective is to add to my position trade long on pull backs. The next pullback I am watching for is the 186 level which is now the .382 of the recent bullish swing. This level also coincides with the newly established bullish trend line. IF price manages to offer this opportunity, I need to then see some variety of a bullish reversal signal such as a pin bar or other type of pattern. Once in place, a swing trade and position trade opportunity will be presented. Why is a swing and position trade opportunity available at the same time? It is all relative to location. A pull back to the bullish trend line also happens to be overlapping with the large magnitude support zone of the 186 to 138 area (.618 of recent broader bull run). Trades off of this level offer attractive positioning for a broader move that can works its way back toward the highs over time. While at the same time, a swing trade can be taken that offers a shorter term opportunity with defined risk and a reasonable target range within the 231 to 265 area. If I think it's going back to the highs over time, why get out earlier? It is all dependent on your outlook and the risk you are willing to take. Also not all levels offer these type of opportunities. As the market goes higher, I will want to buy less for position trading and more for swing trading which keeps my risk in line with my tolerance. Swing trading is a lower risk strategy because you are in the market less time and take profits sooner compared to a broad position trade. In summary, if you find yourself feeling impulsive and anxious because you missed out on the earlier entries of this move, do not give in to the greed and fear of missing out, that is what the herd is for. Getting in the habit of looking ahead will separate you from the impulsive mindset and allow you to anticipate and position yourself to capitalize on the next reaction. In this case it is a simple pullback to the next support. At the same time, you must be mindful of risk because what if price falls through the support? IF that happens, the market would be telling us that it is range bound rather than bullish which will require an adjustment to the short term outlook and expectations. Price may only present a shallow retrace, which requires a more bullish adjustment. Having predetermined scenarios helps you prepare for and capitalize on market opportunities when they are not obvious, The herd cannot see beyond the scenario in front of them, while the experienced speculator is open to a multitude of possibilities and prepared for each one. Impulses steer you into the herd, the first step to avoiding that is becoming aware. Questions and comments welcome.
BITFINEX:LTCUSD
by MarcPMarkets
9
BTCUSD: Resistance Zone Is First Profit Opportunity?BTCUSD update: Bullish momentum is in effect as price reaches the 9887 to 10836 resistance zone, coming off of the recent higher low formation. This is where the herd begins to get excited, and also where the first profit target should be considered for swing trades. On 2/11/18 I highlighted a swing trade that triggered on the break of the 8570 candle high (I got filled at 8690, it's in the report). I am holding for a broader move, but for those who were more interested in a swing trade (short term move, defined stop and target), the first target area is about 650 points away. The 9887 to 10836 is the first resistance zone (.618 of recent bearish swing), that is being tested since the sell off. The swing trade target that I highlighted is the 10500 level which is basically in the middle of the zone. Why sell if this market still has a lot of room to run? This is the first level to consider locking in SOME profit, not your entire position. IF you got long around the 8690 level, you are up almost 1200 points at the moment. and at 10,500 you would be up 1800. Not bad for 5 days, so why not lock some in? It reduces risk and allows you to outperform the buy and hold strategy in an environment that is not the most stable. Remember the herd mentality. When markets start breaking resistances and pushing highs, the crowd reacts. This type of reaction, which is now in the form of strength is an opportunity for those who were able to anticipate this move to sell into strength. This is a best practice and the only obstacle in your way is greed. What about the bigger picture trade though? This is where your perspective, outlook and risk tolerance come into play. The positions that I built as this market bottomed were part of a position trade. I did not use any stops or targets because my outlook is anticipating the broader trend to reassert itself. For my trade, that scenario would be confirmed upon the break of the bearish trend line that was established in January. This would put price around the 12K area. As I hold out for these possibilities, I am taking more risk. The market can turn back at any moment and retest the 8Ks or even lower IF this market goes into a range bound scenario. So with that said, for my position trade, I intend to lock in SOME profit IF we reach the trend line and get a bearish reversal candle. If on the other hand, price blows through, then there is no reason to sell until the next resistance takes hold which can be in the high 13Ks. If I am going to lock in some profit, I at least want to make sure I have given the market a chance to maximize it. Another way to do this is to use a manual trailing stop which you place at the low of the previous candle. This is a good technique for when you have reached an acceptable profit target, and there is no reason to sell. Just trail the stop and let the market take you out. In summary, hopefully from the series of my previous reports, you can piece together the process that I covered to build my long position trade in this market. Now that we are at a resistance, I have the luxury I deciding if I want to lock in some profit or hold to see if my bigger picture anticipation plays out. The key point is: from start to finish I have been following a plan and NOT reacting to anything. At the current resistance area, best practices tell me that this is an area to consider locking in profit, and NOT buying. If you missed all the buying opportunities that I have been writing about, and you buy now, you are taking much greater risk and buying into a resistance level. This area is an opportunity for people who want to lock in some profit, not initiate new positions. A break of the current bullish trend line will negate this momentum, so be mindful of that and manage your risk carefully. Otherwise, besides locking some in, the other best practice is let winners run. That is my plan until broader resistance levels are in play. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
27
LTCUSD: Support Holding. Watch Formations, Trend Line Break.LTCUSD update: Since the pre Senate hearings sell off, this market has found support at the 118 level and has formed a double bottom. At the moment, price is retracing along with the other major coins, but in the face of a double bottom, it is reasonable to anticipate a higher low which offers a new buying opportunity. I wrote about the 118 level recently and that level serves as the lower boundary of the reversal zone. If price is going to fake everyone out, it is most likely to happen in this zone which is basically an extension of the recent low. Price did just that. It went slightly lower, but the long wick indicates that the lower prices were rejected quickly. The market is showing that the 106 area is where the most buyers buy. In order for the reversal zone to be void, price needs to close below it. Breaking below and forming a wick is not a break with conviction. Buying into the second low is not easy to do, and if you missed it, don't worry because there is another opportunity to buy into this market at attractive prices. Often when a market is transitioning out of a trend, it is a process, not a single event. In this case, the next part of the process that would offer another chance to buy is the higher low formation. Keep in mind the the 186 to 138 area is a .618 support zone relevant to the largest bullish structure. IF this market is going to find support and bounce, this is the zone where it is more likely for that process to unfold. What needs to happen next in order to confirm the higher low is a bullish candle formation or strong close combination. For example IF the current candle closes in its present configuration (pin bar) and the next candle breaks above the high, that is a bullish confirmation and trigger to go long. Further confirmation would be the break of the bearish trend line that originates from the recent highs. Especially if this break coincides with a compromise of the recent peak in the 169 area. What will negate this scenario is if price closes weak. If BTC retests its lows, this market is likely to follow. Any retest and bullish reversal off the 118 level is another buying opportunity as well. Keep in mind the time horizon that I am evaluating is for position trading and possible swing trading. This means even though the most immediate movement may be bearish, I am anticipating it can turn in order to be in line with the bigger picture and NOT react to the noise. In summary, like I always say, it's not about being "right", it is about listening and adjusting. Since I can only play one side of the market, and since my long term outlook is bullish, I am only interested in positioning for a broader rally which takes time to unfold. Buying in this zone is still attractive, but you must consider the risk which can be evaluated from the 106 low. The best way to participate in a broader rally is to build a position incrementally, so that you are immune to gyrations or selling spikes. Once the market confirms strength is returning, not only are you in a good position, but then you can add to a winner which is a more conservative position building strategy. Focus on the risks, know your personal loss limit and use these internal reference points to structure how aggressive or conservative you want to be. In this game, you make the rules that govern your actions, not outside forces like the market. Questions and comments welcome.
BITFINEX:LTCUSD
by MarcPMarkets
12
BTCUSD: Higher Low Implies Strength. 10,500 Area Within Range?BTCUSD update: Higher low formation still intact while price is attempting to break the 9047 previous peak. This swing high break is the first sign of bigger picture confirmation of strength since early January. The next anticipated resistance is the 9887 to 10836 zone. Higher lows often lead to higher highs and that is the formation that is unfolding at the moment. Since the 8427 resistance break, I wrote about how it was more likely to see this rather than a new low. What makes this reversal pattern even more compelling is that fact that is came out of a major support zone that I have been emphasizing for weeks now. I am adding one more unit and got filled at 8854.66 which now brings my average price to 10,020. Why am I adding? My original plan was to stick with what I had while the market worked its way higher. This exception is based on the solid technical signal, and the mindset that if the risk is much lower, it is better to be more aggressive now compared to a less certain condition. This is where knowing your risk tolerance and what you are willing to lose comes into play. I am not taking a dramatic risk, and market conditions are now much more favorable, why not push while the pushing is good? Keep in mind this new portion is for my position trade which means I am planning to hold it, even if the market decides to retest lows. I am accepting that risk now. Can this be a swing trade? If you use the 8500 level as a point of reference for your risk, and the 10,500 area as your target you are looking at reward/risk of about 2:1 which is favorable. Another technical point to consider is the new bullish trend line that is still intact. As long as price can maintain this momentum, the 9887 to 10836 zone (.618 of recent bearish swing) is a reasonable expectation. The confirmation of this oncoming strength would be the break of the 9074 high which can lead to some short covering price action that has not been seen in recent weeks (see LTC for a nice example of this). What can negate this is a break of the swing low at 7851. IF this bearish scenario takes hold, I am anticipating more of a broader range bound market rather than new lows because of the magnitude of the current support zone (8171 to 4983 which is the .618 area of entire bullish structure) and the fact that we took out the trend resistance of 8427. In summary, professional speculators are flexible and adjust based on what the market throws at them. I continuously read on other forums the frustrations or complaints of participants because the analysts they are following "keep hedging their signals". If scenario A happens then expect this, but if scenario B happens then expect that. Those who are less experienced have not learned yet that markets cannot be "predicted" with 100% certainty, only estimated with weighted probabilities. You must be open and flexible to multiple scenarios, and more importantly consider the risks of the adverse ones. That is the nature of speculation whether you are day trading or investing and the sooner you accept the flexibility mindset the sooner you will be prepared for the market. In my case, I am working from a broad perspective and have positioned myself for the when the bigger picture trend reasserts itself. Can I be wrong? Sure, but I am willing to accept the loss if this market falls apart. One lesson I learned very early in my trading journey is that the market is ALWAYS right, participating in it is a matter of developing the ability to go with ITS flow. Be open, be flexible. Questions and comments welcome.
BITFINEX:BTCUSDLong
by MarcPMarkets
25
BTCUSD: Higher Low Signals Buyers Are Back, But For How Long?BTCUSD update: Higher low established at 7851 as current candle takes out 8570 which is the previous candle high. This candle formation signals on coming strength and serves as confirmation that the buyers are back in the drivers seat. I bought more at 8693.10 (Coinbase). It is not about being right, it is about waiting for the market to conform to a predetermined scenario and having a plan of action for when the scenario unfolds and what to do if it falls apart. At the moment, the higher low formation is present as anticipated after the 8427 level signaled that this scenario was more likely. There are opportunities on two time horizons here: swing and position trades. I bought more which I plan to hold as part of my position trade. The difference between swing and position is swing trading aims to define a target and risk on a more immediate move. The risk is defined by the 8069 low while the first target is 10350 which is in the middle of the next resistance zone and gives you a reward of 1650 and a risk of 700 (RR ratio about 2.3:1). That is the swing trade. The position trade has no stop, and no target and depends on incremental sizing to manage risk. My average price is now 10,310. My plan is to start lightening up on the position IF the market starts pushing back up into the 13Ks at least. It is a big picture play and I intend to hold this position for a broader move. The next resistance zone is 9887 to 10836 which is the .618 area relative to the most recent bearish swing. A compromise of this level and subsequent break of the bearish trend line opens up this market for the next broader move higher. As optimistic as this sounds, there is always a risk we must consider. Fake outs happen all the time and this is why you must consider the bearish scenario in case it happens. A break below 7851 and this market is back in testing lows mode. That would cancel out the current higher low and I would steer clear until signs of stability return. Would I sell my position that I just bought? No, I will just not add anymore. In summary, you must be prepared for when the market shows you the signs you have been waiting for. In my previous reports, I have been describing this long scenario over and over. When it appears, instead of hesitating or reacting, you just follow your plan. And this plan does not come without its risks, and I consider mine at all times. For me, when all the factors lines up and I can no longer come up with any more reasons to stay out, I have no choice but to go long. The market is presenting one of the formations that I have been waiting for at a level where bullish reversal are high probability. The way to choose to manage this opportunity is a function of your risk tolerance and your outlook. Without a general idea of what those parameters are, you should not take any trades until you define them clearly. That is a task that only you can complete. Questions and comments welcome.
BITFINEX:BTCUSDLong
by MarcPMarkets
23
BTCUSD: Slow To Go. Retest Of 7Ks Before Next Run?BTCUSD update: Bearish momentum may still be in play because of the slow 8427 breakout attempt. Watch for a bearish close or break of previous candle low for more clarity. This does not mean I am bearish, I am observing and interpreting price action as the market unfolds. Many inexperienced traders who read my reports often think my evaluation is also a reflection of my trading decisions which is not the case at all. The market may show signs of short term bearishness, but that is the market, and only serves as a consideration for strategy and risk management. If I was day trading these markets, then I would be much more sensitive to immediate fluctuations. I am building a position trade which means I am looking at the market from a much broader perspective. I often remind newer traders that before you evaluate a market, you must have an idea of what time horizon you want to trade because information is weighted differently for each time frame. For my position trade, I am looking at broader market structures and evaluating price action on larger time frame charts such as 12 Hour, daily and weekly. And at the moment, price action has gotten stuck just under an important resistance point. A decisive break of 8427 is a key indicator for the return of bullish momentum on the bigger picture. It acts as a confirmation that the most recent bearish swing is over. So what does it mean if the level doesn't break? It means bearish possibilities are more likely. What bearish possibilities? A pull back to the 7Ks for a possible higher low formation. or a retest of the 6K low. In fact, the lower boundary of the current support zone 8171 to 4983 (.618 area of entire bullish structure) implies that a test of the 5Ks is possible for a failed low scenario. How do you manage a bullish position IF a bearish move unfolds? For me, I will not add any more to my long. Only in an extreme instance if price spikes off of a slight lower low will I consider buying more. Otherwise, risk can be managed by staying flat and waiting for more bullish signals. Once again, what to avoid on this time frame is getting short, because chances of a fake out are high based on the location of this price action. In summary, having a perspective serves as a guide. Risk management and strategy must be shaped and adjusted as the perspective changes. Your perspective must start from a time horizon and that is what should determine how your information is weighted. This is what allows me to be long and not get shaken in a market that has been bearish on the short term. Short term direction changes frequently, but the bigger picture does not. The fact that this market is trading within a major support zone is a key factor in my perspective and I am not about to become bearish at a low. As the market offers information that is in line with MY outlook, I can take initiative like add to my position. On the other hand, if the market offers information not inline with my outlook, I have to take defensive measures like not adding, possibly lightening up, and waiting. In order for this to work, my outlook must be based on a fundamental premise and in this case it is about the economic role of this market in the future. This is a major difference from day trading, which does not consider long term viability and focuses only on signals at the moment. Do not confuse perspectives. The simplest thing you can do is choose one and learn what is relevant to that time horizon and what is not. That alone will put you on a much more stable path when it comes to strategy and decision making in these markets. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
22
BTCUSD: How Indecisive Price Action Reveals Strength.BTCUSD update: Bullish momentum is building off of the 8171 to 4953 support zone. A break above 8427 and close will signal that the current bearish leg is complete. The next structure to anticipate is the shallow higher low formation. What indicates strength on this chart is the previous candle which is not obvious to the casual observer. Price made it as high as 8488, which does not count as a break of the 8427 resistance because it did not close decisively above. The strength is represented by the pin bar close followed by an immediate retest of the 8171 support zone boundary. How is this strong? Aren't bearish pin bars a sign of weakness? It all depends on the context of the situation. In this case, the bearish pin bar did not result in a break of the candle low, instead price pushes back up into resistance almost immediately relative to this time frame. That coupled with the fact that price is coming out of a major support zone makes for a stronger bullish argument. IF there is a pull back and another bearish test, I would watch for the 7K level to hold as a minor support for a higher low. I believe this situation is less likely, but something to be aware of. IF the current strength stays intact, what is more likely is a pair of spinning tops or indecision candles which I would view as a shallow higher low, followed by a solid push through the 8427 level. In summary, barring any negative catalyst, this is an area to consider putting on longs that is not as aggressive as buying into a market that is pushing lows. The more conservative play would be to buy when a clear higher low formation appears. The reference point for risk would be the 6600 area which is based on a proportion of the current minor bullish swing. IF this leg stays intact, the 9887 to 10636 zone is the next likely resistance target. Just like a vertical market reinforces boldness, a very weak market reinforces caution and fear. This is not a time to be fearful. Temper your risk and your aggressiveness through careful sizing, and/or basic price formations to justify a larger time frame position. What will protect you from another adverse move is your management of risk, not waiting for the perfect moment to enter. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
22