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BTCUSD: Sell Off Slows At Key Inflection Point?BTCUSD update: The 9208 support level is still in play as price action unfolds as a spinning top formation (at the moment). It is too early to call this a bullish reversal, but price is in a high probability area for such a scenario. If the market produces a spinning top like the one visible at the moment, it will then complete an inside bar formation. Candlestick patterns alone can appear anywhere and often do not offer any special information about the balance of power going on inside the order flow that shapes the candle by the time it closes. It is the location that makes the formation more actionable and in this case we are at such a location. As I wrote about in my previous report, the 9208 level is the previous swing low, it is slightly below the 9604 level which was a minor .382 support. As long as price stays above this general area, it is indicating strength. By staying above 9208, the market is maintaining a broader higher low formation and is consolidating on a larger degree. This can even be considered a larger Wave 2 formation if it does not fall apart. The 10288 level is the minor .382 of the recent bearish swing and IF price can close above it, that would be a confirmation that the next bullish swing is more likely in progress. Keep in mind, what I just wrote is one scenario out of many. Another scenario is price can continue to sell further into the reversal zone which is contained by the 8659 support boundary. This is often where traders get faked into selling longs or worse, sucked into a short position. Can it break lower and keep going, sure, but I believe that to be a less likely scenario because of the overall bullish bias in this market. In summary, managing a position or timing a swing trade using a chart is about recognizing the meaning of a chart or candlestick pattern in relation to the context of the environment it is appearing within. Price at the moment is still in an area where there is a higher probability that a bullish reversal unfolds. Knowing exactly what that looks like, or know exactly when to take action is a function of experience. Just because I describe a scenario does not mean it will happen, it describes what I want the market to show me if I am to do anything further with the position that I have. I define my own rules that determine how I make decisions, and then I let the market prove itself, or not. By doing this, I am letting the market lead, I am not forcing my own ideas upon it. Opportunities often materialize during the less exciting market environments where the herd gets bored and loses interest. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
24
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
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
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: Lower Prices Likely? Unless Reversal Pattern Appears.BTCUSD update: 10429 minor resistance has held and price is now retesting the 9600 support. Unless this market can show a reversal formation on this time frame, price is likely to push lower. Like I highlighted in my previous report, the lone bullish candle (that at the time of writing was a spinning top but closed stronger), was never able to close above the 10429 resistance (.382 of current bearish swing). Closing above that level is the signal that I require to confirm that bullish momentum is back. The 9604 level (.382 of current bullish swing) and convenient location for a Wave 4 bottom is being tested again. One bullish reversal formation that I would like to see is the failed low in this area. That is when price goes slightly lower than the previous close and then closes strong. In this case, IF this scenario were to unfold, the next candle should be a pin bar, or engulfing candle. If this occurs I would consider adding to my position. What if you took the aggressive long swing trade that I described in my previous report? It is possible you have been stopped out if you used the 9600 level as your reference point. Remember swing trades and position trades are not the same. They each operate on different time horizons and carry different risks. People that trade smaller time horizons often take on larger positions faster and is why a stop must be used in order to control the increased risk. Position trades are accumulated over time and are more in line with principles of longer term investing. This means numerous small positions add up to an aggregate position with an average price. My risk is controlled through strategic sizing rather than a stop which allows the bigger picture to play out and not get kicked out of a position too early. The risk in this type of trade can be bigger, especially if the overall outlook or premise changes. I understand and accept these risks. What about the Wave 4 bottom? The current support area is a convenient place for a Wave 4 to Wave 5 transition to take place, but does not mean it will. Typically, wave 4's are tricky and can include numerous false starts. Keep in mind as long as the low of Wave 4 does not over lap with the high of Wave 1, the bullish impulse wave is still intact (which means there is plenty of room for a minor double bottom or failed low formation). IF price action over laps with the highs of Wave 1, then the impulse would be negated and the market would be signalling more of a range bound condition rather than a trending one. In summary, as long as there is no reversal pattern, it is reasonable to expect price to push into the low 9Ks or even retest the 8174 to 7230 minor support zone (.618 of recent bullish swing). Before I add to my position trade, I would like to see a solid form of bullish confirmation such as a double bottom or higher low off of the current level. Unless I see that, I will just sit on what I have and wait. As a trader or investor, you must always be prepared for anything because nothing is certain in any financial market. If this market falls apart, I can handle it because I am sized appropriately to my risk tolerance. If you can't handle it, that means you are in too big and lack a well defined plan. I cannot emphasize enough that if you cannot handle losses, then you are in the wrong game. The ability to embrace risk is what facilitates rational position management and trade criteria no matter what time horizon you are participating in. The inability to lose is what facilitates fear, and scared money never wins. When it comes to timing financial markets there are countless pieces of information to consider and compare, and it can be confusing to say the least. To help clear this confusion, begin with broader time horizons and a focus on risk. Participation may be much less eventful, but the outcome will be more in line with best practices which often lead to more positive outcomes. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
11
BTCUSD: Is 9600 Support Low Of Next Swing? BTCUSD update: Since the bearish pin bar off of the 11700 area price, has been retracing and has tested the 9600 level to produce a spinning top formation. This can be the beginning of the next bullish leg which can test the 11700 peak or higher. In order to justify a long position, I would wait for particular conditions to unfold first. Maybe now you know why I locked in 15% of my position off the 11700 peak. I did not know for sure that price was going to retrace back to the 9600 area, but I saw the signs of selling, and recognized the potential. Now that price is finding support at this level (.382 of recent bullish swing), is this the time to start buying or adding back to my position trade? It is too early to tell. A spinning top formation is not a reversal candle. It just indicates a potential change. On top of that, the candle has not closed yet which means it can still close bearish. There are many different formations that can occur at this location that can prompt for a new position, but each formation carries its own degree of risk. For example, a spinning top close followed by the break of its high is a bullish trigger, but not the most reliable, which doesn't mean it won't work. Taking a trade like that all depends on your risk profile. Also this trigger would offer an attractive swing trade opportunity since risk can be quantified by the 9600 level. The short term target would be around the 11500 area which puts reward/risk at around 4:1 (assuming a 10K area entry). A more conservative plan is to wait for a higher low formation, and/or close above the 10429 level (.382 of current bearish swing). By waiting, you get less attractive prices, but you are entering with momentum clearly in your favor. This is more appropriate for my position trade since I plan to add about 30% more. The target for this trade is the mid 13Ks to 14K area since it is looking to capitalize on the broader move. One advantage to having the position trade is even if there is no clear entry, and I never add, I am still long and benefiting from any bullish momentum that materializes. I am also willing to take the risks associated with this type of position as well. By the way, I get a lot of requests to include wave counts on my charts. I am always aware of relevant counts, but show them on my chart when they are clear and offer insight rather than confusion. This situation offers that type of clarity with the current low fitting into a minor Wave 4 bottom. Which means this count is now inline with the broader bullish premise behind this market. This type of impulse wave, especially when the market is in a Wave 4, is the simplest and most effective way to use Elliott Wave in my opinion. Since 3 waves must be in place and adhere to the impulse wave rules, Wave 4 becomes the easiest wave to anticipate. In summary, it is important to keep in mind that just because this market is showing the possible beginnings of the next bullish leg, it does not guarantee there will be follow through. IF this candle closes bearish (it can happen), especially below the 9600 level, the next possibility is a retest of the 8171 to 7239 minor support zone (.618 of recent bullish swing) which overlaps the broad support zone that I have been writing about for weeks. If price has trouble pushing the minor 10429 level, the bearish scenario becomes more likely. In this situation, I will wait for the lower supports to be reached and then look for broader reversal formations to add to my position. I am holding this trade for a broader move and willing to take the associated risks. I like to think of this as managing and building inventory until peak season, and this strategy will work as long as my long term premise holds true. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
26
Litecoin Short Term TA Day 14Well it looks like Litecoin is back to being bearish for the time being. We have a base support of $190, which is the lowest it has hit in this bearish run. If that is broken, I believe the lowest we could see is in the upper 170's. I do believe we could see a falling candle hit this mark before bouncing off the trend line. Its possible we could be seeing a pattern of higher lows like we saw in the last bear market run. To confirm this, we could see a quick run up to about $205 with a bounce off that back down below $200. $252 was the highest we reached before turning bear, then we reach bounced off about $203 and made it to $220.50 before reversing again. That $220.50 will be our main resistance in order to reverse this current trend. Sorry for the short analysis but I will make sure to update this if $190 is broken. Check out my previous day TA's in the related ideas section and like/follow if you want to stay up to date with my daily TA's. EDIT: You can't see but I labeled "A" in the upper 170's as a good place to put some buy orders in case it does reach that low.
BITFINEX:LTCUSD
by whatsinthecupsir
3
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: 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
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
LTCUSD: Price Holds Up In Bearish Environment?LTCUSD update: Bearish momentum continues to hold these markets back, while this market is the only one showing a potential higher low formation. In a situation like this, it is best to be more conservative until solid reversals materialize, especially if you are long. I have been building a position in BTC in this environment, positioning for the broader reversal process which has not materialized yet. The reason why I do not get shaken out is because I was careful enough to keep my sizing manageable. This is why I kept emphasizing avoiding buying on margin. Overreaction is commonplace for all of these markets, and depending on the time frame you chose to participate, you have to stick to the plan. I chose to buy into to the bigger picture which looks to capitalize on broad moves, but you run the risk of situations like this. Right now, in terms of formations, this is the only market showing any signs of a reversal formation within a major support zone. I want to highlight it because this is the look that you want to see in the other markets before a broad reversal in momentum is more likely. In this case, you have the low established by the pin bar, followed by the sharp bullish candle and now the retest of the low all happening within the 186 to 138 support zone (.618 area of broad bullish structure) . On top of that, the pin bar low rejected the 118 reversal zone boundary which is what happens more often than not in these extreme price areas. IF this market is going to prove that momentum is changing back to bullish and the next leg higher is in play, it needs to establish a higher low formation, like it is trying to do at the moment or retest the 118 low and form a double bottom (failed low). The more conservative play is to wait for the bullish confirmation of price pushing back above the 186 upper boundary of the support zone. The mistake you want to avoid is to become bearish on lows. Keep in mind even if there is range bound price action above the 100 level, this entire formation is still one broad higher low compared to where price was months ago. It is very easy to be consumed by hype and exaggeration. In summary, there are plenty of good prices to buy across all of these markets. The key is not to buy too much or if you want to be more conservative, wait for confirmation of momentum change which means you will give up the better prices for a more favorable environment. Since my broader outlook has not changed, I look to capitalize on both situations. I made some aggressive purchases of BTC, and before I continue to buy any other coin, I will wait for the bullish momentum confirmations. This way, if the market continues to correct, my loss is controlled and manageable. Choosing to be conservative or aggressive is a function of your personality, risk tolerance and experience. I tell people, these markets are not like stocks, they are risky and if you cannot embrace the risk, then you are in the wrong markets. Questions and comments welcome.
BITFINEX:LTCUSD
by MarcPMarkets
7