aurie
Short

4H Consolidation Trade

OKCOIN:BTCCNY   Bitcoin / Chinese Yuan
6 months ago
Ok so, I'm drawing some conclusions here that can help take some positions here right away.

First, this descending blue trendline looks like a point of interest. Since closing below it, we have not once closed above it. That can fall apart anytime but some value here on direction for now.

Second, I'm going to factor a bearish trend (extended descending red channel) until we challenge this. Important inflexion point for me to confirm upside.

Third, we've seen a pretty clear short term uptrend in prices but we're giving up the bottom now as we wedge into resistance. Weak.

Price is telling us that we're still seeing a lack of demand. Although we took out a small level, we're still seeing lower highs on decreasing volume overall. Not really buying it until I see something more. Won't be heartbroken if we breakout here because it just looks nasty.

As you know, I'm looking for long cover but this not the spot. Short term bearish technicals are telling me there's room to the downside here. We've retraced to 3550 quite a few times in this consolidation period so any shorts could probably target there pretty safely.

I'm skeptical how many times this trade will play out so beware of the headfake here. You might want to play the stops of your intended entries in case of a nasty stop run. Keep it tight though because this is a bullish trend in the long term.

Let's remember though, we're still extended considering the size of that move. Bitcoin is known to give back more of these towering runs. Patterned with signs of no demand, I think expectancy here is bearish .

Sell it. At the top of the range like this your entries can hug your stops. That means bigger size with more profit range. Similar trade to yesterday. If we're targeting 10R you could get this trade wrong 9 times and still cover. Let's see how it does. Should at least get our razz on if we're going to watch consolidation.
6 months ago
Comment:
snapshot


An extreme example of this trade if you're playing stops. Will need to be careful to recognize if its a breakout or stop run though. Don't want to sell the breakout - for sure not.

Probably won't get that much if it's a good trade though so keep your eyes peeled for entry signals on 15M volume bursts. Need to keep your stop at new highs so factor your risk accordingly.
6 months ago
Comment: Remember if you've really got the highs it should be a hot price and see quick rejection. If you enter and we consolidate at your entry, it's probably the wrong spot.
6 months ago
Comment: Also, with something like bitcoin, you can put orders way out the money and have a decent shot at wick fills. That would be ideal in this trade I have above.

Usually like to wait for market confirmation, but this gives you a pretty good idea of a few entry conditions for this trade.
6 months ago
Comment:
snapshot


Wooo look at that. Huge blow out right on our spot. I don't think it even gave you chance to get short it ripped so hard there. If it did, you were buffed out straight away.

That's what happens when a trade gets too crowded.
6 months ago
Order cancelled:
snapshot


Already extending to the top of that inflexion point. Time to reassess but this idea is done.
6 months ago
Comment: In hindsight, I still didn't like that spot for a long. I'm not mad about missing it because there was no FOMO cover there. This really came out of nowhere. Interestingly, intuition told us this trade may be a trap.

Again, really light volumes in daily terms. Looks more like market making than actual demand.

Will be important to watch how it reacts to this inflexion point from here.

Will post an updated idea once this sinks in.
6 months ago
Comment: Pretty much all pumps come out of nowhere I suppose. If you had pending orders on this trade you would have been filled with big blowout potential, as we've been talking about shorting these bullish runs. If you were waiting and watching you probably didn't even have a chance to sell this. Especially not when those first candles started coming in.

This is why you wait for a burst to put in the range and take the retest. Way safer spot than trying to get in front of it.

You can really see the game of chess being played here. That was a really high expectancy shot that's already repeated and boom, that's the same spot we pump from.

Not a coincidence. This happens all the time when you're on the pivotal spots. In this case, we were pretty much exactly on it.
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