A lot of my work consists of thinking out worse case scenarios. I pretty much look for rocks, count them, and then order the tests that overturns all the rocks. I simply act as the eternal pessimist, and let the facts prove me wrong. This way, there is already a contingency plan for the worse case scenario, and if all is well, I remain pleasantly assured.
In the case of $BTCUSD (here, I decided to look into a different exchange other than the usual where all my charts in are derived, simply to look at the same market through a different exchange), the predictive/forecasting model I use put out three "worst-case scenario" targets I would look for in your approach, as you continue to slash your way through the jungle thickets.
The targets are:
1 - TG-1 = 404.96 - 25 AUG 2014
2 - TG-2 = 386.21 - 25 AUG 2014
3 - TG-Lo = 329.42 - 25 AUG 2014
The reason I am looking at this exchange (Bitfinex vs. ) is simply that I am interested in comparing the worse-case scenarios that I have posted recently using the same predictive/forecasting model when looking at the exchange.
First, a few technical comments.
1 - The H4 level implies a impulse. The are 3 verifiable degrees in terms of wave count (whether using the standard Theory (let's call it "SEWT") or the T.S. Hennessy new technique (let's call it "NEWT") - note that the bias is reinforced by a current signal on the predictive/forecasting model.
2 - The first count at the top-left of the chart illustrates parenthesed numbers, and reflects a potential NEWT count. I say potential because a longer impulse would be able to verify its validity.
3 - Assuming that price as more space to fall, and that the current vawe-based situation puts us in the middle of a Wave-III SEWT count, then I would consider TWO potential scenarios:
-- a - ONE that would have price complete a A-B-C correction from the lower-achieved (5) point, crossing the steep overhead resistance symmetrically (see the S1 to S2 speculative projection);
-- b - ANOTHER that would have price continue its downward course along its overhead resistance line and achieve a later geometry to conclude at Point-III (Point-III is defined as a strong bias based on the model's new and future R/S levels defined in TG-1 and TG-2.
In any way, at this point, this is all speculative game theory, looking for the multifaceted ways of getting killed and thinking up ways we would have survived by devising a plot before getting killed - Sort of a future retrospection (huh?).
As explained recently to another trader, I do spend quite a lot of my time looking at internal strength of the asset, once a direction and a target is defined. This is an important part of my trading methodology, as price does have some degree of mechanical nature, and looking for the piece and parts that would give its legs to get from here to there is really limited by the available geometries that repeat themselves across all times, charts and assets.
Let's see where this leads us. Feel free to peruse through the "Links To Related Ideas" for recent and older BTCUSD charts where this predictive/forecasting method has been applied quick satisfactorily.
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The intermediate timeframes offer the chance to look at this currency under "buy at the low" opportunities. I suspect that some traders are running after this asset like a toddle runs after the wagging tail of a golden retriever, but it's the head of the dog that will determine the trend, not the tail. So far, the mechanisms that are put into place by various businesses (large and small) reflect not only an interest in the Bitcoin phenomenon, but a real financial belief that it will hold a place in the future.
Now, whether this translates into an improved or dismal valuation of the currency is a matter of debate, of course. All I have is a palpating cane in my model and a dim intuitive light in my understanding of intermarket analysis to guide my opinion. The rest waits in the recesses of future events, and only then will we know how foolish or smart one must have been to take one action or another.
Unfortunately, there is no forecasting machine strong enough to vacuum the future into the present. That same vacuum works well to clean past mistakes though. And this is all we were ever given to learn.
Finally had to GoPro in order to save it as a hands on reference...keeping your logos as requested before.
One question re your targets...the date annotations you give them...do they mean you've identified them on that date? Or you're predicting them to be hit on that date?
If so, the 25 Aug dates make for some dramatic targets tonight?
The line is a structural top against which any bullish push is likely to get some significant push-back. A M15 trader could use that to get short, say 38.2% from prior impulse.
Do you see much overall difference between the Stamp and Finex chart patterns? They seem follow each other fairly closely albeit with a few exchange specific moves now and then.
Feel free to post that segment of high volume vs. price.
However, the directional bias of the market remains bearish in the composite timeframe (where most retail and institutional players would overlap their activities), therefore, I would look at this as a net bearish event.
Had the move resulted in the model change from bearish to bullish, then I would have called it an early market reversal sign, but this is not what resulted from the event - I wish I knew exactly what is going on among large institutional players as far as bitcoin goes, but I was suppose that next week will likely reveal the net influence of all of their machineries.
I have just finished writing an explanation of the methodology I use in my trading. Sort of a game theory application in which I define the application of Fibonacci projections for risk management to my trading. Very simple and approachable.
Here is the link:
Hope this shed more light on how I do things - Caveat here is that what I am revealing leaves out details of the predictive/forecasting mode. However, you will see how irrelevant it becomes once you concentrate on the geometric information revealed to your mind's eyes, using the Hennessy system as an overlay.
Hope you enjoy it. Feel free to contact me with any question, or share if you find the information valuable - Credit given to the author is courteous and always appreciated.
EXAMPLE OF DAVID ALCINDOR'S HYBRID USE OF BASIC GEOMETRY, HENNESSY COUNT AND FIBONACCI LEVELS:
Let me know if I need to clarify. Feel free to pass along if you like it. Here too, credit to author is the cool thing to do - Much appreciated.
$BTCUSD broke through a significant overhead resistance; Chooses symmetry:
via @tradingview | #$BTC $USD #bitcoin
I should have become apparent by now that, given the two arrows left yesterday on the chart like a fork in the road, price took the high-way and turned its back to the low path.
If you read recently my explanation of Hennessy's wave count, you will see that this example illustrate the game theory approach to this trading conundrum, by simply taking the best two possible pathways given a set of possibilities, on the assumption that although price can randomly walk across the electronic field, it still has to submit itself to a set of rules that characterize, and perhaps help forecast to some extent, how it should proceed, much like you would know which limited move of displacement characterizes each piece of a chessboard game.
In any case, while it remains to be seen whether price will move in the forecast direction towards TG-1, TG-2 and TG-Lo, the most immediate interest here is to see whether price will unfold in a way that would adhere to certain geometries (here, we are looking at a potential symmetric unfolding across the overhead resistance, just crossed), or whether price would push a little further to mind the structural resistance at 561.47. One thing remains sure for the time being, is that the model remains bearish - I will assume that you have your own directional and market strength indicator - such that the lower targets remain valid.
Now that we have some idea about the potential height of this corrective move, we can safely define Limit Orders, as well as set safely-distanced Stop-Losses, and maintain the targets down below in sight.
Therefore, the game theory whereby a solution concept is devised based on a set of assumptions (e.g.: predictive/forecasting model; price movement expands by remains tethered by Fibonacci-limiting values), rules (e.g.: structure as once support and now resistance; Wave count), and known parameters (e.g.: Fibonacci numbers) can be used as a way to project a potential directional outcome, while a risk management, based on the same set of rules, can be defined to cast objective entries, profitable or loss-limiting exits.
It's all how you use what you already know:
1 - Trendline
2 - Fibonacci
3 - Standard patterns
$BTCUSD Elliott + Hennessy wave count overlay; Moving along geometric forecast:
via @tradingview | $BTC #bitcoin
If you have been following any of the new development lately, you will see that I have spent a considerable amount of time sharing essential technical elements of the methodology I use in predicting direction, trend and forecast S/R levels - Some of it can be glanced over several rooms I entertain, such as the Predictive Analysis/Forecasting Room ( https://www.tradingview.com/chat/#5eHLst6YxeVqGlaO ), the Forex Intel Room ( https://www.tradingview.com/chat/#xsmm44S00HaO5wCZ ), as well as the e-MINI S&P500 Room ( https://www.tradingview.com/chat/#Fu3tMkKy660WGNhU ). In the last room (e-Mini), I have gone into step-by-step, detailed explanation of targets, using as many frames as possible, so as to demonstrate the best I could to the peeping trader the level of technical detail invested "in the moment".
Non of this information is difficult. It merely makes use of indicators and measurements that are readily at your disposal, most of which might already be known to you.
Here, we return to the $BTCUSD/Bitfinex chart to assess our situation today. If you recall, yesterday was somewhat of an expose' as I attempted to detail as clearly as possible the two possible pathways that could be anticipated. Admittedly, this will take quite some time, but I have decided to demonstrate how fractals and occult geometries can easily be derived from already known patterns of development. As I mentioned earlier today, everybody has a gait, and everybody leaves footprints. This is in this manner of thinking that I am able to match my predictive/forecasting targets with the probability of a price action pathway.
With the recent queries on Hennessy wave count, I also attempted to simplify his methodology down to the most basic level, such that I have come up with pearls and recommendations that should make it quite easier for the wave counters out there. Here too, the explanation is given in the links offered above.
At this point, I believe that price will know a slight decline to the level defined in the (attached) chart, but will maintain a net bullish move to meet us at the marks left on the chart, either at the termination of the 4th Wave (4C), or at the structural level valued at 461.47.
As mentioned before, the exercise here is based purely on a game theory, given a set of infinite possibilities, but knowing the adversarial gait and footprints. Feel free to refer to the chess board analogy I offered in the links above as well. Whether price prove to follow strictly or loosely the geometries laid down is not so much important as having defined a narrowed-down set of options based on objective data derived from either understanding of certain market rules (e.g.: velocity of price is limited by its ability to expand or contract strictly based on Fibonacci numbers, such that expansions to 1.131, 1.414, 1.618 ... and contractions to 0.214, 0.382, 0.618, ... 0.886, are the quasi-mechanical gears that will cause a rate-limiting signature through which a gait and a footprint can be defined.
If you add relevant geometric envelopes, such as basic patterns in Bats, Sharks, 5-0 and what not, then you not have a quasi-physical ground over which the gait can evolve and the footprints left in a narrower geometric corridor.
Today, I have been able to demonstrate this through the e-Mini sing M5 and M15 frames, which at the time of this writing remains closed spoused to the geometric contours that were assigned ahead of its actual development. I hope that this stimulates further your interest in technical analysis, and that you will take on the challenge to read more on your own. If you need referrals, I can certainly come up with a small but relevant bibliography as well.
Basically, what you are looking into here would be the same as what a structural trader would look at, when considering to what level could this likely correction rise to. If there was no such thing as a Fibonacci scale, or there was no possibility answering this question other than letting the recent price action tell you what is likely to unfold, then a simple glance at the structures would do.
In this case, we are looking at the possibility of price eroding its way upwards, past the single downward spike and into higher levels where S/R have been defined.
It appears to me that the symmetrical projection of the current 4C point (which remains underway) would define a plausible level of reversal, as it also corresponds to a cluster of S/R levels that marked the very first downward reaction following the highest level in the chart - See the highlight in PURPLE called "Bearish Entrenchment":
So, at the point, price remains in a probable correction, with a possible overhead range defined by historical clusters of bear vs. bull embattlement, and the overall trend denotes an incomplete 5-Wave count per EWT, using an alternate count to simplify the measured counts and reinforce the expectation of a bearish net outcome down to the predictive/forecasting-defined targets below.
Time is the only late comer here, and it's the only one capable of telling the story. After it happened, that is.
I will be adding the following:
1 - LTCUSD - @ronfkingswanson: What exchange should I consider? Discussion of late recommended BTCe, BitFinex - However, outside research/data suggested NO REAL differentiation in comparative volumes among the 3-4 major exchanges. It indicated that since the fall of MtGox, which used to handle 80-90% of transactions, the Bitcoin crowd has since been scattered across all other available exchanges.
There is a prospect of further consolidation among these exchanges, and I suspect that more "interventions" as may have happened against MtGox could occur once again so as to trim more branches and offer more "control" over these exchanges, but for now, I am not sure which I should include in the analyses.
Care to comment? I trust your judgment considering how long you've been at it and knowing your fundamental grasp on this currency.
I have spent countless hours, money and brain power trying to join and be intimate with sheepish herds of conventional indicator grazers. However, it has taken many years to realize that being a love wolf far outdoes being a wooly gregarious animal in terms of understanding of the whole picture of trading, markets and mathematics.
In offering my unconventional thinking - introducing Junior traders to the likes of Constance Brown - I like to think that I provide what was missing the most in my years, so that curiosity about trading, market analysis and the wide spectrum of thinking beyond institutional constraints, becomes an option to the trader interested in becoming his/her own self-sufficient thinker.
I always say that price is the carrot which dangles at the hand of the institutional stick as a way to explain that there are other ways to look at Forex, Indices, stocks and what not. I do not use price in my analysis as a matter of habit by now. I recommend all other traders to pare down to 1-2 indicator(s), and start looking at them as non-price events, where the market may reveal its intentions more clearly that the filtered method by which price often tricks the misinformed herd.
So, if you are a new trader, I highly recommend that you not fall to the hypnotic price method, and that instead, you don your own filters by studying the market in the most unconventional ways. The most efficient method which I postponed the longest has been Elliott Waves Principles, and most recently Gann's methodology, all of which appear so far-fetched, but have stood the wears of time.
A personal method I use is simple geometries. I have also studied the RSI for many years, read books that clearly where revealing truths or perpetrated errors, but I have decided to ignore it all (as RSI believers would coalesce under their own sort of peer-pressured influences) and follow my own rules, which are intrinsic to the predictive/forecasting methodology used in this and other charts (anything that moves, really).
Feel free to discuss and comment on any particular aspect of trading that you enjoy or are reluctant to use most. I like to remind myself that what causes the least curiosity as an object of new learning is probably because it represents the most painful, arduous or lengthy thing to grasp, but may also contain all the answers we seek. I found it to be true regarding Elliott Waves (still a student of it, for life), Gann Square of 9 (still at the fetal stage of understand what it really means, but quite impressed by its temporal resiliency, since it was Gann's plagiarism of a more ancient culture using this method), and satisfaction in being more wrong than right - otherwise how well could we learn things.
When I joined TradingView as a MOD, I looked at the popularity of the BTC families, and at the time, it appeared that MtGox had the widest audience, hence the most liquidity.
So, I decided to chart BTC as a matter of testing my model - I like to analyze under which set of dynamic conditions (consolidation, break-out, upswings or downswings), or which set of temporal condition (M1 to DAILY) would the model fail to provide a reliable prediction and forecast.
As I was doing this and posting them - I really did not and still do not mind being wrong, since it is really testing the "Nulls hypothesis" of the model. As the model proved able to provide predictions and forecast that would hold well over any set of conditions, it also seemed to attract different sorts of attentions.
At first, I proposed that as BTCUSD had gone to the thousands in value, that it would possibly go to the 600, then 400 and then mid 200's. I collected a fair number of irate replies, but that was not that interesting as collecting data that proved the system solid over time. In the same time, bitcoin traders demanded more analyses and more questions, which I took as a challenge to the Model. Hence, I offered multi-timeframes, and them across exchange analyses, predictions and forecasts.
So far, it has held well, but I continue to regard this currency with the same scientific curiosity as I would any other price-moving asset. Just as with the Forex pairs, indices and other asset I chart, I do not trade or possess all that I chart.
A good friend of mine living in Colorado is a gold trader. So, I started soon after his interest in my charting and analyses to post Gold-related charts.
My real interest is more academic than engaging in some getting rich scheme. I have received offers for the model, but none is for sale, and no lesson could ever reveal its content. It just cannot happen.
If I ever had to open an account, I would ask this group of bitcoin trader more question about it, but the fact that I do not own any of this currency and continue to analyze it for what it does, and not what it would represent in ownership, I feel that I can more freely provide the predictions and forecasts with the objectivity that would be required had this been a paid service.