Shorting Bitcoin? Probability Says It's A Bad Idea.

Bitcoin showing bearish engulfing candle (outside bar) which can be interpreted as a MOMENTUM reversal (not to be confused with a TREND reversal). The broader structure is still BULLISH which means probability continues to favor longs. This does NOT mean we can just buy at any price. The objective is to ANTICIPATE the next inflection point or support level where PROBABILITY FAVORS buying activity. That level is the 10,500 AREA. In order for us to share a new swing trade LONG idea, price not only needs to test this area, but also produce a setup that fits within our rules.

If you find yourself caught short from the low or long from near the high, then you are most likely reacting to information. That is the key signature of the herd mentality which is part of human nature. Anyone can learn to read a chart and place orders, but most people aren't even aware that the real obstacle that stands in the way of consistent performance is their own natural thought process. This is a game of understanding your own behavior relative to the herd, and it is NOT intuitive.

Comment:

Although a new buy signal is developing, this is a tough spot for a new swing trade because of the 11,500 to 12,200 area resistance zone. For smaller time frames strategies, it can be a worthwhile risk, but not for the strategy that we employ, The reason? Our rules prohibit us from buying near highs. The probability of the location is just not favorable here. A break of 11,450 can lead to a test of the low 12's but for us it is NOT about action, it is about risk. Since we our strategy looks to capitalize on broader moves, the potential at this location is not worth the proportional risk that we have to take. We simply WAIT for a retrace in order to gain a better probability and potential that is worth the risk. Capital is limited while there will always be more and better opportunities.