My2Sats

BTC Update! Bulls tire out. Higher lows fail and down comes BTC!

COINBASE:BTCUSD   Bitcoin / U.S. Dollar

We saw a near perfect example of traders rushing to the exits on a loss of our higher lows. Following the same stair stepping up with new higher lows each day BTC was forming. We did have a bit of a sideways action and some may have decided $10,630 was a higher low and lost yesterday with a break down to $10,555. I personally did not have $10,630 as the higher low due to price action being more sideways and not giving the typical lower high and lower low pattern on smaller time frames to confirm anything for me. $10,555 became the higher low I watch. I then set my stop loss before bed a few dollars under this level and slept comfortably knowing it was a profitable trade even if I got stopped out. I zoomed in here on 15 min chart and the yellow line indicates the higher low level traders were watching. Once we finally broke it early this morning, we saw an immediate flush down and find ourselves testing $10k.
So I am safely back to cash, profits locked up rather than holding through that drop . They don't always play out perfectly as trading does not guarantee anything. Trading is a probabilities game. And the probability of price dropping on the loss of higher lows is significant. So now we zoom out to daily chart . $10,953 is our lower high on daily. $9,470 is our must hold on daily. Anything above $9,470 will put us in an equilibrium so potential for scaling back into positions here soon for me and utilizing $9,470 as a stop loss. I'd like to see bears get one more leg down just to decrease my risk but price did bounce right off a Fibonacci line so now bulls need to prove themselves and start with some higher highs and higher lows on smaller time frames (think 15 minutes). Otherwise I'll sit patiently in cash and just wait.

Just My 2 Sats!

Comments

May i ask what pattern for scaling in do you use?
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My2Sats PeterMeter
@PeterMeter, it depends. If we have a known major support level nearby it makes it much easier. I typically do 3-5 buys and layer them in as we approach support knowing the actual support or just under is my stop loss. Some like to do equal %'s for their buys (example 4 buys and each is 25% of their capital but that's really just a matter of preference and I mix mine up based on lots of factors such as how quickly price is falling, was the general trend going up or down previously, is there news causing the drop, etc). I also will often utilize Fibonacci's to scale in based on those. And main other thing is if price does not fall far enough to get any or all of your buys and starts reversing, I do set price alerts for trend changes going back up and don't mind then rebuying on the climb. I'm usually just less aggressive on those buys and chalk it up more as give me a small piece of the action but I didn't get my lower buys so don't want to be chasing and going in aggressively.
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