BTCUSD - A set up that would allow me a long for a 14.25k target

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
There will be differing opinions on the wave count to where we are today. I'm comfortable trading on the conviction that we a completed Primary 5 (V) wave impulse up to 11.8k on the 21 Feb, have gone through a Primary WXY consolidation period down to 9.3k on 26 Jan and are now in a new, albeit relatively small, Minor 5 wave impulse up which could be the start of a bigger new Primary 5 waves. Within this, we have completed Minor Waves (1) and (2) quickly and are now finishing off Minor Wave (3).

Where from here?
First we need to finish off this Minor 5 wave impulse and then do a corrective wave. If the smaller Micro level count is correct, given we are seeing an extended Minor 3 wave, I expect to see the Minor 5th wave equal to the Minor 1st wave. The numbers will move as this plays out but given the current information, this will likely take us to between 11.2k and 11.6k. This would lead the corrective wave to go between 0.382 and 0.618 (10.6k and 10.2k). It's then open as to where we go from here, either down for a bigger correction or into a new Primary 5 wave impulse up.

My plan
I could try and enter in the middle of this current Minor 5 wave impulse but doing so on the 4th wave doesn't offer a great risk reward . For example, we could see a more aggressive 4th correction, truncated 5th, or the wave count could simply be wrong. I'd also prefer to see the retrace of the full Minor wave complete and a reversal back up instigated enter us into a new Primary which would be the big 3rd wave of a Super Wave formed from the bottom at 6k.

As a target, using fibs from this first Minor wave, my expectation would be that this Primary wave would take us to around 14. 25k . There's still a lot to play out and whilst I have indicative figures and a sense of direction, I will wait until the set up unfolds to define my entry, targets and stop loss.

This is unlikely to unfold in the exact way as above but hopefully the general moves will align to allow me to enter a trade with a good risk reward . If events unfold in a very different way I would reevaluate as we could very well be heading South again. Equally we may not see the retraces I am looking for and I might miss an opportunity or have to enter at a higher price. The key is to do your own research and plan trades that work for you.

** Wave annotation, largest first
Super : Large black e.g. 1
Primary : Bold grey e.g. iv
Minor : Circles e.g. (4)
Micro : Small light grey e.g.4

Comment: Just to be clear, I am looking for something like this as my set up BEFORE I enter a trade

Comment: That Minor wave (3) ended earlier than I anticipated. The 0.318 fib line has offered support (for now). *IF* this holds and moves up for wave (5), using wave (1) length as a basis would give us a local double top at 11k. If we retract further then the wave count at the Micro level is invalidated. I'm saying it is not at the moment because we did not have a 1HR close in this area.

This set up is looking increasingly less likely to materialise. To enter a trade I'd want to see this wave (5) and then at least 0.316 retraction. Ideally I would want this contraction coming from sideways movement over a relatively long period so that the long term down trend can be established as a support line.

Comment: I explained in a previous comment, the planned set up is based on price rather than time. This is currently unfolding as per planned set up, albeit with a lower Minor (3). The Minor (4) has bounced off 0.5 Fib and 4HR 50EMA.

There's still more to be done before the setup is confirmed, but so far I'm happy with the path.

*IF* my count is correct, using the wave (1) projection, we could be going up to around 10.9k for a truncated Minor (5) before then entering a corrective wave.

Comment: BTCUSD has so far stopped in the target area for the Minor Wave (5). It may keep going up, but my trade set up would see it coming down to a 0.318 or 0.5 fib of the Primary Wave i. I'll then look for a bounce to buy in.

Comment: An alternative count could have seen us finish the 5th wave on 28 March and this the first leg of new Primary Wave 3. In that case we would likely bounce earlier

Comment: I'm happy with the formation that is unfolding. My conviction is that we just completed the Primary Wave i as the first part of the Super Wave 3. The retrace on a Wave 1 can be up to 100% (9,300) but more typically 0.5 (10,300) or 0.618 (10,000).

I will be looking to go long at a reversal in the region of 10,500 to 9,300. The stop loss would be the wave count invalidation, which is a breaking of 9,300. I'm expecting this set up to take at least a day or so to unfold.

The ideal scenario would be around 10,300 as this lines up with:
- 0.5 fib
- Long term diagonal trend line
- Wave 4 bottom of this recent Primary Wave i
- Historic support

There's a small chance we could head up a little again for the Micro Wave 5 within the Primary Wave 1 but that would not change any of my assumptions.

Comment: I'm happy with this formation. In the comment above I said we could head up for a Micro Wave 5 and we have done that. This creates a slightly nicer formation to buy into a retrace as it is more likely to bounce off the diagonal down trend at 0.5 fib.

There are various other counts that could be unfolding, the main one I can see is a scenario where we posted a Minor (1) 11,065 and we are in a larger Minor Wave (3) going up. I have marked the (1) in orange. I'm open to this but will not trade it because the risk reward doesnt work for me.

Comment: For now, this is unfolding as expected. I ended up selling some of my 8.5k position last night. I had not planned to sell at this stage because my overall conviction is bullish. However, the set up did fit within the plan I had outlined and the price action that unfolded made it irresistible.

An Ending Triangle had formed at what was likely to be a Micro 5th wave of a larger Minor 5th wave. This is typically a clear signal for an entry to short.

The target was the 10,500 or lower I've been talking about for a while. The stop was extremely tight, just above the triangle which gave huge risk reward of 16:1.

Entry: 11506
Stop : 11567
Target: 10500
R: 16

Comment: On the short term, BTC has found support at the 0.618 of both the last leg of the Minor (5) Wave and the 0.382 of the complete Minor (5) Wave. This might hold but my conviction is that we will continue down to a correction of the larger Primary Wave i. In the meantime I have moved my stop on the short to my entry price so that trade is now risk free.

There is interesting convergence of fibs at 10,680. 0.382 of the Primary i and 0.618 of the Minor Wave (5) and the 1D 50EMA. It would be reasonable to expect a bounce here. But I think this will just be to complete the B leg of the ABC correction. I will look to close out my short here but with the aim of shorting again at a bounce off 11,000.

To go long I am looking for a larger correction down to the 0.5 - 0.618 of the Primary i (10,400 - 10,200). This is the bottom of the Minor Wave (4) and, depending on the speed of correction, would have the long term diagonal trend as support.

Comment: The price action I am targeting would likely set up a H&S formation which would end just below my target buy area.

Trade closed: stop reached: Sold my trading pot. Details to follow shortly....