Bitcoin Buy Signal At Tough Location For Swing Trade Long.

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
Bitcoin has been in consolidating near the 11,600 to 12,300 resistance zone and today has taken out the high of yesterday's inside bar . Based on our swing trade rules, this is a new buy signal, BUT we choose NOT to participate. Why? Aren't all buy signals equal? They are not. Although the trend is CLEARLY bullish , the location is NOT ideal in terms of the probability of the location. Greed, desperation and a lack of discipline does not get in the way of our rules.

So who is this appropriate for? Smaller time frame aggressive traders who know when to get out if there is a lack of follow through. On THIS time frame, risk can be measured from the 11K level, which means buying now requires a move to the 12,500 area to be worthwhile. The 11,600 to 12,300 resistance has been tough although a break and follow through can happen, the probability still favors a fake out which is why WE choose to step aside (especially since we are NOT day trading this market).

A decisive close above 12,300 and this thing has some room to run. IF #Bitcoin fakes out instead, 11K can get taken out quickly and in this scenario we would be waiting for the 10,500 inflection point support for a new swing trade idea long. IF this thing runs from here, and we miss it, we lose NOTHING. Our primary objective is capital preservation.
The 11,600 to 12,300 continues to be a tough spot. IF Bitcoin does not close strongly above that 12,300 soon, there are likely to be a lot of longs caught in this thing, expecting the break out. Again this is okay for a nimble day trader, but is a low probability setup in terms of our swing trade strategy. IF price takes out 11K instead, we will be watching for the 10,500 support and evaluate price action from there. We chose to share an adjusted swing trade idea using a limit order to try and capitalize in this type of price noise and it has yet to be filled. If we are going to take any chances at such an unattractive level, we at least want a much better price than the range high. No fill? No problem.
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Nice work, as usual. May I ask what occurred that made you less certain about testing 14k, based on your previous idea? The recent dip?
+4 Reply
MarcPMarkets dudebruhwhoa
@dudebruhwhoa, thank you and good question. I don't like the location because it is a clearly defined resistance area that has proven to attract selling activity before. Our strategy looks to buy strong markets off of supports, not going into resistance areas. If price breaks out and tests the resistance as a new support, that would be a better scenario compared to what is going on right now.
+2 Reply
dudebruhwhoa MarcPMarkets
@MarcPMarkets, thank you for your thoughtful reply. Nice work again. Your information has been quite helpful to me during my learning process.
+1 Reply
Good job
+2 Reply
Yes,at the moment it is better to wait for a more profitable entry point
+2 Reply
Haha . Shoulda gone long. Oh well losers
+1 Reply
Kabani13 The_Mummy
@The_Mummy how is Your long xD
Great. Thanks for sharing!
Do check out my analysis
+1 Reply
Thanks Marc, nice work and i'm now following you! Just wanted to understand a little more when you say.... "the probability still favors a fake out". What are you looking at specifically? Volume? Thanks!
+1 Reply
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