MarcPMarkets

Bitcoin Trend Continuation Pattern Favors Bullish Breakout.

Long
BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
Bitcoin consolidation is here. Range low is 32,500, range high 40K. The pattern developing at the moment appears to be a symmetrical triangle which is often a trend continuation pattern. The broader trend is still bullish , so the likelihood of a bullish break out is still favorable over the coming week. What if Bitcoin chooses otherwise? I will address alternate scenarios.

Trade Management:

We shared a new swing trade long based on the inside bar break that took place on Thursday at 37,550. Since then the trade has been fluctuating between green and red. Break of Friday's low actually generated a new sell signal. So what do we do with this swing trade?

I mentioned to those who followed it that they have two choices: exit early and take a smaller than expected loss, or hold it for the max risk which is the predetermined stop loss order. For the record, we are staying in and will let it go to the stop.

While the stop will be more costly, it is usually better to let the market determine the outcome of the trade and not interfere. This is the random nature of the market at work, and second guessing is NOT an effective behavior. Our risk was identified and accepted at the time of the trade. If we were not willing to take that risk, then why put the trade on in the first place? The trend has not changed, so we let probabilities play out.

What IF The Trend Continuation Pattern Fails?

32,500 is the key support at the moment and is likely to be the consolidation low. If this level is cleared, the next key support is 27,500. Both of these supports are high probability reversal points for swing trades. It is up to the market to setup and confirm. In either case, if we see a setup develop at one of these levels, we will be prompted to enter into a new swing trade long.

Levels Are RANDOM.

I am often asked if price reaches a level if it is time to buy. The level alone is not enough. Keep in mind the strategy I am describing here is a SPECIFIC rules based swing trade strategy. It is short term oriented and not to be confused with longer term investing. You need to know the difference if you want to manage risk successfully.

Price needs to prove itself at a level before risk can be identified. Having rules like this in place help to minimize bad habits, ESPECIALLY the ones newer traders develop in wild bull markets like we have just seen. Once the market returns to reality, or goes into a consolidation, many will realize this game is not easy.

Rules may also lead to missing moves occasionally, but what is better? Being in every move and coming out red in the long run? Or being in less moves while coming out consistent and green? Day traders especially need to realize this.

Thank you for taking the time to consider my perspective. I hope you find it helpful.
Signals cryptocurrencies, forex, stocks, options, CFDs, 7 days FREE: https://bit.ly/marketsignals

Trade Of The Week Email: https://bit.ly/trades4free

Ebook: https://bit.ly/analyzetrades

Youtube: https://bit.ly/tradetube

Comments

Thanks for the great analysis.
100 coins
Reply
Marc, you and Goldbug have always been right on, and include the most valuable context I have seen from anyone on TV.

Thanks for sharing your insight!
+9 Reply
PABLEM0S brett0
@brett0 Who is Goldbug?
Reply
JW911T PABLEM0S
@PABLEM0S, his partner in crime :-) and a regular TV contributor (a must follow imho) - see greenbridgeinvesting.com
+1 Reply
I'm not sure, It feels more like a top, a symmetrical triangle could have also been made at the 2017 top. It looks the same, I'm a little more bearish because of the big rally we have had

+7 Reply
VincentBoudewijn VincentBoudewijn
+1 Reply
jwg335 VincentBoudewijn
@VincentBoudewijn you are comparing the 4 hour to the daily.
Reply
most bearish thing i have ever seen, 2018 all over
+5 Reply
Home Stock Screener Forex Screener Crypto Screener Economic Calendar About Chart Features Pricing Refer a friend House Rules Help Center Website & Broker Solutions Widgets Charting Solutions Lightweight Charting Library Blog & News Twitter
Profile Profile Settings Account and Billing Referred friends Coins My Support Tickets Help Center Private Messages Chat Sign Out