Don't feel right?
If one has some fundamental, ideological, astrological, or otherwise vested view that it's wrong to short you can always short Litecoin as a hedge. plays on Litecoin always have exaggerated moves. I'll repeat what I've said for years; my long term target on Litecoin is $0.00. I don't post about LTCUSD because few people care enough to read thus emphasizing my point.
The statistics I am referencing are just that; statistics. That means that for every fact that falls under 100% means there is the remainder within probabilities that the opposite will occur. Still, knowing the highest probability statistics combined with and risk management equals a robust trading plan. That being said; I'm going into the rest of the week with this research in mind.
I've been focusing on the large Pennant formation signalling a break-out between friday and sunday (as you've mentioned - bullish friday). the pennant indicates support around 635 and resistance around 675 - any tips in this regard would be appreciated, if you had a spare moment or two..
I have studied and are aware of price patterns but I do not use them. Here's why; they are subjective. When drawing them, do you use highs/lows, closing prices? What happens when it briefly breaks your drawn lines but comes back within; do you redraw them? What is the probability that a given pattern will behave a certain way; a probability that I could base a risk/reward strategy upon?
For me in trading I need to define my risk and know my expected success. That means I need to base my plan on things that I can quantitatively test. I feel like people that draw price patterns are more concerned with being "right" and "predicting the future" to have things to talk about than actually trading for consistent profits and managing risk.
The reason I use Ichimoku is because the levels the indicator creates are static, defined, and universal to price action across any instrument be they stocks, futures, or cryptocurrencies. Over time I've also learned the patterns within Ichimoku which are more clear and less open to interpretation.
I certainly agree with your views and reasons why people draw price patterns and the reliability of them. I've stuck with it as its helped me to predict when a breakout might occur - the direction of that movement hasnt been consistent and have since been looking at alternate ways to improve my risk management. I've looked into Ichimoku previously and have been using it mainly for tk crossover to predict momentum for entry/exit points. I'll do some more research to get a better understanding of its patterns and uses. Thank you again for your comments, they'll certainly assist me on my journey and trading strategy.
First, how do they help you put in a Limit Order to get out? They will never be able to give you a real number for the price to exit. You are stuck watching the chart for them to develop and then manually exiting a position with a market order. The best trading is done when you are away from the screen enjoying life with the confidence your plan is already in motion.
Second, the question itself opens more questions. What timeframe are you going to apply these indicators to make a decision? They will give you different readings on the Weekly, Daily, and swing trading timeframes. Then your decisions again become arbitrary. That is why i simplify my targets with the Ichimoku lines and pivot highs/lows.
My opinion on them is that they are useful tools with predictive potential but they do not help my trading style for the reasons I gave above. Most analysts throw as many indicators as they can on a chart in an attempt to devise a crystal ball; a confluence of indicator events that will give them that single 100% success lottery ticket win. I don't care about that. In fact, I'll take a plan that is 40% correct (more wrong than right) and make money as long as I make sure to profit multiples more than I lose each trade. Thus, I am most concerned with the right place to put my orders and targets so that I can accurately calculate risk and reward.
The next target past 672 would be the last high at 705, followed by the bottom of the small range at the top at 747. Those come into play only if the resistance is broken. Until then the forecast can change. Timing will also matter. I'll update my forecast and post it publicly as things develop.