A Bitcoin sell off does not always mean it is trending, it is all a matter of perspective. If you focus on one hour charts, you will see a trend, but what happens when price reaches a level that carries greater weight in terms of support? We regularly remind our followers that it is the probability of location that serves as the best guide.
We shared a long signal that triggered at 10,435 and let the market play out for 3 weeks until the trade eventually got stopped out at 9430. For those who do not realize yet, losing is part of this game. When I was a beginner, I hated losing and used to make the mistake of letting my performance determine the value of my self worth. Back then, a colleague of mine used to always remind me that in order to win, you have to be able and willing to lose. It took years for me to fully appreciate those wise words. If you can't lose, you can NEVER win. Losing provides opportunities to develop, improve and grow if your level of emotional intelligence brings them to light. Over time these opportunities will lead to experience that will contribute to developing a personal process.
We follow a process that allows us to make the best use of our time and attention while participating in broader movements when the market cooperates. In other words, once the criteria lines up, and we are triggered into a trade, it is up to the MARKET from there. We DO NOT react to noise, over think or second guess. As long as our risk is defined, it is up to the market to do the rest OR take our payment.
Many may be over reacting to the bearish movement from 10,300 to the 9300 area and assuming a trend. They will use trend following strategies, while over looking the fact that Bitcoin is still gyrating within a broad range (14K high to 9K low). Since price has not made any progress outside of this range, we continue to view it as a consolidation UNTIL it proves otherwise. Proof will have to come in the form of a break out, either below 9K or above 14K. We don't predict, we adjust and prepare.
Since we strongly consider the probability of location, current price is fluctuating around the 9500 region which is an area to look for bullish reversals. Although there is nothing at the moment, there is a greater chance one will appear. Can price break lower? ANYTHING CAN HAPPEN. We evaluate favorable probabilities, which also means there is a chance they do not play out. That is why we predetermine our risk with a stop (when enough criteria is met to justify a trade).
What if price breaks lower? The 9K area is the extreme support where a fake out can most likely occur. We trade the long side only, so this is an error that we automatically avoid, but many will get sucked in. IF price can clear 9K decisively, ONLY then will we consider the 8500 support level in play. For our investment strategy (SEPARATE from swing trades), the 9K to 8500 area is attractive when it comes to accumulating more inventory.
In summary, Bitcoin is fluctuating around the lower region of a broad range, it is NOT trending on the degree to which we place the most weight on. For our swing trade strategy, this means the probability of the location favors long setups. We make every effort to remove ourselves from the equation and let the MARKET determine when to enter and exit a trade. Reacting is what often leads to errors and losses compared to letting the market present and trigger a trade idea.
What are your rules? How do you define a market that is in a trend? Or in a range? How do you measure your risk and reward relative to the current price structure? If you can't answer these questions clearly and decisively, then you should not be risking real money. Most new traders and investors come to this arena focused on profit, and overlook the value of consistency. Risk is the only variable we can truly control which is why our process begins with a defensive mindset. This is why we can be right less than 50% of the time, yet still produce a positive return overall.
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This is the trade idea we shared on Friday and again on Sunday. The blue dashed line is the buy trigger and the green dashed lines are the targets. We remove ourselves from the trade as much as possible. The market determines the outcome, not our feelings, opinions or impulses.
The one thing that irritates the most when I read you is "we are not reacting".
Of course you are. When a trade is triggered, it's because you are reacting to the new condition that matches your setup.
mightytrader
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@RamzaBehoulve, Hahaha... He means reacting emotionally without a plan. Human language (unlike writing a computer program or algorithm) is not very precise... and people are not aware of this.
The majority of people do not communicate so precisely as you and I. If you demand such precision from everyone... trust me, it overwhelms most people and causes disconnect and further misunderstanding.
You are probably writing too much code. Perhaps, read some great works of literature and you will see how dynamic and non-literal human language actually is.
RamzaBehoulve
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@mightytrader, I have been reading him for years, I know why I said this and he knows why I say it. He also says he is not part of the herd when he is in fact part of it, just a smaller portion, but in the end, he is just as much part of the herd aas everybody else who cannot move the market by himself.
While Marc is a great analyst, he is also full of himself and regardless of the years passing, the warnings and other things, he still makes the same mistakes over and over and over again because he refuses to change his "system". He thinks because it's making some money over time, he doesn't feel like he needs to optimize it or make it better. His partners are much more down to earth in improving strategies.
mightytrader
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@RamzaBehoulve, OK. Fair enough. You made me realize something really important: I, myself, am part of THE HERD. The only reason traders were making lots of money in 2017 was because they were early before the *mainstream* HERD started to jump in. Well, all the mainstream Joes already lost all their money. So, who's left?
Retail traders.
I am telling you, these Whales keep barely stopping me out. And the timeframes keep shifting.
I don't want to play these games anymore... Because at the end of the day, trading is ZERO SUM game: You just take money from some other sucker.
I am a firm believer in The Greater Fool hypothesis.
And Bitcoin price action is changing constantly.
People don't realize that all their so-called "technical analysis" theory is mostly hocus-pocus mumble-jumbo. They act like the patterns and such are like the Newtonian laws of physics... So much that they believe in these "support" and "resistance" levels like gravity.
The thing is, is that Whales have highly sophisticated AI machine-learning algorithms computing all these possible classical TA patterns and just about everything that is preached about charting in pretty much all timeframes.
The Whales... they are the ones lending out the leverage to borrow. They make money from all the fees, interests and the price actions in all the timeframes. They know how much money they can make by invalidating a particular TA pattern in a particular timeframe because they are the ones lending the leverage and can easily read THE HERD's stop-losses and leverage levels of liquidation.
I'm not saying that TA is worthless.... But it is next to worthless in this market at this time unless you are going to compete with your own machine-learning algos. and computing.
However, the Whales have lots of computing power and have been collecting all sorts of data... not just price data... PLUS they know key fundamentals that will NEVER be released to the public before them.
This is a very dangerous market and I quit. However, I will still study my strategies. But I have no edge in this market. I will await for the small caps to pump... maybe it will be 2 years... But at least I can get on a reasonable timeframe and take some idiot's money because I will know more than he.
I have to compete with greater fools in order to $$$ CHA-CHING. But in BTCUSD, I realize that I am the greater fool, myself! I was part of THE HERD. But no more!!!
@casidom, I posted a long text on this thread right at the moment when you replied. I thought it was relevant to our discussion; therefore I tagged you so you an read my further thoughts. ;)
Of course you are. When a trade is triggered, it's because you are reacting to the new condition that matches your setup.