monkia
Short

BTCUSD - Y leg needs to be completed at 8.2k?

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
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Trading corrections is always challenging because of the complexity of structures that are available for the analyst to select from. There's probably two broad views at the moment in terms of EW theory.

1) We have completed wave 3 up to 11.8k and are now the corrective wave 4. This invalidates if the wave 1 high of 9053 is breached.
2) We have completed the 5 waves and are now in a corrective structure which becomes more and more complex as the days go by.

The chart shows scenario (2) and my conviction is that we are in this structure and that we are completing a contracting triangle as part of the recent (b) leg to move into the (c) leg of the broader WXY structure.

Under this scenario there are three facets that lead me to think we will bounce at 8.2k and complete this Y (c) leg.

- 0.618 of the recent bull from 6k
- 1.618 extension from the W leg of this recent consolidation pattern
- Areas of support on the bear wave down and the recent 5 wave bull up

My plan
I have just sold off some of the coins I have purchased at 8.5k. The target for this is 8.2k and the stop will be very tight at 9860. Exceeding 9860 invalidates the current structure. The risk reward is high at a 10:1 ratio. However the probability of activating my stop loss is also high. This is a high risk, high reward trade. This fits MY trading plan and my overall short term conviction.

Sold at 9686
Target 8200
Stop loss 9860
R: 10
Probability: Los
Sizing: Small
Trade closed: stop reached: Structure invalidated, trade closed.
Comment: Updated wave count. A lacklustre Y leg which will give much encouragement to the bulls. Next steps are either:

a) Into another X and then down, creating a triple zig zag
or
b) Into the next 5 wave impulse up

Danm what happend here?
I did not trade do to work, but WTF did happend to BTC
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monkia TristanDanmark
@TristanDanmark, the bulls liked the inverse H&S, break of the bear flag and triple bottom.
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I still believe in short even by this huge pump
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monkia k0tkin
@k0tkin, yes could well be. Stop loss would probably now be 10.5k for the same target giving 4:1 ratio which is pretty good. However, I can not understand the structure at the moment so it doesn't fit my trading plan.
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Ok, now I see why:

the point you have for (a) -> I would put (0). because the first time it touched 9.4k didn't count.
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monkia DrJLT
@DrJLT, 10.5k -> 9.4k is the (a) leg (shown in brown). It then becomes the (0) for the ABCDE (grey) of the broader (b) (brown).
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