Trade Buy 7880 : Target 8454 : Stop 7620 R:R 2.2
This is a higher risk trade using half the position sold at 10850. Evaluate your risk tolerance and positioning before taking this trade as this is a continuation trade. This is a summary of the more detailed trade I posted earlier this morning.
After expecting a Reversal with what looked like the perfect reversal signal we ended up with the makings for a Perfect Storm with nothing but negative news releases every day from the typical Boom Doom and Gloom reporters.
Looking at the chart from a broader term perspective I went back to our original wave count. I also looked at several extensions and retraces from various waves and fractals of, for levels of interest as well as levels where there were possible trap setups. On the 13th of March we added the 8860 level which I mentioned was a key and once it broke a selloff followed which I explained.
Zooming in on the I like the 7627-7668 level, where in this short range three levels converge, the of the , the 0.618 extension of the previous leg, and the 0.618 overall correction from 2015. Could this be the perfect storm for a Bear Trap? I also like the fact it is likely under the majority of traders radar as they are focused on 6000 and lower right now and continue to pile into the short trade. Not that we can not go lower, but with short interest being at an all time high this is likely shorts late to the game and those are the fish I’m after.
I sold my 9743 trade at 10850 and I am buying 1/2 of it back here at 7880 with a tight stop loss of 7620 and a 8454 initial target level R:R 2.2. If we get a signal for a reverse I will add the other half. This is purely a positional trade for the longer term and though I have a target level, I will not necessarily sell there.
Do we rebound here or move lower is the question all of us have. The formation of a pinbar and continuation move would be a welcomed relief to bulls and could start a short squeeze. A close below 1490 and continuation lower I may shave off some and look to the next area of 5800-6600 as we likely test the February lows.
There is no crystal ball here I am simply being patient and seeing what the market does. We have had two positive trades in BTC recently and we are looking for another one but as we have stated sometimes the best trade is no trade. I am waiting to see how the bars form before jumping in or maybe shaving some off to pick up lower.