MrVolcano
Short

BTC ready for a big move down?

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
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The daily chart seems quite indecisive at the moment, but by zooming out the weekly things look much more bearish to from here.

Clearly looks like we are in a consolidation between Weekly 200 EMA as resistance and 200 MA as support.

Also we have some very heavy resistance around 4200. Weekly 21 MA is closing in on price, currently at 4182.

The blue trendline that previously acted as support is likely to be retested as resistance.

The Stoch RSI - one of my favourite indicators - is very overbought right now. Every time this has happened we've seen a 25%+ drop .

At the least, we'll get a retest of the lower 200 MA (currently at 3400) and if that breaks, then a measured objective of the previous impulse move will take us to test 2000.

There's no clear entry signal on this trade. At the moment I'm finding entry signals difficult to follow and finding anticipation of market flow a better strategy. Timing is incredibly difficult if a level breaks, a 10% move could happen in within a 15 minute period and I'm not in a position to watch the charts all day right now.

Short term there is a possibility of another spike up to 4100 so keep your leverage and SL wide. I'll be laddering in shorts at the following levels:

3780 (already open)
3898
4075

I've opened one at 3780 because I get FOMO otherwise. The number of times I've waited for a retrace only for the market to shoot off without me is ridiculous. This way at least I have some skin in the game.

Daily Chart

This trade went very wrong.

As BTC continued to gradually climb higher, I realised that I was in too deep. To close my BTC short position would have caused a huge realised loss. Ouch!

As time went on, I was starting to see that BTC could turn bullish and I would have been better to accept that I had overcommitted and closed at half-loss, instead I took a full loss.

I should have closed the position at that point. Instead I gambled.


Fortunately, I took a counter trade to hedge, thereby reducing the loss to about half, but could have easily turned this into a healthy profit.

Lessons learned today
- Trade with the trend!!
- Never Risk more than you can afford to lose on any one trade. $4k was 1/3 of the account.
- Do not enter trades too early - always wait for the trade to come to you
- Trade what you see - not what you think!! I saw that a bullish ascending triangle was forming and yet I continued to listen to internet "gurus". I should have closed it, protected my capital and gone long. I also knew that if it broke up, the move would be big because there was no resistance.
- Always protect your capital so you can fight another day
- Always think about what could go wrong on a trade and try to hedge against it
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