Bitcoin finally makes a move lower, and this was not to be un-expected. It was actually the higher probability move, but this is far from the end of a broader move higher. We remained neutral over the past week after our swing trade hit its second target and we are simply allowing the market to play out and provide a setup for going long.
Trading Article - For the Trolls that do not understand the difference between trading and investing, this is about swing trading. Not day trading, not scalping pennies in your mum's basement. I am Neutral in the short term, Bullish in the Long and Mid term.
Most of trading and investing is done waiting for setups. It is critical to be patient in any market, as impulsive decision making or acting early can often leave you holding the bag or actually losing it. We mentioned over the past week to be patient here, and again in our weekly review, where we were looking for Bitcoin and or Litecoin to print a lower leg before looking for setups. The selloff last week, took a continuation trade off the radar, and we went into wait and seek mode, where we simply wait for the market to play out, and seek setups for a bullish swing trade.
Yet patience has its disadvantages, and often you miss a quick reversal or sudden breakout. However over the long haul there is always another trade setup, and it keeps you from deteriorating your trading capital. All the crap we took last year, our trading capital was up, and it is up yet again this year as well. Many gambled last year and are now desperately trying to get back to break even. I won't forget the follower that could not understand why in a month we didn't take a trade. Well simply, it was not the environment and it probably kept you out of a lot of bad trades. No trade is still a trade!
To be clear there is no trade setup yet. The 3550 to 3650 provides the ideal area to look for a bullish reversal and setup to go long. Entering to early is not warranted as taking out the 3650 level puts the lower 3100-3300 in play. There needs to be a defined structure not a moving average, not a half winged bat, or dark cloud over Bart's head. We are looking for structure, yet Bitcoin's structure is not very clear, but there is a instrument that has a clear structure and that is Litecoin.
Litecoin:
Litecoin has a clearly defined structure and moving forward it will be our basis for the market in general. Whether we form a higher low here, or we move lower to the 42.25 level is simply guessing. All we have is a leg down and until we see a couple more candles there is nothing to do. Taking out the 42.25 area puts the low to mid 30's in play, however there is a broader support level and psychological level around 40.0. How the structure forms around these areas will provide direction in whether we take a trade or not. Trading off the RSI or other indicators can have you entering in early, and though it may work out sometimes, over the long haul it will lead to capital erosion.
In short we finally got a move in the market, yet the waiting is not over. We look for higher probability setups, and not fall prey to the impulsive nature to gamble. If you are patient a trade setup will eventually evolve, the key is will you have the capital to take advantage of it, or will you be trading from a hole, trying to get back to even? Don't get excited about this move as it still needs to play out and form some type of structure for which a swing trade setup is relevant. Our goal is first and foremost, capital protection, the result of this more often then not results in profits. Not the 100% profits weekly you get from chart prophets, but a steady increase in capital.
Trading Article - For the Trolls that do not understand the difference between trading and investing, this is about swing trading. Not day trading, not scalping pennies in your mum's basement. I am Neutral in the short term, Bullish in the Long and Mid term.
Most of trading and investing is done waiting for setups. It is critical to be patient in any market, as impulsive decision making or acting early can often leave you holding the bag or actually losing it. We mentioned over the past week to be patient here, and again in our weekly review, where we were looking for Bitcoin and or Litecoin to print a lower leg before looking for setups. The selloff last week, took a continuation trade off the radar, and we went into wait and seek mode, where we simply wait for the market to play out, and seek setups for a bullish swing trade.
Yet patience has its disadvantages, and often you miss a quick reversal or sudden breakout. However over the long haul there is always another trade setup, and it keeps you from deteriorating your trading capital. All the crap we took last year, our trading capital was up, and it is up yet again this year as well. Many gambled last year and are now desperately trying to get back to break even. I won't forget the follower that could not understand why in a month we didn't take a trade. Well simply, it was not the environment and it probably kept you out of a lot of bad trades. No trade is still a trade!
To be clear there is no trade setup yet. The 3550 to 3650 provides the ideal area to look for a bullish reversal and setup to go long. Entering to early is not warranted as taking out the 3650 level puts the lower 3100-3300 in play. There needs to be a defined structure not a moving average, not a half winged bat, or dark cloud over Bart's head. We are looking for structure, yet Bitcoin's structure is not very clear, but there is a instrument that has a clear structure and that is Litecoin.
Litecoin:
Litecoin has a clearly defined structure and moving forward it will be our basis for the market in general. Whether we form a higher low here, or we move lower to the 42.25 level is simply guessing. All we have is a leg down and until we see a couple more candles there is nothing to do. Taking out the 42.25 area puts the low to mid 30's in play, however there is a broader support level and psychological level around 40.0. How the structure forms around these areas will provide direction in whether we take a trade or not. Trading off the RSI or other indicators can have you entering in early, and though it may work out sometimes, over the long haul it will lead to capital erosion.
In short we finally got a move in the market, yet the waiting is not over. We look for higher probability setups, and not fall prey to the impulsive nature to gamble. If you are patient a trade setup will eventually evolve, the key is will you have the capital to take advantage of it, or will you be trading from a hole, trying to get back to even? Don't get excited about this move as it still needs to play out and form some type of structure for which a swing trade setup is relevant. Our goal is first and foremost, capital protection, the result of this more often then not results in profits. Not the 100% profits weekly you get from chart prophets, but a steady increase in capital.
