I recently took a long swing trade on top of my longer term position at 8815 and got stopped out at the 8200 area. Why did I not hold it as part of my longer term inventory? The answer is I am looking to keep my risk under control. I still intend to get long again, especially around the current level, BUT confirmation must appear otherwise no trade.
I do not trade these markets on margin, so I cannot short. And like I have written previously, if I was able to short, I would like do it on a day trade time frame, especially within a major that price is fluctuating within at the moment.
The 8093 level is where price is hesitating and I am not surprised since it is the most recent reversal zone boundary based on the 8271 low. On top of that, 7776 is another reversal zone boundary that is relevant to the 8342 low which price seems to be reacting to as well. Any reversal patterns that unfold within this area, I will be looking to get into another swing trade long.
In summary, these are slow and increasingly indecisive markets. Price is having a hard time putting together a solid rally off of this major , but that does not mean it is going dramatically lower as many believe. Momentum is generally and a major change will not be valid until the longer term is compromised (way up at 9600). This is why managing inventory in conditions like this can be more effective than putting on swing trades. I have enough inventory and only looking to take on more risk (swing trades) if the signals appear. Managing inventory means averaging into a position that you are comfortable with if the market goes back to the lows. Remember you want to buy when a market looks it worst, and sell when it looks its best. If price pushes the 6K low, I will be looking for a failed low opportunity to buy as well.
Questions and comments welcome.
Thanks for all of your input, I really appreciate it. I have a request, could you take a look at the shorts chart for BTC/USD and give some explanation as to what is going on there relative to BTC/USD prices please? I'm no expert but the spikes in that chart are quite extreme and obviously very much relevant to the BTC price. As BTC is the barometer for the entire cryptocurrency market I often use your analysis in that respect and I really would appreciate your ideas on this particular aspect of the ecosystem as I believe this is one part of the market that is not covered in great detail.
New link: https://www.financemagnates.com/cryptocurrency/news/coinbase-will-add-erc20-token-support-coming-months/
Let's see if this does anything ...