If we look at the bearish impulse wave that began back on May 5th, there are a few counts that can bring us to this point...this is one of them. Depending on what side of the fence they were on, people believed we had either finished wave 5 or were still working on finding the close. Statically, wave 5 usually closes between .618 and 1.00 of the length of waves 0-3 stacked onto the close of wave 4. If you take the length of 0-3 on this count and stack it onto the close of wave 4, it brings you exactly to where BTC stopped today. It also could give us an "E" on what appears to be an large horizontal triangle. This suggests that we could be at the cusp of a pretty big opportunity.
That being said, on rare occasion wave 5 pulls off a 1.618 extension of the length of waves 0-3. If BTC decides that a further ext is going to be the move to make, that would put us at $5,400. If BTC extends beyond that, we have a bigger issue at hand that may end with me going back to options. I am not trying "catch the bottom" as a day trader. That is a dangerous game that I do not play. I do use a smaller portion of my over-all portfolio for longer-term swing trades and I did stack my first 20% (of my swing trade portfolio) at $6,650 given that it was a target for me.
Be careful with letting the hopes/fears of others cause you to buy into a story that you will hold on to come hell or high water. When we start seeing big candles, there is a human trait that wants to prescribe to an extreme (sell its going to $0 or go all in this is going to 20k). The charts that get the most likes are the ones that give absolutes...you know, the ones that say exactly what will happen and make it sound like getting on or off the train will result it riches or catastrophe. Remember, you can make just as much money if this bounces between 6k and 10k for the next year as you would if it went to 20k during the same time period. The only thing that no stop/losses and FOMO consistently create is another sad story. Trade smart.
Thanks again for your writing. Do you make more money off of your swing trades or day trades?
MDuth
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@CryptoTANewb, Even when adjusted for portfolio size and trade volume, my day trades produce a far greater amount of income than my swing trades. My style is waiting for structural confirmations, risk/reward analysis and stop/loss and target adherence based on that analysis. If you have a large volume move up and a perfect .50% retracement of that move, followed by a close of that retracement, it is most likely going into a wave 3 or a "C" of an ABC correction. I cash out at the close of 3 or "C". If it drops like a rock I know it was a "C" and I got out on top. If it retraces 3 and closes a wave 4 I can always play wave 5 and it will most likely be lower than where I cashed out at the top of 3. If I wanted to desperately hope it was going to be a big 5 wave impulse, my emotions would get in the way of cashing out at the top of 3 and I would have my gains eliminated if it turned out to simply be a short-term ABC correction. As boring as it sounds, I trade emotionless. The occasional smile when things work out really well, but for the most part whether it hits my profit target or hits my stop/loss my reaction is the same...look for the next confirmed structure.
CryptoTANewb
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@MDuth, you sound like a boring person to trade next to
MDuth
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@CryptoTANewb, Haha, if you are looking for the energy found at a blackjack while everyone is waiting for the dealer to bust than I am not your guy. As an aside, there is a reason that the "house" has rules in blackjack. It's because the house understands the statistical odds of the game, so they force their dealers to play on a rules-based system. Do they lose some hands? Of course. But playing statistically against a bunch of drunken dreamers works out in the long run. The dreamers emotional game-play is what funds the house. So in this game, you get decide which of those two players, the drunken dreamer or the house, you want to be.
MDuth
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@CryptoTANewb, If you decide on the drunken dreamer approach, take your money out of crypto and go to Vegas. At least there the drinks are free ;)