A Gann arc is usually produced by starting with a key low or high and placing the first arc at the nearest key high or low respectively. But in the case of an asset like Bitcoin where extreme growth is still very much on the table, an interesting study is produced by drawing the first arc of Gann's Square from Bitstamp's all-time lows of $2.22 to 2013's rally top.
This produces the highest time frame view possible.
Like everything else in technical analysis, the higher time-frame a signal is the more relevant it is.
Watch to see how price behaves as it comes up against this current arc.
If 1) it it starts to fail, then expect a dump at least to 570 possibly down to 400-ish. Then when price finally breaks out of the arc start hunting longs.
If 2) price consolidates quickly at the arc boundary then breaks out, or simply ignores this arc and continues to rally, then consider this arc "skipped" and follow the strategy set out by my previous post (link below). Price will likely rally all the way to the next arc around 2000-ish area before correcting.(Zoom out and scroll up on this chart to see this area).
My personal opinion is scenario 1 is more likely. But as my dear friend and trading mentor, Brian from the therationalinvestor.co, says " Opinions are worthless. All you have is your set-up."
Follow a time-tested set-up.
Of course, as with all things Gann, squaring your chart is the key to this whole thing.
See link below on how to do it manually.
This produces the highest time frame view possible.
Like everything else in technical analysis, the higher time-frame a signal is the more relevant it is.
Watch to see how price behaves as it comes up against this current arc.
If 1) it it starts to fail, then expect a dump at least to 570 possibly down to 400-ish. Then when price finally breaks out of the arc start hunting longs.
If 2) price consolidates quickly at the arc boundary then breaks out, or simply ignores this arc and continues to rally, then consider this arc "skipped" and follow the strategy set out by my previous post (link below). Price will likely rally all the way to the next arc around 2000-ish area before correcting.(Zoom out and scroll up on this chart to see this area).
My personal opinion is scenario 1 is more likely. But as my dear friend and trading mentor, Brian from the therationalinvestor.co, says " Opinions are worthless. All you have is your set-up."
Follow a time-tested set-up.
Of course, as with all things Gann, squaring your chart is the key to this whole thing.
See link below on how to do it manually.
Comment:
Notice the massive doji, signaling indecision of the market up against this very important arc
Comment:
Price has broken through the arc only to put in an M-top. For price to escape the "gravity" of the arc this rally must continue quickly. As it is, scenario 1 seems about to be confirmed...Be weary of longs untill a bottom is put in outside this arc. Hunting short entries may be the most prudent trade...
Comment:
Scenario 2 it is. Shorts beware, pullbacks are buying opportunities.
Comment:
Multiple arcs can be skipped in one rally, wait for a confirmed M before shorting 2000$ and above.
Comment:
Price skipped the arc temporarily only to slam back down on it. As you can see gann arcs on their own dont seem to be good trading signals, although they can make great targets for other setups.
