Hello all, regular readers will not be too surprised with today's offering. I have been watching this potential 4 hour bullish BoT setup (BoT = my way of playing ab=cd harmonic price patterns....to learn more please refer to this guide: docs.google.com/presentation/d/1DY-LGVBMLx2yngfl92bgxndN9srJQF03xeGxrHFX2ng/edit?usp=sharing) for a few sessions now. I thought I would take some time today to comment on that setup and how it currently looks. Considering the rather well defined double bottom in price (seen on the left hand side of the chart) long ideas are not too hard of a pill to swallow. That double bottom confirmed a massive 8 hour bullish BoT formation (thick Fib study levels on chart) where both of those camps are currently long against the $615 area with stops just below key lows near $545. Considering too our belief in Optimal Trade Entry (OTE) windows, anticipation of a rally into the Daily short window ($700 to $900 area) isn't that bad of an idea either. The question then becomes, how does one actually trade this for profit where risk on all trades taken is less then potential reward. The BoT is my way of addressing this concern and has helped me immensely with both trade execution and management. Help with both of those has reduced personal trade anxiety which leads to better decision making and a generally happier life...which is always a good thing. As traders, we are literally paid to be uncomfortable. The less uncomfortable-ness I have in my job the better... Here then is how I shall be trying to play my anticipation of a move in price up into the higher time frame Optimal Trade Entry (short) window. While higher time frame players are currently long off the $615 level (as noted above) Lower time frame players will get confirmation of their 4 hour BoT long entry on a move through $628.76. Considering the significant peak in price at $629.60 I would consider a breach of this level a significant event anyway. Should that event occur, I shall be a buyer. I really like the fact that the bottom will have three key lows to work with. Stops should initially be on a breach of the recent key low at $603.70. Stops should be moved to break even on a touch of $653.81 and our ultimate target on the setup is $703.91.
That's all for this post. Trade well and god bless,
I assume that you are aware of the issue on Bitfinex with the over-extended state of their USD swap rates for leveraged BTC long positions? U know that from the 21st July, Bitfinex are going to start collecting interest payments on leveraged long positions which under the previous (current) system would not be collected until the position closed? On most occasions, I am one for rating Technical > Fundamental events. But are you not concerned that the potential for a cascade of forced leveraged long position liquidiations could turn the present technical set-ups on their heads?
Cheers.
CRInvestor
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hey there and thanks for the input. From your statement it seems there is a potential market pivot here. So the question then becomes does the event itself represent the end of a previous trend or the beginning point of a new one. I found it interesting how through the spring the perceived mass forced liquidation event that was to occur on the latest China BTC ban only served as marking 'the bottom' of that cycle. I wonder if this event too may represent such an event. Because of the tipple top on the lower time frame charts my feeling is a breach of that 629.60 level will have to represent a significant market structure change and in my opinion a battle I am willing (and very interested in getting involved with) to fight. I doubt the market will be able to recapture that significant level without some serious buyers stepping in. Should your fundamental event play out as bearishly as your propose, that level seems very unlikely to get taken out. So the battle lines are drawn in my opinion and this is a valid setup. It certainly doesn't mean the setup has to work, just that when these conditions present themselves historically, they often resolve as anticipated more than 66% of the time. Now here is the most important part of my response to you, so pay attention!. As a trader, I don't really care if this particular setup does resolve bullishly or bearishly - just as long as it does at least 66% of the time (See CRI's two rules of Investing for more on that!). I attach no personal self worth to this one trade and the only self worth I can attach to the trade is how well I follow my trading plan. This setup is in my plan so I must go......its just that simple
cheers
MoonTrader
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I like your response. We have to take the setups that appear to be in our favor, no matter what our personal bias may tell us. It's all conjecture until you recognize what your role in the market is as a trader.
I assume that you are aware of the issue on Bitfinex with the over-extended state of their USD swap rates for leveraged BTC long positions? U know that from the 21st July, Bitfinex are going to start collecting interest payments on leveraged long positions which under the previous (current) system would not be collected until the position closed? On most occasions, I am one for rating Technical > Fundamental events. But are you not concerned that the potential for a cascade of forced leveraged long position liquidiations could turn the present technical set-ups on their heads?
Cheers.