Once again, welcome to the Taiwan Bear talk show. If you are looking at my post, congratulations, you have just got yourself into a “Taiwan bear trap” LOL……(silence)
So, is BTC going down? No – it’s not going down. It’s just a retrace like I have been saying since the recent dip. Instead of giving you two directions which I would normally do, I told you that I think the dip is over (short-term). While many traders are still waiting for confirmations I have closed more than half of my positions with 21-33% profits. The price hit my short-term target and I took the profit, even if the price could still go up more. If you have followed me closely, I told you to close some ETC positions when the price hit $19.5. That was my target and I will wait for a rebuy around the price range $17-$18.3. Was I regret that the price went above $19.5? Certainly not. I just made 33% profits in less than 48 hours.
The way I trade is that I find the pattern & the trend in a larger time frame (weeks, months & even years). Then I identify & analyse possible Fibonacci reference points/levels, again, from a larger time frame (years) to a smaller time frame (days & hours). If more than 2x Fibonacci levels overlap each other, the likelihood of they being a strong support is high. This is the kind of level that I would place my buy position and set my SL below the next fib level. This way, allows me to have a risk/reward ratio of 2 to 5+, sometimes even 10+. If you have seen my previous post on EUR/USD pair, that was a trade with a risk/reward ratio of 10+. Hence, you won’t be panicked even if the trend reverse unexpectedly and you would still make nice profits even if the trend does reverse. I have now identified an overall pattern for the BTC from 1st Dec 17 all the way to 16th Apr 18. In order to identify this pattern, I have taken Fibonacci levels, long term trendline, the downtrend channel as well as the psychology of whales into account. Psychology of whales? You might think I am crazy……well, when BTC surged from $8400 to $9800, how many traders out there called the bear flag like I did, before the bear flag became apparent?
Right now, BTC is heading towards my target just the way I expected. I might not predict the bouncing between the fib retrace levels & timing correctly as it is certainly not easy. However, if you are not a day trader you should still benefit from my initial buy target and my ultimate sell target. But if you are a professional day trader, I would suggest you to also follow @PRO_Indicators.
- To be continued below -
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On the graph above you can see I set my ultimate target @ $10139. There are a couple of reasons for it:
1. The Fibonacci reference points that I setup seems to be valid. If you have seen my previous post on XRP, you would have seen how accurate I was when I predicted the bottom of XRP, while 99.9% of traders said that if XRP surpassed the low on 6th Feb the next target will be around $0.43.
2. There are currently two sets of fib retracements that could play out, one indicating a price target of $10139 and the other $9553 (which I didn’t show). If I took the phychological of whales into account, I would think that the price target is $10139. Why? If you look closely at the top of the downtrend channel (yellow), my target actually surpasses the top of the downtrend channel. And that is exactly what the whales want you to think, just like when BTC surpassed the top of the downtrend channel on the 27th of Feb. But did BTC really surpass the downtrend channel on the 27th of Feb and created another downtrend line? No!! If you have seen my previous posts on BTC, I have mentioned that linear scale works better in a shorter time frame while log scale works better in a larger time frame. If you look at the graph below, which is exactly the same graph as the one I posted above but in log scale. Can you see the difference? My target of $10139 is where the top of the downtrend line is going to intersect around the 26th – 27th of March. In addition, if you notice the mid-term trendline (red) on the log scale version, you can actually see that the low on the 18th Mar touched right on the trendline and bounced off nicely. This won’t be seen if you only see the graph in the linear scale.
So, what am I going to do next? I will see how BTC reacts @ $9553 and see the RSI & MACD level, as well as the volume at that point in time. If it surpasses $9553 without any hesitation, I would take my profits when BTC hits my ultimate target around $10139.
By saying all the above, there is still a small chance that BTC could reverse to below $7240. For me, I don’t really care because more than 75% of my buy positions are now closed with 21%+ profits. The rest I have re-adjusted the SL to $7624 – 3% below the 0.786 retrace.
Please note this is for education purposes. Good luck trading.
Taiwan Bear
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Dear followers,
According to the bouncing between fib levels yesterday, I think there might be a chance that the ultimate target is around $10395, instead of 10139.1. And if that is the case, the likelihood of BTC dropping down to $4436 is increased. I will show you why later on if BTC does get rejected from $10.395.
Yours is quite accurate. What’s more important than the benefit readers have made from your post is the thought process and principles behind your analysis.
Taiwan_Bear
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@Alloviacie, Such a nice thing to hear. And yes, I believe that is the proper strategy in trading, rather than just counting waves.
rkooner1
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@Taiwan_Bear, I just discovered you bro. I've been following a lot of elliot wave analysis freaks, read heaps of books about it too and it has disappointed me many times - I've seen it only makes sense in hindsight, after the movement has already happen and then you can try and count the waves (everyone counts them differently). I love your charts, your TA is great and I'm definitely going to be following you in the future. I really just want to learn man, I've been trying and I've had some good days and some bad days. I'm also in Sydney man! Good to see such a master technical analyst in Sydney :D Keep going!
Taiwan_Bear
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@rkooner1, Such a lovely comments, especially after an exhausting day at work, and the bloody Crypto markets for the past week.
Counting EW is the last thing you wanna do. It only works if you are really good at it. If you want to learn EW, go and check @PRO_Indicators. He talk about the possible EW scenarios and he tells you which one he thinks is the most plausible scenario. If you look at his recent post on BTC, he has already predicted the current drop to around the $7700-$7800 level.
A good TA should give you a direction after considering the most plausible scenario, rather than having 2x directions with equal possibilities. The most important thing is to set up a risk/reward ratio that works best for you. If you can find a trade with 5+ risk/reward ratio, then definitely don't hesitate to place your trade.
Awesome for there, it's more simple than many of the other popular people doing/making TAs. Seeing someone update their TA like every hour and changing/adding elliot waves just confuses me. I'm following you. Keep up the good work. I'm still learning and having a hard time, I let my emotions get in the way sometimes...do you have any recommendations as to what to read on TAs? Any books for that matter? TIA
Taiwan_Bear
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@rudyae86, We all get emotions get in the way, it's normal. And that's why I kept saying Risk/reward ratio is crucial. If you have a great risk/reward ratio, you won't be panicked if the price go unexpectedly.
The most efficient way is to read TA posts by MagicPoop, tntsunrise & FUNTRADER-Vera, PRO_Indicators & D27Cookie. What you have to do is try to find out how those people identify the pattern they identified. If you can identify a pattern that they also identified, then it means that you are getting there.
rudyae86
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@Taiwan_Bear, That is some solid advice there. I do have a great risk/reward ratio, I mean I lost 500 dollars when I sold for a loss so I can buy back in lower but lately, I have not been able to buy in at the right times. Sometimes I see it go low and don't buy in and then it goes up. lol. But I am find certain patterns that lead me to believe there will be a rise in price and a drop in price. I'm still learning and have only been in crypto for about 10 months.
Taiwan_Bear
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@rudyae86, no one, I mean, no one, is going to make profits from every trade. People does need to realize that. That's why I keep emphasizing the important of setting up your own ideal risk/reward ratio. You can make a loss from 9 of 10 trades but still making profits in the end. If people are not willing to take risks then they better invest in the stock market, for example, Amazon. One of the safest options.
So, yes, you have done a good job. Keep up the good work!
ogoz23
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can you do more alts? DGB, Theta etc .. your good and safe