My beloved trading view analysts are happy to give recommendations to trade bottomed out alts with 100% profit targets. Check it out, it sounds amazing! I want to believe. But I don't see any convincing volume that can make me bullish yet in Bitcoin.
Nothing wrong with being wrong as long as you don't risk being wiped out your capital, so the safest bet is to play according to proven trading rules that are quantifiable and have a proper statistical risk / reward ratio.
To be honest I have no idea how reliable these harmonic patterns are. I just know I made a couple of good trades based on them and today I want to prevent myself from making bad trades in this choppy market. The question for me to explore is when to get long in case we drop.
The harmonic patterns sometimes have very static rules. In the aftermath you can get flexible because they more often than not miss by a couple of points, but when you plan a trade you should stay with the book. So right now exactly one harmonic trend reversal pattern can develop in the Bitcoin market and its a Deep Crab. The one static rule of the Deep Crab is that the CD leg is the 161% extension of the XA leg. This is good because it gives us actionable instructions of where to put a limit order into the market which is not solely based on guessing.
This is bad because I don't find much support from Fibonacci ratios. Between 4300 and 4800 USD we have a cluster of Fibonacci trend projections what indicates that many orders reside around that area in the anticipation of catching a falling knife once the price slips from that cliff at 5800 USD that we are dancing on now for around 7 months since early Februar. Take a looooong breath: This is how long you are already hoping for a reversal.
The most important Fibonacci ratio for me personally would be the 78% retracement of the complete bull run from the lows in the year 2015 to the top in December 2017 - marked by the day that the Bitcoin futures started on CME. The only other Fibonacci level that is sometimes used in the literature is the 88% retracement which would send us as low as 2500 USD.
I'm looking at the 78% ratio because it's very close to the limit order that a Deep Crab would advise us to take. The stop loss should be at the 200% extension and sits right within another Fibonacci cluster so we can adjust a bit down to 2800 USD if we want to make sure we don't get wiped out where other people might have massive buy orders to save us with a proper bounce. I personally just put another buy order there and forget about the stop loss, since I cannot imagine that we don't don't see any sign of life after such a massive capitulation candle.
Entering that order doesn't cost us anything but gives us a plan that we can stick to. We can always scratch it if the market proofs us wrong. But for now I prefer to sit this one out for a bit and get some work done. In the meantime all my friends that have lost a fortune in the last months are chasing 100% moves of funny internet money on Binance. Chasing pumped alts is a game for desperate traders that hope for a reversal. They feel secure because that 5800 USD support was tested over and over again what makes them confident to come back and take risky trades.
I hope the best for them.
I'm tempted as well but I'm trying to not make money by being a lucky believer. This can develop into a bad habbit that one day will destroy you as a trader.
Nothing wrong with being wrong as long as you don't risk being wiped out your capital, so the safest bet is to play according to proven trading rules that are quantifiable and have a proper statistical risk / reward ratio.
To be honest I have no idea how reliable these harmonic patterns are. I just know I made a couple of good trades based on them and today I want to prevent myself from making bad trades in this choppy market. The question for me to explore is when to get long in case we drop.
The harmonic patterns sometimes have very static rules. In the aftermath you can get flexible because they more often than not miss by a couple of points, but when you plan a trade you should stay with the book. So right now exactly one harmonic trend reversal pattern can develop in the Bitcoin market and its a Deep Crab. The one static rule of the Deep Crab is that the CD leg is the 161% extension of the XA leg. This is good because it gives us actionable instructions of where to put a limit order into the market which is not solely based on guessing.
This is bad because I don't find much support from Fibonacci ratios. Between 4300 and 4800 USD we have a cluster of Fibonacci trend projections what indicates that many orders reside around that area in the anticipation of catching a falling knife once the price slips from that cliff at 5800 USD that we are dancing on now for around 7 months since early Februar. Take a looooong breath: This is how long you are already hoping for a reversal.
The most important Fibonacci ratio for me personally would be the 78% retracement of the complete bull run from the lows in the year 2015 to the top in December 2017 - marked by the day that the Bitcoin futures started on CME. The only other Fibonacci level that is sometimes used in the literature is the 88% retracement which would send us as low as 2500 USD.
I'm looking at the 78% ratio because it's very close to the limit order that a Deep Crab would advise us to take. The stop loss should be at the 200% extension and sits right within another Fibonacci cluster so we can adjust a bit down to 2800 USD if we want to make sure we don't get wiped out where other people might have massive buy orders to save us with a proper bounce. I personally just put another buy order there and forget about the stop loss, since I cannot imagine that we don't don't see any sign of life after such a massive capitulation candle.
Entering that order doesn't cost us anything but gives us a plan that we can stick to. We can always scratch it if the market proofs us wrong. But for now I prefer to sit this one out for a bit and get some work done. In the meantime all my friends that have lost a fortune in the last months are chasing 100% moves of funny internet money on Binance. Chasing pumped alts is a game for desperate traders that hope for a reversal. They feel secure because that 5800 USD support was tested over and over again what makes them confident to come back and take risky trades.
I hope the best for them.
I'm tempted as well but I'm trying to not make money by being a lucky believer. This can develop into a bad habbit that one day will destroy you as a trader.