We just found two new important psychological levels in the last two days. One psychological resistance at 9450 and one psychological support at 8400.
-- quick reminder on these beautiful round number levels --
Computer scripts don't come up with these round numbers, humans do. You can see human trading behavior at work here, along with human psychology. This is exactly where humans would put their limit orders, or where they will put price alarms. Let's compare the different kind of lines you can draw. First, there are the most common ones based on past price behavior. A local high will be extend on the chart to indicate that this has been a point where price has historically bounced. This has medium predictive power. Secondly, there are psychological levels without any price action. Simply looking at a chart and seeing ETH is about to hit $150 should make you conscious about having psychological resistance. You can add these lines to your chart. Thirdly, there is confluence between psychological and price based support or resistance. Those are the ones I charted here for you. These have incredible predictive power. Keep an eye on them. They are important.
When we combine the 9450 and the 8400 levels with the price based resistance of slightly below the $9000 level, I see the price struggling a lot to break through the $9000. I expect it will show a healthy retracement and cool down a little moving in the direction of the psychological of $8400.
Then, the bears will make space again for the bulls, and we can expect a trade at least until the current . This can give us a nice 5% trade.
Remember, don't FOMO buy after you've seen these massive gains. Don't go for crazy returns. This 5% trade set-up is enough for me, and it should be enough for you.
Don't worry. You will get plenty more opportunities.
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- Trading Guru
This post does not provide financial advice. It is for educational purposes only!
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