Where do I buy! When do I buy! The answers? Inside.
Patience is crucial in trading.
No one tells you this when you start out but - ignoring the urges brought about by greed/fear/uncertainty are SIGNIFICANTLY more important to your trading success than learning how to read a chart. Why do you think there are multi-billion dollar institutions that employ teams of people to look into "INSERT XXX COMMODITY" fundamentals without even concerning themselves with a technical chart? "Are you a fundamental trader or a chart technician?" is a common phrase for a reason.
Ultimately - getting the best entry price is nice but not necessary. What is necessary amongst both groups of individuals is a concern for risk, restraint in action and understanding of wider situations that contextualise and frame the trade taken.
So let's do this with our big bad baby Bitcoin!
TLDR: Probability heavily favours bullish price actions.
In my last few posts, I have broken down the steps that a technical analyst takes in order to contextualise the market (in this case Bitcoin) which allows them to act with restraint while also preparing for potential paths price may take.
In short, the conclusion of this is - we are in a large timeframe range where price oscillates between two price areas (60k/30k). This large timeframe range itself sits within a broader bullish trend (that started back in 2020). Bam. That's it, we have contextualised the market. This means statistical probability favours a BULLISH extraction from the range. The break of the all-time high in Oct/Nov also adds more weight to this bullish argument and the pending higher low of the 35k area (slightly higher than the previous range low of 28.5k-30k) again adds significantly more weight towards this bullish picture, ultimately allowing the professional trader who has sat and waited for months now to finally think about entering.
Don't get me wrong, there is still the CHANCE that we can retest and break the 35k support that we recently bounced off, but statistically, that is less likely than us heading on up from here. This is exactly why patience is crucial in trading. 53k, 48k, 41k AND 35k were all resistance zones and only one of them ended up acting as significant support on our way down from the Oct/Nov high. That means that if you had been inpatient and bought at 3/4 of these levels, you would be at a loss now.
This is why the professional trader WAITS for confirmation that support is holding (as seen over the past few weeks with the 35k area), then WAITS for an opportunity to enter, usually in the form of a pullback (incase you haven't caught on this is foreshadowing as to what I will conclude with). After all, why would you try to catch a falling knife when you can just let it bounce and ultimately come to rest on the floor? One course of action is pretty stupid, the other is literally just common sense.
The same works the other way around when the price is going bullish - after waiting all this time for support to be found (not catching the falling knife) how many retail traders saw the bounce of 35k (another bloody falling knife but going upwards) and got excited so jumped in at 41k-45k? Yes, they may have waited this whole time but they failed at the finish line because their time horizon is too short-sighted - Remember if you are serious about trading (which you should be - financial understanding is a crucial foundation for a successful life), this is not the only chance you will get to buy bitcoin and bitcoin is not the only asset you will buy in your whole life. In fact, had those inexperienced traders waited just a few days/weeks what might they be considering now?
This is because that very buying opportunity the professional trader has been waiting for all this time has finally shown up: we have confirmed support at 35k whose bounce broke crucial support turned resistance area (Noted on the chart as: "Point of Control") and now we are retesting this support zone. While the inexperienced trader may be sitting here worrying that the bounce didn't continue going and we aren't breaking all-time highs already, the professional trader is eagerly eyeing price action, with his figure on the buzzer.
So in summary:
1: We are in a wider bullish trend.
2: We have sat in a range since mid-2021 BUT this trend has had one confirmed bullish incident (break of the all-time high in oct/nov) and one pending bullish incident (higher low at 35k in the past few weeks)
3: This gives high weight that the 35k area is not just a local support but a range low AND with the strong bounce retaking the primary point of control for this range probability heavily shifts in favour in further bullish action and even a break of the all-time high.
4: We are retesting the point of control so risk (the amount you can lose) is easily measurable (with a stop loss below the 35k area OR 28k for long term inventory).
Conclusion: This is the pullback from the local / range low that offers significant probability of further bullish price action for not just a value for money entry but also an appropriate entry in regards to risk for both long term inventory and swing trades.
Control your biases.
M.
No one tells you this when you start out but - ignoring the urges brought about by greed/fear/uncertainty are SIGNIFICANTLY more important to your trading success than learning how to read a chart. Why do you think there are multi-billion dollar institutions that employ teams of people to look into "INSERT XXX COMMODITY" fundamentals without even concerning themselves with a technical chart? "Are you a fundamental trader or a chart technician?" is a common phrase for a reason.
Ultimately - getting the best entry price is nice but not necessary. What is necessary amongst both groups of individuals is a concern for risk, restraint in action and understanding of wider situations that contextualise and frame the trade taken.
So let's do this with our big bad baby Bitcoin!
TLDR: Probability heavily favours bullish price actions.
In my last few posts, I have broken down the steps that a technical analyst takes in order to contextualise the market (in this case Bitcoin) which allows them to act with restraint while also preparing for potential paths price may take.
In short, the conclusion of this is - we are in a large timeframe range where price oscillates between two price areas (60k/30k). This large timeframe range itself sits within a broader bullish trend (that started back in 2020). Bam. That's it, we have contextualised the market. This means statistical probability favours a BULLISH extraction from the range. The break of the all-time high in Oct/Nov also adds more weight to this bullish argument and the pending higher low of the 35k area (slightly higher than the previous range low of 28.5k-30k) again adds significantly more weight towards this bullish picture, ultimately allowing the professional trader who has sat and waited for months now to finally think about entering.
Don't get me wrong, there is still the CHANCE that we can retest and break the 35k support that we recently bounced off, but statistically, that is less likely than us heading on up from here. This is exactly why patience is crucial in trading. 53k, 48k, 41k AND 35k were all resistance zones and only one of them ended up acting as significant support on our way down from the Oct/Nov high. That means that if you had been inpatient and bought at 3/4 of these levels, you would be at a loss now.
This is why the professional trader WAITS for confirmation that support is holding (as seen over the past few weeks with the 35k area), then WAITS for an opportunity to enter, usually in the form of a pullback (incase you haven't caught on this is foreshadowing as to what I will conclude with). After all, why would you try to catch a falling knife when you can just let it bounce and ultimately come to rest on the floor? One course of action is pretty stupid, the other is literally just common sense.
The same works the other way around when the price is going bullish - after waiting all this time for support to be found (not catching the falling knife) how many retail traders saw the bounce of 35k (another bloody falling knife but going upwards) and got excited so jumped in at 41k-45k? Yes, they may have waited this whole time but they failed at the finish line because their time horizon is too short-sighted - Remember if you are serious about trading (which you should be - financial understanding is a crucial foundation for a successful life), this is not the only chance you will get to buy bitcoin and bitcoin is not the only asset you will buy in your whole life. In fact, had those inexperienced traders waited just a few days/weeks what might they be considering now?
This is because that very buying opportunity the professional trader has been waiting for all this time has finally shown up: we have confirmed support at 35k whose bounce broke crucial support turned resistance area (Noted on the chart as: "Point of Control") and now we are retesting this support zone. While the inexperienced trader may be sitting here worrying that the bounce didn't continue going and we aren't breaking all-time highs already, the professional trader is eagerly eyeing price action, with his figure on the buzzer.
So in summary:
1: We are in a wider bullish trend.
2: We have sat in a range since mid-2021 BUT this trend has had one confirmed bullish incident (break of the all-time high in oct/nov) and one pending bullish incident (higher low at 35k in the past few weeks)
3: This gives high weight that the 35k area is not just a local support but a range low AND with the strong bounce retaking the primary point of control for this range probability heavily shifts in favour in further bullish action and even a break of the all-time high.
4: We are retesting the point of control so risk (the amount you can lose) is easily measurable (with a stop loss below the 35k area OR 28k for long term inventory).
Conclusion: This is the pullback from the local / range low that offers significant probability of further bullish price action for not just a value for money entry but also an appropriate entry in regards to risk for both long term inventory and swing trades.
Control your biases.
M.