ETH/USD - Setting up for a long

BITFINEX:ETHUSD   Ethereum / U.S. Dollar
Comment: Ethereum has a more clear potential bottom set up than Bitcoin. If thats the case, alts may start to rally before Bitcoin does.

Market sentiment on Finex is at Equilibrium. Not many people want to short at those levels so longs are slowly stacking up.

Comment: Moment of truth, pay attention to the orderbook.
Trade active: Should be missing once last minor move down according to the count above.

Got partially filled so lets set this active.
Comment: Seems better than Bitcoin. This massive 3rd wave should be coming into an end at those levels and since its too big the fifth has more chances to truncate. If you were long its a nice opportunity to take some profits up here.
Comment: Original plan was to close the trade somewhere up here since it has 5 waves up and got partially filled. But! It was a strong breakout and momentum is parabolic. It stopped exactly at 1:1 of the triangle break out, so triangle traders that scalped this will take profit here. It might even test 500$ but keep an eye on those levels since:
1) Till now there is a bearish DIV on 150m
2) Alts are about to complete 5 waves up
3) Bitcoin found resistance on the 0.786 retracement
Trade closed manually: Closed the trade with the break of 472. Something worrying is that it still got rejected on this down trend channel upper resistance.
Comment: On the 15H time frame it has both cloud and trend resistance along with the short term bull cycle possibly coming to an end.
Comment: Trying to find a count on smaller time frames, looks like a flat correction so far.
Comment: It seems like the B wave is in, a little lower than expected since it retraced more.

It could be done correcting, like Bitcoin, but the retracements are very shallow so its less likely.

Comment: This is the only bullish count i can find. Its hard to miss the very obvious algo activity that makes this structure hard to label. The targets are right to the tick. You can see the next target in case this pivot doesn't hold.

Comment: As long as the structure favors it this is a must buy in my books. You dont have to buy it, obviously, but watch the reaction around this area, next attempt is way lower at ~416.
Comment: It can have a wick that will make a new low (in case its not an internal retracement) so adjust the entry accordingly if you want to play this.
Comment: Didnt want to push an update since this was getting risky, hopefully this is the low for now.
Comment: There are chances for a pullback here, RSI resistance on 15h, it either slams trough with volume or retraces lower. I cant fit a count quite yet but low 430s is a nice area to join (with the current data). There is a chance that this is only the 3rd wave of the (expanding?) diagonal fifth so it might retrace lower. If thats the case you can use retracements of the current bounce as an extra fib to find the last wave.
Comment: Im not quite sure if the bounce is impulsive or not. Most likely its corrective?
I will just leave the expanding diagonal scenario here in case it plays out, take profits if you were long from a good entry.

Comment: Posted a comment below, not 100% related to the idea but you might wanna check it out along with the mini rant.
Comment: Signals for pullback/consolidation on this area. My indicators show that this is a 3rd wave.

Comment: Working as intended! lol
Keep an eye on the shorts, they are below support, they should start pilling up here before a last leg down, so there is more upside, ideally. Will try to fit a count but its hard because of the orthodox low. Its either the 3rd ending somewhere here, or an extension on the fifth.
Comment: Im still not sure whats the correct count is here but there should be some pause on the highlighted areas, they were also tops on the previous uptrend.
Comment: Oscillators point to an extension on the 3rd(missing its 5th subwave).
Comment: Assuming that BTC has one more leg up, this should be it. BTC pair has support at 0.07.
Trade closed: target reached: Landed on the box. Thanks for playing.


I will post this here since its not really related to the idea directly.

I was asked yesterday what i use to spot a top or bottom. Truth is i use a bunch of staff but primarily Fibs and EW. Fibs are powerful, you can swing trade based on fibs and horizontal support/resistances zones alone. Adding EW to fibs helps you on drawing the correct ones and finding correlations between them. A zone where there are too many fibs based on EW rules is a very strong support/resistance zone that you should respect. Horizontals wont always find those and if you think they do find them, then you might wanna check the lines you have drawn, cause they are over 4, which means too many, and the "zone" is not a zone anymore but a 500+ area on 6k asset.

But, no matter how good you are with EW and spotting the structure, there is always the chance for a low probability scenario happening. Not to mention there is ALWAYS the subjectivity of the trader. You can have 100+ years of EW trading, 500 titles of "EW certified", it means nothing to me, you can have the same results with even less experience. Experience is just a matter of time and progress is not linear meaning that the more time you spend doesn't mean that you ALWAYS get more experience. Yes, that is true in the beginning when you know almost nothing but diminishing returns kick in later on when there is even less things to learn on a theory that DOESN'T EVOLVE.

Anyway, this almost got off topic, my point is that there is always the probability of the main scenario not playing out or having structures (like the current ones on Bitcoin and Ethereum) where the structure is uncertain or has many alternative scenarios. As an EW trader you DON'T want to trade those. But as a trader that spots a nice long/short opportunity you either use more simple or more advanced method to enter a trade. Personally i don't like simple methods because they don't work for me, the more advanced it is the more comfortable I'm for the trade. And since we are closer to 2050 than 1970 i have been working and i will keep working on new indicators or using the BEST out of the old ones and improve them.

Yeah, yeah i know... indicators dont work and price action + volume is key and blah blah dont burst my bubble sir. Thats very funny actually because the majority of trades are being handled by algorithms. What are the chances of those bots "reading price action" ? None.

Below there are some additions to the classic RSI that make it more predictive than a relative strength oscillator, and as you can see it works like a charm on ETHUSD pair on the 15H time frame. Now you may ask why 15H and not 12H. The differences are minimal but the settings are adjusted for "non-popular" time frames. Its not perfect and still a work in progress and one of the tools i use the most to anticipate the next move or call a top/bottom.

+1 Reply
looks like another triangle grrrrr!