MarcPMarkets

ETHUSD: Bulls Drive Price Into Resistance. Think Best Practices.

BITFINEX:ETHUSD   Ethereum / U.S. Dollar
ETHUSD             update: The consolidation breaks from the higher low off of the 1K area and is now in the middle of a resistance zone . If you are long from the lows, this is a time to lock in SOME profit, NOT initiate new positions.

At the moment, the major coin markets BTC             , LTC and this one are moving together, just not at the same rate. What you are seeing in this market is the type of price action I am anticipating in BTC             up to the 15 to 16K levels. This market has reached it's proportional resistance at the 1216 to 1304 area (.618 of recent bearish structure) which is an inflection point.

The support and resistance levels that I notate on my charts serve as reference points to anticipate a crowd reaction but exactly how that reaction will unfold is unknown. It is a matter of recognizing and evaluating patterns that develop in those predetermined areas.

At the moment price is pushing into a proportional resistance. This is an area where price is more likely to run out of steam momentarily and sell orders accumulate. This is why I always emphasize locking in SOME profit if you are long from lower levels. This is a best practice that reduces risk and still allows you to participate IF the market continues higher. IF you are driven by greed (typical herd mentality) and plan to sell nothing until this market reaches some fixed number "the top", you will under perform in the long run because you will be exposed to much higher risks.

Shorting this market is also a high risk behavior unless you have the flexibility and attention to act quickly in terms of both taking profits or exiting a loss. Expectations need to be in line with the bigger picture in order to capture a broader move, and weakness is clearly not the broader market bias in my opinion.

So if you were not positioned for this move at lower levels, where do you buy now? The 1074 level is a minor support (.382 of recent bullish swing) and serves as a reference point for new swing trade long positions. The key is to wait for 1. price to retrace to the level (may or may not happen), 2. wait for a reversal of some kind to appear (candle or chart pattern) and then 3. Evaluate risk and determine a reasonable target. If price never pulls back, then there is no trade, you move on and find something else.

Can price still fall apart? Yes, because anything can happen. Price may retest 1074 and fall right through for whatever reason. For me, any extreme move below 1K becomes a position trade buying opportunity because I recognize the broader intent of this market.

In summary, these markets are especially driven by emotions thanks to their novelty and large unprofessional population of participants. To capitalize on this, you must not let greed and fear govern your decision making. When a market reaches a resistance, even if it is slightly more likely to break through (like this market) you lock in profit if you have some, and hold onto some to see what happens. Otherwise you wait to see IF the market offers another opportunity at a projected level. Opinions and feelings will only lead to random performance which equates to nothing more than a gambling mentality. The first step you can take to minimize this natural thought framework is to learn to focus on risk, because real losses are what take you out of the game, not missing out on profits. Follow best practices and focus on always minimizing risk, and the profits will take care of themselves.

Questions and comments welcome.
Marc Principato, CMT |Author: Analyze Any Financial Market Like The Pros Using Price Action| http://www.Priceactiontraders.net | Cofounder http://www.seekingcryptos.com (S.C.)





Spot on again. I wish I would have followed your advise. As you note, greed over ruled sound advice. Could you update for the recent action? Much appreciation.
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Prescient once again! Nice work Marc.
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Thanks for the wonderful analysis...
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Hi Marc,
I enjoy your art of writing as well as its content. Can you enlighten us with analysis fro Neo. This coin alongside with ETH looks very promising...
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You are one of my top 4 traders to follow. Thanks for your contributions, Marc!
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"real losses are what take you out of the game, not missing out on profits"

As a rookie trader who began investing in btc 3 years ago, this is possibly the most important piece of advice, delivered succinctly. Thanks.
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Possible bearish harmonic in play? looks a little toppy.
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damn why you gotta be so good with words

"To capitalize on this, you must not let greed and fear govern your decision making. When a market reaches a resistance, even if it is slightly more likely to break through (like this market) you lock in profit if you have some, and hold onto some to see what happens. "
+4 Reply
Marc,

When you have time, can you please advise us on your opinion of the best source for learning how to properly plan structured trades, following best practices and minimizing risk? I've been trading for about 8 months learning as I go. I've been able to accumulate a lot to trade with and I really need to make sure I step up my knowledge, structure, and strategic decision making. As always, we appreciate your detailed expert postings!!!
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Thanks Marc. Excellent as always.
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