We have a current top of the potential 3 wave at about 0.0013 BTC . There may be one more push to 0.00134, but I will not be entering on that trade. For wave 4, I will be targetting most likely the 0.5 fib level, and wait to see the reaction at the 0.618 fib level (if we get there).
states that wave 4 cannot retrace into the territory of wave 1, so I will set a relatively tight stop loss at about 93000 satoshis for 2 reasons:
1) Wave 4 cannot retrace into wave 1 territory
2) (More important) We have all heard of the "Golden Zone". This is the small pocket between the 0.618 and 0.65 fib level. This is usually a great spot to buy! There is always a huge reaction here from algorithms/trading bots. What these algorithms do is defend the 0.618 level incredibly hard. They will buy and buy and buy up that level. However, if their buying strength does not outweigh the sell strength and the price dips below the 0.65 level, these bots will sell.
So if we know these 2 rules, we can set a reasonably tight stop-loss around these levels - shooting for a wave 5 target of around 150-155k satoshis. This will give a risk to reward ratio of 4:1. Not bad odds! When we start to see what happens with wave 5 as it is developing, we can adjust the sell zone. I currently have 150-155k satoshis because there is hard resistance there, and it is a perfect 100% extension from wave 3 to the potential wave 4.
Look for reactions and confirmations of an uptrend! I have limit orders set at the 0.5 fib region incase it fills why I am away or asleep, but watch for reactions at the fib levels! Wave 4 may retrace to 0.382, and not even hit 0.5. That would be incredibly , but it is possible! It is certainly a drawback - I feel like long runs always happen when I am asleep - but that's just how the market works. Trading bots don't need to sleep :-( Okay good luck out there and happy trading!