cmcbtc
Long

BTC Long, Setting Targets with the H&S Pattern

BITMEX:XBT   Bitcoin / US Dollar Index
Potential Head and Shoulder Bottom pattern forming:

Pattern checklist:

Price Trend- down leading to pattern (+)
Shape- 3 valley pattern with middle valley below the others (+)
Symmetry- two shoulders should be near the same price (+, ->6300), same distance from head (-, not really, right shoulder about 7 days from head whereas left is bout 3 days)
Volume- should be highest on left shoulder, diminished on right shoulder (possibly, too early to tell)
Confirmation- when price breaks upward through neckline (6800)

Target- compute height from head low to neckline (1000) and multiply it by percentage meeting price target (74%) and add it to the breakout price (6800) = approx $7540

(all pattern info from thepatternsite.com)

R/R= 2.51
(risk/reward ratio)

fyi, because I'm not convinced about the symmetry or the R/R, I'm going to scale the entries on this one between the current shoulder at 6300 (.5 fib) and the .786 fib.

Comment: I'm still overall bearish, fyi. The spread between longs and shorts will add more fuel to the next move down. If this pattern plays out we may get a lot of late longs piling on then and we can finally get to our capitulation.
Trade active: .705 OTE was my heaviest buy and snagged perfectly.
Comment: pulled up stops. closed one long here to preserve some profit in case we re-test support. since risk is now zero on open positions and pattern is confirmed, will add to positions on next re-test of support.
Trade closed: target reached: no re-test of support, target reached.

looking bullish for the next few days/weeks, but this trade has concluded.

Comments

Look at transactional value and volume. We need more Volume to get there and its not going to happen. 5800 Range is where we are headed by evening or morning. A false breakout possible but unlikely even to get that.
Reply
cmcbtc Invictusexchange
@Invictusexchange, look at transactional value and volume? Are we looking at retail sales or trading BTC?

I'm assuming you mean regular volume, hence the section that says VOLUME, which for this pattern to become valid should be DECREASING through the right shoulder.

If you have something to contribute, I'd love to hear it but please bring data to make a counterpoint rather than conjecture (and read the post). Simple disagreement but no relevant data points for your argument? -> move on and place your trade as you wish.
Reply
@cmcbtc, I use a formula we dont share to public as it took years to build. We are 87% accurate.
Reply
cmcbtc Invictusexchange
@Invictusexchange, 87% accuracy would be incredible. I'd love to see more info
Reply
cmcbtc Invictusexchange
@Invictusexchange we never dipped past the OTE at 6085. Maybe you've learned your lesson about speaking in certainties regarding price action.
Reply
cmcbtc Invictusexchange
@Invictusexchange, this trade was a masterclass lesson. Hope you took notes.
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