BITCOIN - Invalidation and POTENTIAL reversal

Hello traders



I. Wisdom of the day

Not all traders are winners obviously. But not all losers have to be a stop-loss.
A lot of consecutive stop-loss and we're out of the "trading" game. What if there would be a way to stop... the stop-loss from getting hit?

There isn't a universal way but... using another indicator on top of a trading system is very powerful.
This allows to exit a potential big losing position with a minimal loss - or at breakeven in the best scenario.

That essentially means that .... traders have to accept that not all trades are winners... and accept to lose a few times to times.
Invalidating before a stop-loss is part of reducing one's risk and increasing one's opportunity.

Invalidations, also called hard exits, are an essential part of my personal trading method.

II. Why a 5-minutes chart?

The trading method won't give more than 3/5 trades per day even. This is not a scalping trading method, it's intraday and based on smoothed indicators for entering in a strong trend only.
Those are the most secure trades possible because:
- the engine waits for a strong confirmation and will avoid the fakeouts
- the 5 minute allows to enters early.
- entering early and getting invalidated early also. This point is crucial.
Entering early with a minimum of security is KEY

III Signals of the day


3.1 Invalidations in practice

We got invalidated twice with a small loss. Which is exactly why I love this invalidation system so much.
We exited losing positions at the beginning of the reversal or after a pullback
Without it, I would have lost way more pennies :)

3.2 Shorting the "future of money"

With a strong invalidation system, I get invalidated often before a "catastrophe" happens.
I never want to take them because I'm human and I have "too strong" beliefs ("BTC is the future of money") ... but that's exactly why I trade with a framework because....again I'm human with feelings/emotions (despite what my ex-GF said to me #too #personal #info)
The yesterday short was quite interesting as against the leading trend and below supports.

I often talk about a pullback in that scenario to reduce one's risk. But the pullback also allows to get invalidated with a better exit and a smaller loss.

Hopefully, you guys start connecting the dots now :)

3.3 What's next?

We're right on the Daily SMA 7 and the Weekly SMA 100 is 200 USD below.
I wouldn't re-enter before another signal (I'm dumb, I can only trade using a combo system deciding for me) - especially because a major weekly support is right under the candlesticks

All the best,
Dave

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