Bitcoin 8500 Inflection Point: Fake Now Or Break To 7Ks?

1 Mar 2020

#Bitcoin is about to trigger a new sell signal. Just because we operate a long only strategy does not mean we fail to observe bearish price action, or hold on to some limiting opinion or bias. It means we do nothing with the signal and instead WAIT until our criteria aligns for the next swing trade long position. In this video I briefly cover the levels and location where we believe there is a high probability for such a bullish reversal to materialize.

The following are key points that I make in the video so that you do not have to watch the whole thing.

1. In short term trading especially, you cannot hold onto opinions. We operate long only because it makes more sense for the risk tolerance allowed for this particular strategy. Our choice is not based on an opinion, it is based on the boundaries of our risk tolerance and realities of an unregulated market. Again, you do not have to trade both sides of a market to generate a positive return over time (see our track record).

2. IF price decisively clears the 8400 level, it can lead to a test of the next proportional support area (8K to 7350). This is relative to the .618 retrace of the most recent bullish impulse (6450 to 10,400). This does NOT mean it WILL test the zone, what it means is that the PROBABILITY of such an outcome in increased. Probabilities CHANGE relative to the unfolding price action. IF the 8500 area holds, (price action fake out) we are open to taking a swing trade long around current levels, but order flow MUST confirm the reversal first.

3. The 8K to 7350 zone is also an attractive location for both our swing trade strategy AND for long term inventory (position trade). IF price can establish a reversal pattern or structure within this area, we will be prompted to take a swing trade long also. In terms of inventory, we can add with or without a setup, but risk will have to be adjusted by the position size at the time of entry. Keep in mind, swing trades and position trades are completely SEPARATE strategies and must not be mixed together.

In the game of market timing, we face a highly random environment. There are no rules (except for regulatory and exchange rules) which do little to define how to play this game successfully. The ONLY control we have is the set of rules that we MUST create for ourselves. No rules means emotions, feelings and "common sense" will dominate your decision making process which the market will randomly reward (followed by overconfidence and an empty account). Rules not only protect capital, but also help to minimize randomness and assume risks that are quantified. We follow rules, and over time, that is what produces results. They don't have to be complex, but they must be present in order to operate with any consistency. One of our simplest rules? Wait for the candle to close before taking action.