BTCUSD: Bullish Pin Bar Appears In Major Support Area.

BTCUSD update: Bullish pin bar forming off of the 6K psychological support area. This should not be very surprising since the probability in this area favors such activity. Now is the time to prepare for the next leg higher.

The first consideration is long potential. On S.C., we have been constantly writing about the opportunity at these lows for position trades. If you have the vision, capital and courage, these are great levels to add to inventory. I just published another article today about Litecoin.

The great thing about these levels are they now offer attractive reward/risk for shorter term trades. We are eyeing such a level for a swing trade long, but are waiting for confirmation.

If a trade triggers here, the target will most likely be in the low 6600's. Although a pin bar of this size implies greater strength, we will not have high expecations of a broader recovery until the trend line is taken out at 6750 for starters. From there, 7381 (.382 resistance relative to current bearish structure) is the next level that must be compromised in order to prove sustained strength.

The question is did any of the herd members who depend on oscillators and moving averages see this coming? Probably not since they are relying on tools that look backward.

We have been watching this area carefully for this type of price action because we anticipate. That is why you do not see any oscillators on my chart.

Consider the probability of what is ahead. Price is fluctuating around the 6K major psychological support. Along with that, two reversal zone boundaries: 5956 and 5669. As I wrote in my previous BTC report, this area is attractive for buyers, especially the strong hands or smart money.

Now that the market is beginning to confirm this scenario, we are waiting for a specific signal that is partially determined by the close of the current candle. If a trade idea goes into effect, the details will be available on S.C. only.

In summary, in my Litecoin article that I published today I wrote about being a contrarian. During times of extreme sentiment, like we have been seeing in these markets, the real opportunity is for those who can see beyond technical analysis.

A very common mistake most traders and investors make, especially less experienced ones, is they are looking for precision, exactness and safety. Real opportunity is messy, imprecise and is far from the obvious. This is especially true at extreme price locations like we are seeing.

In order to see ahead clearly, you must not depend on tools that look backward. Trend following indicators have their place, but if you do not understand their limitations, you will continue to be blind to the probabilities that are more in line with the natural tendencies of the market.