Recap of the last days: how to trade and think...without FUD ;)

5 thg 2, 2018

Wild volatility in Bitcoin with strong trends, explosive pullbacks, ranges and fakes, we have seen it all in the last three days.
How to profit from all of this? Read the market and think about what can the market do to fool people!

I have marked and numbered entries (long and short). I will try to explain each of them briefly, if you have questions feel free to comment or PM me.

Long 1:
- Big volume and bullish engulfing candle
- Started after two big downmoves at the lower end of channel
- Agressive countertrend entry, but pullback to EMA and short squeeze to be expected

Short 1:
- Steep upmove broken
- Two pushes to a new high
- Nearly all shorts from the previous downtrend had their breakeven stops hit
- An imminent retest of the low is not to be expected after such a strong upmove, but a range should be established below

Long 2:
- Nearly everbody who got long at the start of the pullback (Long 1) had their breakeven stop being hit
- Two legs down from High (Short 1) completed
- Another leg up expected inside possible range or broad uptrend channel
- Several attempts to go lower failed (bullish candles)
- Possible short trap: Traders looking down, expecting new low or downtrend

Long 3:
- Short term uptrend
- Failed second entry short (which is just a failed second attempt to go lower)
- Target at the upper range, which is also the second big leg up

Short 2:
- Now we had a big move up (2. leg up completed), the break and a new high
- Additionally we are at the upper side of the range, range rules apply
- Possible bull trap: Traders might see a double bottom and a new strong uptrend
- Dont forget the low (Long 1) and a ossible retest or new low at this point!

Short 3:
- Small bull trap: after two small pushes up early shorts might be squeezed out again and longs pulled in
- Still thinking range or retest of the low
- Kind of aggressive short entry, but if it is a bull trap it is often hard to get in short later

Short 4:
- New steeper dontrend established
- Second entry short + two small legs back to the downtrend line (best entry in trends)
- Expected test of support levels below

Short 5:
- Prices failed to go higher at the downtrend line two times (second entry short)
- Second leg down expected (blue arrow)
- New low expected (target also from leg down)

Short 6 +7
- After the break of the strong downtrend a new low is to be expected
- Failed to go higher at the EMA
- Second entry short
- Possible downward pointing range


At the time of writing, prices have fallen below the supports and made two legs down.
A rebound can be expected here, but this is not a sign to go long. But a place to cover some shorts.
The new short term downtrend is still intact.