BTCUSD: A Reversal Here Can Spark New Rally?

BITFINEX:BTCUSD   Bitcoin / Đô la
BTCUSD update: Higher low in progress just above the minor support area of 12483 to 12139 as bearish price momentum continues to maintain control. Now is the time to watch carefully for a swing trade long entry.

As I wrote about in my previous report, there is an infrequent broader reversal structure in play. The subsequent resistance level has been taken out (13520) and the next step is to evaluate the following retrace for a swing trade long entry. The market is following the scenario so far, and presenting the anticipated higher low. Now the question is: when to enter the swing trade long?

The answer is in how the current candle closes. If it closes on it's lows, then there is no reason to enter if you are waiting for momentum to be in your favor. Buying when momentum is going your way minimizes pain and randomness from the setup over time.

I am waiting for a break of the high of a pin bar or inside bar to occur which would be around 13300 at the moment. That would trigger a swing trade long with a stop around 12100 and a target of 16200 which is around 3:1 reward/risk. This swing trade would be separate from the position trade that I entered into the other day that has no stop or target (explain in that report). It would be especially notable if these candle stick formations appear within the 12483 to 12139 minor support zone which is the .618 area relevant to the recent bullish swing.

Waiting for the close of the candle helps to minimize premature entries which often lead to losses. At the moment, price can still continue lower and even retest the 11600 lows. IF that happens, I would be looking for reversals to add to my position trade as well. Prejudging a candle before it closes is a bad habit because you are assuming it is going to close in a way that may not happen (this is especially common on larger time frames). Patience pays especially in preventing potential losses.

In summary, not a whole lot has changed in terms of technical formations. The biggest lesson you can take away from a situation like this is that markets stabilize at tops and bottoms over time. It is a process, NOT an event. People who got sucked into buying this market too early, and too big are now at the mercy of the market. Not a good position to be in, but this behavior that payed off two weeks ago is the same behavior that is going to wipe out the inexperienced and impulsive eventually. In my opinion, it is better to miss out than to win and give it all back because when you lose, you lose more than capital, you lose confidence which is a magnitude of loss that cannot be measured in dollars. Slow and consistent requires knowledge and a strong self awareness. That is was trading is really all about, not charts, oscillators and news. Improve your success rate by first identifying and eliminating ineffective behaviors and becoming more aligned with your risk tolerance. It will help you separate yourself from the herd mentality.

Comments and questions welcome.

Marc Principato, CMT |Author: Analyze Any Financial Market Like The Pros Using Price Action| | Cofounder (S.C.)

Beautiful Analysis Marc :)
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Thanks for sharing!
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Marc - Thank you for your thorough thought process and analysis. I'm a newbie to TA and TV, I can see there is alot to learn. I'm like a sponge, soaking it all up. Thanks again
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"when you lose, you lose more than capital, you lose confidence which is a magnitude of loss that cannot be measured in dollars." Nice.
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hi .whats new? daily candle didnt touch 12483$ ! so maybe price fall again?
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Strong summary... there's a definitely a wise message in it.
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I just wanted to say thanks for your ongoing analysis and in particular your advice on trading with patience. Things like pointing out it's a process and not an event are true gems.
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Thanks MarcPMarkets for the good analysis
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Yes I'm waiting patiently for up or down trend. It's a nice feeling to use TA instead of guessing. What candle are you referring to ie 4 hr, 1 day etc and what time one etc. Thanks
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