OK so Bitcoin has signaled a long here but this is simply not a trade I want to take. Why is it a long and why am I not taking it?
1) First we have position. Bitcoin has pulled back to the 50-55k area we were interested in taking a trade. So that is one reason I like it long.
2) We have a potential failed low scenario off a C leg. I like failed lows, it implies that buyers are still active in the area of interest. Inside candle confirms the potential for a failed low here, and this is a setup I do normally look for.
3) The pullback is between the 25-38% retrace level of the overall swing off 15k.
4) Several setups on the daily have also appeared.
So why am I not taking this trade, it seems to check all the boxes? Well quite simply the Reward Risk (R:R) does not align with my strategy. I like to get at least a 2:1 reward for my risk unless we are trading at extremes, and this is not an extreme.
Lets zoom in:
On the daily there was a nice setup back on July 4th weekend (5th of July) that was a decent setup but I like to have confirmation on the weekly and we did not have that yet.
So now that we have a trigger long on the weekly (inside candle off a low into the support zone) I am zooming in on the daily to look for a setup as well. What am I looking for here?
1) I would take a higher low setup out of the 58-62,500 area.
2) I would take a continuation setup if there was 4-5 days of consolidation here.
3) or if we continue higher will be looking for the same just at different levels.
So yes I like Bitcoin long here, but I remain patient.
What about a retrace back to retest the mid to low 50's? Sure this is a possibility, but the strength of this move off the low reduces the probabilities of that happening. Not that it can't happen, I am just not expecting it to happen, which is the reason I am looking for a long setup here.
If we do happen to retrace back into the mid to low 50's I will add to the position I added recently via BITO.
Good luck trading this week and I will be adding to my QQQ short in the near term.
1) First we have position. Bitcoin has pulled back to the 50-55k area we were interested in taking a trade. So that is one reason I like it long.
2) We have a potential failed low scenario off a C leg. I like failed lows, it implies that buyers are still active in the area of interest. Inside candle confirms the potential for a failed low here, and this is a setup I do normally look for.
3) The pullback is between the 25-38% retrace level of the overall swing off 15k.
4) Several setups on the daily have also appeared.
So why am I not taking this trade, it seems to check all the boxes? Well quite simply the Reward Risk (R:R) does not align with my strategy. I like to get at least a 2:1 reward for my risk unless we are trading at extremes, and this is not an extreme.
Lets zoom in:
On the daily there was a nice setup back on July 4th weekend (5th of July) that was a decent setup but I like to have confirmation on the weekly and we did not have that yet.
So now that we have a trigger long on the weekly (inside candle off a low into the support zone) I am zooming in on the daily to look for a setup as well. What am I looking for here?
1) I would take a higher low setup out of the 58-62,500 area.
2) I would take a continuation setup if there was 4-5 days of consolidation here.
3) or if we continue higher will be looking for the same just at different levels.
So yes I like Bitcoin long here, but I remain patient.
What about a retrace back to retest the mid to low 50's? Sure this is a possibility, but the strength of this move off the low reduces the probabilities of that happening. Not that it can't happen, I am just not expecting it to happen, which is the reason I am looking for a long setup here.
If we do happen to retrace back into the mid to low 50's I will add to the position I added recently via BITO.
Good luck trading this week and I will be adding to my QQQ short in the near term.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.