BITCOIN MAGIC FLOATING RECTANGLES
Trading at extreme sentiment and when we are overbought feels risky and can lead to withdrawing profits early.
It can be frustrating when you see other traders post on social media with magic floating targets in the sky without any description of how they got there.
When you're new to trading, it is really difficult to know which strategy or approach to use. "If I don't get in now, I might never get in at this price" (hint,.... you don't need to get in at this price. Sometimes it's better to keep your gunpowder dry ;-)
"Which is the best moving average?"
"Should I use harmonics?"
"Which candlestick patter is the best?"
There is no answer. It takes time to learn the context of what all of these things mean. It takes a lot of time to learn how to not FOMO in to a position. It's a really difficult emotion to overcome.
My best advice to new traders is the advice that I ignored, and that was to trade on a demo account to learn how it works, then trade small, then trade larger. My advice is to not ignore the advice because it's really sage advice.
My approach was to have a smallish trading account, and focus on the process, not to start making life changing sums of money straight off the bat.
When you are starting, you need to have a strategy just for staying in the game and not blowing up your account. Don't worry about the big win's, they will come later. And it's not magic. You just need to develop your own recipe and stick to it.
If someone else has a great recipe, then by all means, use it, but understand the context of when it will work and when it won't.
Setting up your targets, capping your risk per position, having stops that make sense, waiting for confirmation and having a rinse and repeat recipe that you use to give yourself a target is a real useful way to avoid doing that.
Plan for the scenario you expect most, but have contingencies in case you are wrong.
It's useful to know what other people's recipes are likely to be. So, I should imagine that most people are trading off the 2 current recipes;
1) We've got a bullish pennant at the moment. Statistically that will break up and the ascent you would expect to be equal in length to the flag pole. That doesn't mean it's going to happen. That would take us to the 27,000 ish area
2) Using a different recipe, instead, you can use Fibonacci extensions from the swing low of the rally we've had in the last few months (the big 10k-20k rally) and use the 1.618 extension. That gets us to about the 26,000 ish area.
So, now you have a nice range to draw a rectangle for a target, where you might expect to see a retracement. So long as you always know where you will get in if you are right, and where you will get out if you are wrong, you keep your position size affordable, you can start trading without fear.
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