Bitcoin: Still Consolidating, Still Bullish. New Buy Signal?
Bitcoin continues to linger in the range. So much for overly dramatic and reactive bearish predictions. Hopefully by now you are beginning to realize that opinions, especially those that are based on emotional tendencies are not helpful to hold onto. In this video I will explain the TECHNICAL reasons why we continue to be bullish, and how we select a price when preparing to share a new swing trade idea.
If you review my analysis over a long period, you will notice I am usually bullish. Am I this way because I am trying to fulfill my ego and be "right" OR am I this way because the MARKET is providing EVIDENCE that says probability favors the long side? I evaluate probabilities through the use of price structure, price action and order flow. When these variables turn bearish, my view will also change (and since we have strict policy of not shorting Bitcoin, I will simply step aside.) I repeat this often: you do NOT need to trade both sides of a market in order to produce consistent returns.
As for the price action now, there is another bullish pin bar in place (yesterday's candle). Price continues to hold above the 9K area, BUT the inflection point in play is 8500. The pin bar is an adequate setup for a new swing trade long, BUT The environment is conflicting. Lingering near the middle to higher region of the range makes for less attractive reward/risk. For us this means we can still participate, but requires extra compensation for the elevated risk which we accomplish through smaller position sizing. The overall structure is clearly BULLISH because the 8500 and 7695 supports have not been compromised. Until this changes, these technical variables come together and FAVOR a bullish breakout, it is just a matter of time. So the question is do we just buy right now? NO. We use a buy stop and select a price level in ADVANCE that will justify a new swing trade long (plus a stop and targets). The price we choose is one that requires the market to work harder in order to activate the trade. For example, we recently sent out a trade idea with an order in the low 9600 area which never filled. This not only further removes us from the emotional aspects of putting on a trade, it also helps to avoid price noise and many would be stop outs. This is just one aspect of how we follow RULES to navigate the Bitcoin market on the swing trade time horizon. Without such an organized process, it is tough to produce consistent results.
If you review my analysis over a long period, you will notice I am usually bullish. Am I this way because I am trying to fulfill my ego and be "right" OR am I this way because the MARKET is providing EVIDENCE that says probability favors the long side? I evaluate probabilities through the use of price structure, price action and order flow. When these variables turn bearish, my view will also change (and since we have strict policy of not shorting Bitcoin, I will simply step aside.) I repeat this often: you do NOT need to trade both sides of a market in order to produce consistent returns.
As for the price action now, there is another bullish pin bar in place (yesterday's candle). Price continues to hold above the 9K area, BUT the inflection point in play is 8500. The pin bar is an adequate setup for a new swing trade long, BUT The environment is conflicting. Lingering near the middle to higher region of the range makes for less attractive reward/risk. For us this means we can still participate, but requires extra compensation for the elevated risk which we accomplish through smaller position sizing. The overall structure is clearly BULLISH because the 8500 and 7695 supports have not been compromised. Until this changes, these technical variables come together and FAVOR a bullish breakout, it is just a matter of time. So the question is do we just buy right now? NO. We use a buy stop and select a price level in ADVANCE that will justify a new swing trade long (plus a stop and targets). The price we choose is one that requires the market to work harder in order to activate the trade. For example, we recently sent out a trade idea with an order in the low 9600 area which never filled. This not only further removes us from the emotional aspects of putting on a trade, it also helps to avoid price noise and many would be stop outs. This is just one aspect of how we follow RULES to navigate the Bitcoin market on the swing trade time horizon. Without such an organized process, it is tough to produce consistent results.
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