Bitcoin: Signal From Range Low = High Probablility Long Setup.
Bitcoin is NOW in a much more attractive location when we consider the reward/risk and probabilities based on our long only swing trade strategy. For those who insist we are in a bearish trend, make sure to check the structure on your larger time frames, because there is still nothing bearish about this market (trend is a subjective word that is relative to time frame). In this video I will further explain what we would like to see in order to enter into a new swing trade long.
Not much has changed since my previous video. Bitcoin is still range bound, and the entire area of the range is something we view as a broad higher low formation. Price has tested near the range low and established a price point at 8830. This stopped us out of a recent swing trade idea that we shared around the 9625 area. As most novice traders will consider a stop out a negative event, we actually look upon it very positively. Why? Stops SAVE money in the long run. What if Bitcoin went to 8K on some news? I can't tell you how many times a stop loss order has saved us tons of money. If you get frustrated by a stop, that is a sign that you have not been in this game very long. Another thing that makes the stop easier for us to manage is we only had 1% of our capital at risk. Often traders misunderstand sizing and take positions that are proportionally too large for their account, making a stop out much more painful financially AND emotionally.
Since the broader trend is BULLISH (defined by the 3800 low to 10,400 high), and price is now rejecting the range low area, this makes for a high probability setup. One reason is many shorts who are mislead by reactive information or small time frames, CHASE the market and sell into locations where there are many more buyers. They get caught, and become buyers as they get stopped out or margined out of their positions. This is the process behind the "fake out" and appears to be occurring now. IF the current candle can close in a bullish configuration, it will prompt us to share a new swing trade idea. A setup off of a range low, combined with the fact that the broader trend is bullish is the recipe for a high probability swing trade AND may even generate enough momentum to break beyond the high of the range as the next leg unfolds. If it doesn't break out, testing the high 9K area is proportionally reasonable which still translates into better reward/risk. Keep in mind, IF 8500 is taken out instead, price is likely to stay within the range for a longer period. Gold has recently behaved in a similar way, and we are going to address how managed our trades during the consolidation and fakes outs in today's webinar.
Not much has changed since my previous video. Bitcoin is still range bound, and the entire area of the range is something we view as a broad higher low formation. Price has tested near the range low and established a price point at 8830. This stopped us out of a recent swing trade idea that we shared around the 9625 area. As most novice traders will consider a stop out a negative event, we actually look upon it very positively. Why? Stops SAVE money in the long run. What if Bitcoin went to 8K on some news? I can't tell you how many times a stop loss order has saved us tons of money. If you get frustrated by a stop, that is a sign that you have not been in this game very long. Another thing that makes the stop easier for us to manage is we only had 1% of our capital at risk. Often traders misunderstand sizing and take positions that are proportionally too large for their account, making a stop out much more painful financially AND emotionally.
Since the broader trend is BULLISH (defined by the 3800 low to 10,400 high), and price is now rejecting the range low area, this makes for a high probability setup. One reason is many shorts who are mislead by reactive information or small time frames, CHASE the market and sell into locations where there are many more buyers. They get caught, and become buyers as they get stopped out or margined out of their positions. This is the process behind the "fake out" and appears to be occurring now. IF the current candle can close in a bullish configuration, it will prompt us to share a new swing trade idea. A setup off of a range low, combined with the fact that the broader trend is bullish is the recipe for a high probability swing trade AND may even generate enough momentum to break beyond the high of the range as the next leg unfolds. If it doesn't break out, testing the high 9K area is proportionally reasonable which still translates into better reward/risk. Keep in mind, IF 8500 is taken out instead, price is likely to stay within the range for a longer period. Gold has recently behaved in a similar way, and we are going to address how managed our trades during the consolidation and fakes outs in today's webinar.
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