ETHUSD How to deal with conflicting Charts
Updated
ETHUSD
How do we deal with conflicting stories?
Dollars and Senses likes to start his analysis on a Daily chart, what do we do when we have a conflicting picture.
On the one hand we are just testing the 827 (Orange Line) support level, and 38.2 fib retracement iof the last move. We could buy this now or wait for the bullish candle and buy.
On the other hand we have a clear Bearish Channel (overlaid) and are putting in Lower highs and Lower lows. So what to do?
The first thing I do is conform the trend in my head. We are going down and that means I cant buy on the Daily chart in the current position as I am too close to top of the channel. This may mean missing a winning trade, but overtime it will save me form a lot of pain. Its possible to try and Buy and come out at the top of the channel, but its to cute for me. I would buy this at the bottom of the channel with more space to ride it back to the top of the channel.
What I can do is go down the Time frames and see if I can find Higher Highs and Higher lows. The 4H Chart doesn’t help me, but on the H I can see price starting to consolidate. I can watch this and see if on the H price will put in a new high, and then pull back to the support, giving me a Higher low. The shorter bars on the Hourly, gives me tighter risk, and more times rewards vs that risk to the top of the channel. I would still come out or reduce substantially at the channel
How do we deal with conflicting stories?
Dollars and Senses likes to start his analysis on a Daily chart, what do we do when we have a conflicting picture.
On the one hand we are just testing the 827 (Orange Line) support level, and 38.2 fib retracement iof the last move. We could buy this now or wait for the bullish candle and buy.
On the other hand we have a clear Bearish Channel (overlaid) and are putting in Lower highs and Lower lows. So what to do?
The first thing I do is conform the trend in my head. We are going down and that means I cant buy on the Daily chart in the current position as I am too close to top of the channel. This may mean missing a winning trade, but overtime it will save me form a lot of pain. Its possible to try and Buy and come out at the top of the channel, but its to cute for me. I would buy this at the bottom of the channel with more space to ride it back to the top of the channel.
What I can do is go down the Time frames and see if I can find Higher Highs and Higher lows. The 4H Chart doesn’t help me, but on the H I can see price starting to consolidate. I can watch this and see if on the H price will put in a new high, and then pull back to the support, giving me a Higher low. The shorter bars on the Hourly, gives me tighter risk, and more times rewards vs that risk to the top of the channel. I would still come out or reduce substantially at the channel
Note
On the Hourly chart i did get a lovely decisive ENTRY BAR.(Its Circled) bouncing off the Support, and a tentative entry bar on the 20 EMA (also circled) but choose not to buy them. I am waiting for a pullback to a higher low, on a good level, then a bullish candle may get me https://in..https://www.tradingview.com/x/VJLvSOBx/
Note
ETHUSD is looking to bounce of previous lows (Blue Line) on the H chart. It will be interesting if we get a close, below the lows ( A lower low, which is Bearlish). Or of we get a close above the previous support level 827.18 (Orange line) which would be a Double bottom Horizontal level bounce which is quite bullish. Either way i will be sitting and watching for a while yet.
Note
We have a lovely example of a descending Chanel forming on the 60 minute charts. You can clearly see the lower highs (Marked in Red, with text) an the Lower Lows (Marked in Green with text) and now price looks highly likely to test the next support level around 780. Should you sell now, and buy back at a lower price? Its a decent trade and while BTC breaking support and heading down is likely to support the move the BTC picture is not clear and can effect every coin. It means more risk and potentially some bonus selling for better levels.
That one is an individual call for you to make
Note
Note
We have just posted a new Chart and Trade on ETHUSD
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