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[Reading notes] : chapter 13 how & when to sell shortHello, everyone This is a threads of my reading notes for the great book: [ Technical analysis using multiple timeframes ] And here is the notes of chapter 13, how & when to sell short I will go through all of key points of this book, and find proof from the bitcoin chart. Why to selling short? from the book : bear markets occur every 39 months on average and typically last for about 18 months. that is a lot of time where the odds are stacked against long trades and where selling short makes sense to generate market profits for the purpose of current income. And let's have a look at the bitcoin market for the bear market times: 02.Dec 2013 ~ 24.Aug 2015 last 21 months. 18.Dec 2017 ~ 28.Jan 2019 last 14 months. In the long time of bear market, shorting is a good tools to catch great profit. Measures of sell short By selling short, the trader expects to profit by repurchasing the shares at a lower level and profiting from the difference. And cutting losses must be taken very seriously when selling short since the unlimited losses. Shorting takes the right mindset Selling short is a skill that every serious trader learns to utilize during stage 4 market declines. The best time for sell short is during a bear market, but there are always stocks in a stage 4 decline that can be sold short regardless of the overall market environment. What is a bear market? The most obvious sign of market bearishness is when the majority of stocks are in established downtrends or when the overall market indices are below key moving averages. the best way to define a bear market is an environment in which markets where the 200-day MA is declining. Let's look at the chart pattern of bitcoin in bear market 2014 and 2018 with 200 day MA. From the chart above, we can see in the bull run, bitcoin will not touch the 200 day MA, if bitcoin drop below the 200day MA, then it's high possibility we enter the bear market, and 200 day MA will become a major resistance line of bitcoin. But is it the best indicator of bear market? how can we measure we are near the peak of ATH? find the bear market indication in in early stage is very profitable and very risky also another clue is the price of stock/bitcoin drop below the long term support line. such as in 2017 bull run, the 20 week MA is the most important support line for bitcoin, but it drops below the 20 week MA on 29.Jan 2018. This may indicate the bear market is coming! And I found another indication is the bitcoin is not correction in healthy range (20 week MA) and resume to advance again, this means the final ATH will be very soon. Sentiment of bear market In the bull market, everyone is very confident, but in bear market, stock tend to drop much quicker than they advance and it has a great deal to do with emotion. bear market are characterized by a stronger emotion response than bull markets because people are complacent when they are winning and become frightened when they are losing. fear is a much stronger motivator than complacency, and emotional liquidation from frustrated long holders can lead to quick declines. Choosing shorts Timing need to be more accurate when it comes to shorts, in bear environment, try to concentrate only on the highest probability setups, and keep overall trading activity low relative to your trading volume in a bull market. you need to have the patience to let the market present you with the lowest-risk opportunities. This occurs when the trend are aligned on multiple timeframes . Some of sharpest rallies experienced by stocks occur during a downtrends, and while these rallies usually fail to hold up in a down trending stock. Trend trading is the safer way to consistent profitability, so do not allow yourself to be enticed by the rapid movement. Short alignment Trend alignment of short trading positions is the lowest-risk, highest-profit potential trade scenario. Whether we trade long or short, the basic cyclical structure of the market never changes. Find the candidate with daily timeframe The first step in trading short is to find a stock in an established stage 4 downtrend. when trading from the short side, we ideally want the overall market, the sector and the stock to be in a decline. In digital currency market, we hope the bitcoin is in decline when shoring the alt coins. And if the daily MA 10-, 20-, 50- stacked below each other 10<20<50 is another bonus for shorting. let apply these rules. Shorting choose in bear market 07. Feb 2014, lower high formed in Jan 11, and consolidate in the neck line range ~ 790, but after 1 month, the market choose downside direction, when 07.Feb 2014, we can see obvious MA stacked 10<20<50, it's a sign of bear formed, good point to start short. 13.Aug 2014, lower high formed in 01.July 2014, and break the neck line in 14.Aug 2014, with daily MA 10<20<50 stacking, good point to shorting. 05.Mar 2018, daily double top seems formed, this chart pattern in bear market have strong power to drive the price down. we can setup shoring with stop loss in here. 05.May 2018, daily double top formed, we can shorting with stop loss from here: 29.July 2018, bitcoin price formed lower high in daily chart. shorting! 14.Nov 2018, bitcoin break the major support which support bitcoin ~ 1 year. the longer the hold, if breaks, the large dump will happen. shorting without reasons! Shorting in bull market I have to say shorting in bull market is very risky, bulls driven by FOMO of crowd. Don't short in bull market otherwise you're very experienced in trading. And one rule we should always keep in mind is we should ride the trends, not try to violate or control it. So in bull market, just find the right position to long, don't try to stand on the oppose/low possibility position.
BITSTAMP:BTCUSDEducation
by HuPan
Only 4 candles to make my 36th Birthday epic on July. :DThis is so realistic, logical and has been happened and proved before on Dec,2017 and potentially can happens again in this month. as I said in the previous post, in monthly time frame we are 1 candle behind compare to the price history to hit $20000 and above, and I'm sure I won't regret if the price of alts and btc goes to the moon and again I won't blame if not, at least I have done my best in my 10 years of trading life to take advantage of this glorious opportunity. Good luck and see you at the other side. ;)
COINBASE:BTCUSDLong
by taktip
6
BTC trend line filter suggest possible short-term recoveryBarring massive profit taking, it may be possible BTC will recoup some of its market cap late this weekend (EST) or early next week, benefiting the altcoins in the process. The snapshot here was taken about 18 hours ago, pivoting on the nearest intersecting long-term trend line of several which can be seen rising from the left to frame the area of concern. Several subjective anchor points were chosen, including a stretch frame over future time and its mirror along the same price line to the past. Given the diagram's probable need for accuracy to be of any real use, you might consider it pseudo-augury, just as some might consider anything outside MA- and Stochastic RSI-driven trading strategies linked to algorithmic filtering and parameterized activity to be. One leading difference with Ether on the BTC-side appeared to be an awareness retaining USD valuation of the virtual currency required healthy and positive trading on the virtual currency side. Comparing Ether/BTC over BTC/USD suggests some experienced traders may have saved investors from a far worse fire sale than we experienced. Best of success trading.
COINBASE:BTCUSD
by latticephreak
XRP ready for a bull run?Its safe to say the crypto world is here to stay and it looks like the market is ready for a BULL run. Here on the XRPUSD crypto pair i have identified an extremely exciting long opportunity. I don't think price will ever be this low again for the history of the pair. So I am definitely looking for to a rally. In my analysis using the fibonacci tool I have reason to believe this pair has found the floor of 2019. I am seeking new record highs soon to come here for the XRP currency over the next few weeks. I even see $.40 or higher on the table. Take a look at my analysis and give your feedback. The uRBAN genIUS
BITFINEX:XRPUSDLong
by UrbanGeniusOfficial
1
ZRX/USD - Definitely way more upside on this one...First analysis for the year. If I have more time, I'll try to increase the frequency of my analysis posts. Feedback, input, and comments are all welcome! ================================== Pair: ZRX/USD Time Frame: 1-Day The current trend for ZRX/USD is a weak bearish movement. Since November 2018, a descending triangle has been forming, as shown by the progressive lower highs. The current support is holding at the $0.25 zone. Price action will probably continue to stay within the triangle, but the market will be forced to pick a direction within the next few weeks (or months). If the bulls decide to break out upward, then their momentum could easily take them to the $0.45 zone (Fib 23.6%), and beyond that probably test the $0.58 zone (Fib 38.2%). However, any bullish sentiment should be taken with caution as there is still enough bearish volume to slowly push price action south, as shown by the thickness of the Kumo(Cloud) on the Ichimoku. The fact that there is still no cloud twist shows the possibility of downward movement. Additionally, on January 10, the thicker part of the cloud acted as a hard resistance and forcibly pushed the price action downward. The support at the $0.25 zone is tentative, and if broken can see the price action move south towards the $0.20 zone. Any further collapse can see the price action touch the $0.15 zone. Regardless, the general assessment for this asset pair is that there is still much more room on the upside. For the Bulls: There are a couple ways to play the entry points for this current market environment. Recommendation 1- Buy at price (up to $0.35) and wait for upward momentum. Take Profit Targets are: $0.58, $0.68, $0.78 Recommendation 2- Wait to see how the market reacts to the ascending triangle. If the $0.25 support is broken via bearish momentum, then: Set BUY targets: $0.20 ( up to $0.35 (as the bullish momentum is regained) Take Profit Targets are to remain the same. For the Bears: Recommended Short- $0.24- $0.25 (zone) Take Profit Target 1-$0.20 Take Profit Target 2-$0.15 For Rangers: There has not been a solid ranging window in the recent history of this pair. ================================== As always, manage your risk! -DC ---- NOT INVESTMENT ADVICE. The opinions and analysis expressed above are strictly my own. This analysis was sponsored by the Paribus Group (www.paribusgroup.io)
BINANCE:ZRXUSD
by dc_paribusgroup
Bitcoin Dives once again!!SELF DEVELOPMENT/METHODOLOGY/PSYCHOLOGY Bitcoin Dives once again !! BITFINEX:BTCUSD continues on a further south direction. If it breaks the @4500 level and will see a further push towards the @3000 level. From my experience stay on the sidelines or short sell. Follow your Trading plan, remained disciplined and keep learning !! Please Follow, Like,Comment & Follow Thank you for your support :) This information is not a recommendation to buy or sell. It is to be used for educational purposes only! Update idea
BITFINEX:BTCUSD
by SMPTrader
Bitcoin! Don't get stuck trying to catch a falling knifeSELF DEVELOPMENT/METHODOLOGY/PSYCHOLOGY Bitcoin Bullish reversal?? Think again!! Bitcoin has broken an important support line and the next support line is around the @4500 level. From my experience trying to buy this on its way down it trying to catch a falling knife. If your desperate and want to buy into bitcoin, at least wait until Bitcoin has consolidated or don't enter at all. Follow your trading plan, remain discipline and keep learning :)
BITFINEX:BTCUSDShort
by SMPTrader
2