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Fallingknife

What Is a Falling Knife in Trading? What Is a Falling Knife in Trading? It’s often repeated that traders should ‘never catch a falling knife.’ This phrase highlights the risks of buying into a rapidly declining asset. Understanding what a falling knife is, its causes, and strategies for trading it may help traders navigate these sharp declines more effectively. This article delves into the intricacies of falling knives and offers insights on how to approach them with caution. Understanding the Falling Knife Pattern A falling knife consists of candlesticks that depict a significant rapid drop in an asset’s price, including stocks, commodities, forex pairs, indices, cryptocurrencies*, and more. This situation is often driven by negative news, poor earnings reports, or broader market sell-offs. Identifying a falling knife involves recognising several key characteristics. Firstly, the decline is steep and sudden, typically marked by large red candlesticks on a price chart. The volume often increases as the price falls, indicating panic selling. Technical indicators such as the Relative Strength Index (RSI) might show oversold conditions, suggesting the asset is undervalued in the short term. Common tools used to identify falling knives include: - Moving Averages: When short-term moving averages cross below long-term moving averages, it signals bearish market sentiment. - Bollinger Bands: Prices breaking below the lower band can indicate a falling knife. - Volume Analysis: Spikes in trading volume often accompany these sharp declines, confirming the intensity of the sell-off. In terms of candlesticks, a falling knife typically produces several bearish candles with long bodies and small wicks. They may appear as a large engulfing candle on a higher timeframe. Recognising these patterns is crucial for traders. Misinterpreting a falling knife can lead to significant losses, as attempting to catch a falling knife—buying during the steep decline—without proper analysis can be risky. Instead, many traders wait for signs of stabilisation or reversal before considering an entry point. Causes of Falling Knives A falling knife generally occurs due to several specific catalysts, each capable of triggering a rapid and substantial decline in an asset's price. Understanding these causes, including technical factors, is essential for traders aiming to navigate such volatile situations effectively. Economic Events and News Releases One primary cause of falling knives is significant economic news. For instance, announcements of interest rate hikes by central banks can lead to widespread stock market sell-offs. Similarly, unexpected changes in economic indicators like unemployment rates, inflation, or GDP growth can trigger sharp declines. Traders react swiftly to such news, often leading to panic selling and steep price drops. Earnings Reports and Company-Specific Issues A falling knife stock pattern can be triggered by poor earnings reports or disappointing financial results from a company. When a company misses earnings expectations or issues negative guidance, investors may lose confidence, resulting in a rapidly falling stock. Additionally, company-specific problems such as legal issues, management scandals, or product recalls can lead to rapid price declines as investors reassess the company's prospects. Broader Market Conditions and Trends Broader market trends and conditions play a significant role in causing a falling knife in stocks and other assets. During periods of market volatility or bear markets, negative sentiment can spread quickly, leading to sharp declines in asset prices. For example, during the financial crisis of 2008, widespread fear and uncertainty led to massive sell-offs across various sectors. Similarly, market corrections or crashes can create environments where falling knife patterns are more likely to occur. Geopolitical Events Geopolitical events such as wars, political instability, or trade tensions can cause abrupt market reactions. For instance, escalating trade disputes between major economies can lead to uncertainty and fear, causing investors and traders to exit positions rapidly. Technical Factors Technical analysis also plays a crucial role in falling knife patterns. Key technical factors include: - Breaking Support Levels: When an asset's price falls below critical support levels, it can trigger further selling as traders perceive a lack of price stability. - Overbought/Oversold Conditions: Oscillators like the Relative Strength Index (RSI) showing overbought conditions can precede a falling knife as prices correct sharply. At the same time, the RSI may enter the oversold area during the falling knife pattern. - Bearish Chart Patterns: Patterns such as head and shoulders, double tops, or descending triangles can signal potential sharp declines, leading to falling knife scenarios. Risks Associated with Falling Knife Trading falling knives carries significant risks, primarily due to the rapid nature of the price declines. Understanding these risks is crucial for traders aiming to navigate such volatile situations. Potential for Significant Losses The most apparent risk is the potential for substantial financial losses. When an asset's price plummets, catching the falling knife can result in buying at prices that continue to drop, leading to immediate and severe losses. False Bottoms and Dead Cat Bounces Traders may mistakenly interpret temporary price stabilisations or minor recoveries as the end of the decline, only to face further drops. These false bottoms and dead cat bounces can trap traders in losing positions. Increased Volatility Falling knives are often accompanied by heightened market volatility, making it challenging to analyse short-term price movements. This volatility can result in rapid and unexpected changes in asset prices, complicating risk management. Psychological Challenges The psychological impact of trading falling knives should not be underestimated. The stress and emotional strain of dealing with sharp losses can lead to irrational decision-making, such as holding onto losing positions for too long or making impulsive trades. Technical Analysis Limitations While technical indicators can help identify potential entry points, they are not foolproof. The rapid and severe nature of falling knives can render technical analysis less reliable, as price movements may not follow traditional patterns. Liquidity Issues During sharp declines, liquidity can dry up, leading to wider spreads and slippage. This makes it harder to execute trades at desired prices, potentially exacerbating losses. Examples of Falling Knife Events Now, let’s take a look at a couple of falling knife examples. To start identifying your own falling knives, head over to FXOpen’s free TickTrader platform to explore real-time charts across different asset classes. Onset of the Coronavirus Pandemic and the Nasdaq 100 In early 2020, the onset of the coronavirus pandemic triggered a dramatic fall in global financial markets. The Nasdaq 100, heavily weighted with speculative tech stocks, experienced a sharp decline as investors reacted to the uncertainty and potential economic impact of the pandemic. From mid-February to late March 2020, the Nasdaq 100 dropped by over 30%. This steep decline represented a classic falling knife pattern, characterised by rapid sell-offs and increased market volatility over the course of several weeks. Traders who attempted to buy into the market too early faced significant losses as the market continued to fall before eventually stabilising and recovering later in the year. EUR/USD After Strong US Inflation Data On April 10, 2024, the release of March US inflation data led to a falling knife event in the EUR/USD currency pair. Traders had been closely monitoring the Consumer Price Index (CPI) report, anticipating that a lower-than-forecast reading would prompt the Federal Reserve to lower interest rates later in the year. The forecast was set at 3.4%, with a lower or at-forecast figure expected to weaken the dollar. Instead, the headline CPI YoY reading came in exactly at 3.5%, defying expectations. This unexpected data triggered a rally in the dollar and a sharp sell-off in EUR/USD. The pair plummeted rapidly, and the decline persisted until the end of the trading week, illustrating how sudden economic data releases can lead to sharp and sustained price drops. Strategies for Trading Falling Knives Understanding the catalyst behind a falling knife is crucial for determining whether it’s likely to rebound soon or persist as a trend. Events that cause fundamental repricing, such as poor earnings data, significant or unexpected news/economic releases, or unique risk events like currency intervention or financial crises, often lead to prolonged falling knives. In contrast, temporary sharp corrections might be due to overreactions to already priced-in news or transient market fears. Recognising these catalysts helps traders decide whether to take a position or wait for volatility to subside. Additionally, the timeframe of the falling knife provides valuable context. A falling knife on a 5-minute chart could indicate a sharp intraday decline, potentially recovering before the trading day ends. Conversely, on a 4-hour or daily chart, a sharp decline may suggest a continued downtrend over several days or weeks. Traders can use this information to look for short opportunities on lower timeframes or prepare for longer-term moves. Common Strategies Traders Use The insights gained from analysing market conditions can help traders to decide whether to short the falling knife or stay out of the market and wait for a bottom. Shorting the Falling Knife Traders looking to short a falling knife should exercise caution. Increased volatility during sharp declines can make it difficult to set appropriate stop-loss levels without a sub-par risk/reward ratio. The best entry can potentially be found during a pullback. As some traders think the price is bottoming out, their stop losses being triggered as the price continues to decline can fuel another leg lower. Traders can look for breakouts from bearish chart patterns like rising wedges, bear flags, or bear pennants. Alternatively, waiting for the bullish structure of the pullback (higher highs and higher lows) to break down into a lower low and lower high can indicate the next leg lower is underway. This approach offers traders confirmation that the knife is continuing to fall and an appropriate place to set a stop loss above the pullback’s high. Buying After a Falling Knife For those looking to catch the bottom, confirmation is essential. Using a pair of moving averages, such as 20-period and 50-period EMAs, can help. When the 20-period EMA crosses above the 50-period EMA, and the price closes above both, it suggests the downtrend might be over. However, momentum indicators like RSI and MACD can falsely signal market turns during steep declines, but they may have some value on higher timeframes. Generally speaking, one of the potentially effective strategies for catching a falling knife is to wait for the price to break above the previous lower high of the downtrend. This would demonstrate that the market has been able to break above a point at which it previously found resistance, allowing traders to potentially switch their bias to bullish and seek entry points. The Role of Patience and Discipline in Trading Falling Knives Patience and discipline are paramount when trading falling knives. Impulsive trades driven by the fear of missing out can lead to significant losses. Traders are required to wait for clear signs of trend reversal or continuation before entering a trade. This involves adhering to predefined strategies and not deviating due to emotional reactions to volatile market movements. Likewise, maintaining discipline in setting and following stop-loss levels, adhering to risk management principles, and avoiding premature entries can potentially enhance trading effectiveness. The Bottom Line Navigating falling knives requires careful analysis and disciplined trading strategies. By understanding the causes and employing effective techniques, traders can potentially better manage these volatile situations. To explore these strategies further and enhance your trading skills, consider opening an FXOpen account. With the right tools and knowledge, you can approach falling knives with greater confidence and precision. FAQ What Is a Falling Knife in Trading? A falling knife in trading refers to a rapid and significant decline in an asset's price, often triggered by negative news, poor earnings reports, or broader market sell-offs. This sharp drop can be volatile and difficult to analyse, making it challenging for traders to time their entries and exits. Should You Ever Try to Catch a Falling Knife? Catching a falling knife is highly risky. Therefore, the theory states it’s not recommended for most traders. The rapid decline in price can continue further than anticipated, leading to significant losses. To minimise risk, traders wait for signs of stabilisation or reversal before considering an entry. How to Catch a Falling Knife? Catching a falling knife involves identifying potential reversal points through technical analysis. Traders often wait for confirmation, such as a break above previous resistance levels or a moving average crossover. Patience and strict risk management, including setting tight stop-loss orders, are essential when attempting this strategy. What Is a Falling Knife in Crypto*? In the crypto* market, a falling knife refers to a sudden and steep decline in the price of a cryptocurrency*. This can be triggered by regulatory news, security breaches, or market sentiment shifts. Due to cryptocurrencies*' high volatility, falling knives can be particularly severe and difficult to analyse. *At FXOpen UK, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rule. They are not available for trading by Retail clients. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Editors' picks
Education
by FXOpen
7
BTC-->2opportunities for getting shorthello guys... Based on the chart analysis, it appears that BTC has formed a falling knife pattern, indicating a potential downward movement. To capitalize on this, you have a few options: 1-Take a short position right now and relax. 2-Exercise patience and wait for the price to touch the green area before taking a short position. 3-Take positions in both areas, depending on your preference and risk tolerance. Please keep in mind that the target for these positions is $27680. Best of luck with your trading decisions! _______________________________ always do your research. If you have any questions, you can write them in the comments below, and I will answer them. And please don't forget to support this idea with your likes and comment
Short
by melikatrader94
65
Will Bitcoin hold $16000-Falling knife or Swing failure pattern?CME:BTC1! BTCUSD.P BINANCE:BTCUSDT Will Bitcoin hold $16000-Falling knife or Swing failure pattern? Is taking a long trade here a good idea or will we lose $16K? I look at price action as it happens and what levels to look out for if we lose $16000. If this is a Swing Failure pattern playing out, I explain how I will trade it Not Financial advice Trade with paper money before using real money. Safe trading! Shawn
BYBIT:BTCUSD.P
by zartraderguy
BTC: Don't Catch a Falling CoinPrimary Chart: BTC's Right-Angled Triangle "Don't catch a falling knife" is an oft-quoted aphorism among traders and investors. At its core, it's a warning about the dangers of buying into a downtrend or sharp drop before price has shown evidence of a bottom. Of course, there are profitable trading moves around buying dips in uptrends , and this cautionary phrase is not meant to address that situation. And some expert traders frequently do attempt to catch falling knifes at key supports, with tight stops, and with smaller position size, while acknowledging the low-probability nature of the obvious countertrend play. BTCUSD has experienced a severe ten-month downtrend since its all-time high. Experts have debated far and wide whether cryptocurrencies such as BTC and ETH and others have put in a lasting bottom or whether new lows are ahead. To attempt to catch the bottom in BTC now is as risky as it was back at the end of March 2022 after BTC's first bear-market rally. To buy BTC now, especially blindly and without a trading or investing strategy, is a lower probability bet than waiting in cash (for investors) or positioning on the short side (for traders). This is a time when the saying "don't catch a falling knife" applies. The author acknowledges, however, that fundamentally oriented investors may have reasons apart from technical charts to buy BTC for the very long term that may indeed remain valid. But even some well-known fundamentally driven professional money managers in this decade do not just ignore what the technicals and price trends shown on the charts are saying. BTC's Established Downtrend Since November 10, 2022 BTC has remained in a severe downtrend since November 2021 when it made an all-time high at $69,000. The Primary Chart shows a basic downward trendline where each bear rally has found resistance. Note also how this downward trendline rejected price repeatedly several times in late March and early April 2022. Once again this week, just when many wondered whether BTC was about to prove that its June 2022 low was a lasting one, BTC reversed right at this trendline. This trendline is also shown by the zero line of the Fibonacci channel, drawn on the chart below Supplementary Chart A: Fibonacci Channel for BTC The Primary Chart also shows that price has held above key support at June 2022 lows in recent months, which causes BTC's price action to form a sizeable right-angled triangle . Unlike symmetrical triangles, right-angled triangles imply a breakout direction. Martin Pring, a well-known technical expert, writes: "The symmetrical triangle does not given an indication of the direction in which it is ultimately likely to break. The right-angled triangle does, with its implied slanting level of support or resistance." But one cautionary point Pring makes is that triangle breakouts experience retracement moves frequently. If the original breakout is missed, some savvy traders often move in to catch a backtest if one occurs. Recent Confirmation of BTC's Downtrend BTC has confirmed its downtrend remains viable this week. Price tried to break above the downward trendline shown on the Primary Chart above. But it failed right at this resistance level. BTC has also tried to break and hold above three anchored VWAPs from the past several months. Each VWAP is placed at a key level of support / resistance at a recent swing high or low. The first is the anchored VWAP from May 31, 2022. The second is the VWAP anchored to the June 2022 low., the third is the VWAP anchored to the mid-August 2022 high. Below, Supplementary Chart B shows these three anchored VWAPs. More importantly, BTC's chart shows three failed breakout attempts above the May 31, 2022, VWAP. It shows five failed breakout attempts above the VWAP anchored to the June 2022 low. It shows one failed breakout attempt as to the VWAP anchored to the mid-August 2022 peak. Supplementary Chart B: Three Anchored VWAPS The most recent breakout attempt during the first week of September 2022 was notable for its speed and force. Within a mere six days, BTC's price rose 22.87 percent from the low to high of that swing. Considering that swing, however, most of the gains have been lost in the 3-4 days since its peak on September 13, 2022. BTC has also lost all its key retracements of this 22.87% six-day rally, except for the .786 retracement. Losing the .50 and .618 retracements of this rally, combined with the multiple failed breakouts above the May, June and August anchored VWAPS, provides further evidence to support the downtrend's continuation in the near term. Supplementary Chart C: Fibonacci Retracements of 22.87% Rally in Early September Further, the slope of the 8-day EMA provides a useful gauge of near term trends and momentum. Since the 22.87% rally ending September 13, 2022, the 8-day EMA has decisively begun to slope down again. Price has also crossed below it and found resistance into it. The 8-day EMA has also crossed below the 21-day EMA, a more intermediate-term trend gauge that also has turned down. Supplementary Chart D: Slope of 8-day and 21-day EMAs Attempting to guess where the bottom is and blindly buying, hoping that the price will rise, can sometimes work very well. But it fails more often than it works. A more strategic and prudent approach might be to evaluate some of the most simple trend gauges. Tuning out all the news and other noise about potential bottoms, one could consider the 8 and 21 EMAs on this chart, together with the other technical evidence. They have signaled along with the anchored VWAPs that the path of least resistance is lower for now. Further Evidence from Recent Peak in Momentum The 22.87% six-day rally in early September was impressive. Without seeing the downward trendline, one might suspect that BTC might be attempting to prove its June 2022 lows were final lows. But not only did price peak right at the downward trendline as one might expect, RSI momentum peaked just below the resistance level formed over BTC's entire summer rally since June 2022 lows. Note how RSI peaked at approximately 61.34 on September 12, 2022, the day before price hit the trendline and reversed lower. This is a common spot where RSI can reach during valid downtrends. In other words, RSI in a downtrend can find resistance at an upper range of 50-65. Supplementary Chart E: RSI Peak at Resistance on September 12, 2022 The Fibonacci Channel's Dynamic Support Levels The Fibonacci channel not only provides a clear trend gauge with its zero line, it also provides dynamic levels of support and resistance that run parallel to the predominant trend. The chart below shows the Fibonacci channels parallel lines with annotations pointing to areas of dynamic support where price may reach in the coming weeks. First, the teal line is the .236 retracement, a line immediately below this Fibonacci channel's zero line that runs parallel to it at a .236 proportion of the entire channel. Each of these Fibonacci channel supports are dynamic, which means that they change as time progresses. The teal .236 line would be the first multi-week support to consider around $14,700-$16,500. If this line does not hold, then the next line down, the .382 line (purple) offers support at approximately $10,000 to $13,000 in late September and early October 2022. Supplementary Chart F: Fibonacci Channel Intermediate-Term Support Levels Violation of Short-Term Levels Before the Next Trend Move Before the next downtrend move can occur, however, the June 2022 lows must break. The June 2022 lows lie at $17,592-$17,930. Another key level must also be broken before concluding that June 2022 lows will be tested. This level is $19,223, which is .786 retracement of the entire summery rally for BTC. This 19,223 level also coincides with the other Fibonacci .786 retracement of the early September rally at $19,447.57 (shown in Supplementary Chart C above). Supplementary Chart G: Fibonacci Retracements for Entire Summer Rally in BTC Volatility Compression Suggests Directional Move Ahead Lastly, volatility typically runs in cycles. Volatility compression leads to volatility expansion, and volatility expansion tends to lead to volatility compression. One way to gauge when the next directional move is nearing is to examine volatility. The Bollinger Bands help traders do so. The Bollinger Bands plot a line at a given number of standard deviations above and below a mean. The Bollinger Bands on BTC's chart below are plotted at the default of two standard deviations above and below the mean. The Bollinger Bands on the daily chart of BTC show volatility has compressed despite the 22.87% move in early September and the sharp selloff since. This suggests a significant trend move is approaching rather than completing. Given evidence of BTC's downtrend being well established, consider that the probabilities favor a downward trend move in the coming weeks associated with the end of the volatility-compression and the start of its expansion. Supplementary Chart H: Bollinger Bands and Volatility Compression _____________________________________ Please note that this technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction. BINANCE:BTCUSDT CME:BTC1! BITSTAMP:BTCUSD KRAKEN:BTCUSD
BITSTAMP:BTCUSDShort
by SquishTrade
22
🚨Short-Term ⚠️POSSIBLE⚠️ Bottom Levels For #Bitcoin $BTC🚨After breaking the downwards trend to the upside, the $BTC price has crashed back down into the wedge, forming a small bear flag inside. IMO this is showing that the mid-term pattern that $BTC has been in will break to the downside. This will possibly be a big "fake-out" for bears and might cause some sort of a short-squeeze situation. In anticipation of that, I have charted out these possible bounce levels, ranging from ~$26K to ~$28K. I have done this, using the macro Fibonacci Retracement levels, the Fib levels of the most recent short-term wave, and 0.618 Fib levels which sit between 1 & 1.618 of each Fib Range in a "scaling down" method. (It was way too busy to leave on the chart, but imagine Russian dolls. 1 Fib range inside another, inside another, etc.) Important "possible-bottom" levels: $27,550 $27,071 $26,531 $26,200 $25,982 ***This is my own opinion, based on chart data. Not Financial Advice!***
by DoozerInvest
How To Catch A Falling Knife...Since September PYPL has been having a bad time. Sucks for those holding shares, but for others, it sets up a good opportunity for large gains. There are two scenarios I'm expecting to play out 1. It goes down to the weekly SR level and volume area at ~$100 and reverses from there. If that doesn't happen, exiting before the gap under $97 is the move. 2. Assuming the first doesn't play out and it gaps down, I am expecting the monthly SR level to hold. It held during the covid crash, so I think its a decent bet. Obviously if it is volatile, wait for price to settle down before entering and manage your risk accordingly. Very good RR here.
NASDAQ:PYPLLong
by DefiJoth
Red Pill vs. Blue Pill BTC USD Risk-Reward Play 🍕Zooming out to the 4 hour, and drawing the falling wedge would indicate a potential now to retrace and retest the wedge. Should this bounce with volume, $61k BTC is not out of the question. Now with that said, momma always told me not to try catching a falling knife. Especially a pizza knife. Those circular things can really do some damage if handled incorrectly. The risk-reward setup to the savvy trader would indicate a great potential to buy, with a willingness to take a minimal stop. Good luck friends, see you at The Falling Wedge Pizzeria. 🍕
by Shadowfigure
1
$BTC To Have One More Fall To End The Month *Smart Money Theory**SMT = Smart Money Theory = everything you think that is not retail related to trading. First, SMT does not believe that triangles, wedges, trendlines, channels, harmonics, etc. has any effect on how price reacts. The second is to recognize that the price is not random, it is set by an algorithm controlled by those that control the asset. The Third thing to remember is price will move toward Liquidity and Balance. That's the basics. The rest is very unique in the vocabulary you need to have and the concepts that wrap around these ideas. Currently, the price is sitting atop the weekly fair value gap. A fair value gap is an imbalance that price seeks out. They act as magnets and can also act as opposite magnets when price enters a fair value gap, they can repel almost instantly. This goes for any time frame, find these fair value gaps and mark them and see how price reacts to them. (fair value gap is the gap that is left in a three candle succession where the candles do not touch. heres's the weekly fair value gap on chart:) Sitting below that we have a Daily Bullish Breaker within the weekly fair value gap. Breaskers are a number 1 attraction to price especially if the are sitting inside a larger fair value gap. This is the picture of the main chart. This has convinved me that the price will have another fall to the breaker. It may be rejected as soon as it hits the breaker. Also you have to watch for the median of the breaker or the median of the fair value gap as price could reach either of those to fulfill its seeking of imbalance. (Here's the 4 hour chart depicting each median. I use a fib and mark the 50% lin of each of the Breaker and Weekly Fair Value Gap. It could possibly reach the low of the breaker which is why my stop loss is just past the breaker to give some room as I have seen price stab through the breakers. Worst case scenario is that it fills the weekly fair value gap but that is highly unlikely. There is a probability. I just personally dont think It will do it. Although Bitcoin did hit the Monthly fair valu gaps 3 months in a row (May, June and July) (Here's the link depicting the monthly fair value gaps being filled as well as the August candle filling the void between April and June fair value gap So there's the probability but is it likely in this situation? I think not because the monthly candles have already balanced and a fair value gap will not form between September to November. Am I planning on catching a falling knife. Yes. Does that mean you should? That is up to you. If fact. I'll probably lead with small amount in that opening price, and add to it iof it does go down and hit the medians. If it leaves the breaker, I'll be out with my stop loss, but then look for another long at the bottom of the fair value gap. Why do I have my take profit where it is? Well if we hit a daily Breaker (also known as a PD Array) then on the opposite end you look for the smaller time frame to form your exit. So Daily Entrance 4 hour exit. If it was the weekly Entrance, then I'd be looking for a daily exit. Get the drift og how we look for entrances and exits? So the exit is the median of the 4 hour Fair value gap going the opposite direction. EDIT* There is a little bit of imbalance between September and November. That line is at 52944.96. Once the price falls into the breaker, that line will be crossed and the monthly candles will then be balanced. This just gives me another reason as to why it could and will fall And I believe it will happen this month. And bounce around the beginning of December so December forms a little bit of a wick. I hope this was informative as to how smart money is perceived and how it is different than the train of thought that is retail theory. We'll just have to wait and see if this happens. I think of how the weekly candles form, the monthly candles, the daily candles, and it's apparent we're ending November on a red candle in BTC. But the price has balanced on the monthly so now I'm thinking about the weekly moving into December and the month of December should be a green candle. with a little bit of a wick. So what better way to depict that than to show how this might play out over the next two weeks. These are my thoughts and my thoughts only. Mentored by Inner Circle Trader, who mentors us in Forex and Indices Futures, he hates crypto but his ideas apply to all markets so I am applying them here. I'll have to sign off with his signature sign off. Good Luck and Good Trading :) COINBASE:BTCUSD
COINBASE:BTCUSDLong
by BodiesXWix
7
Longer Term Targets for EURUSDEURUSD has barreled through my previous targets tagged to this post. It has continued to consolidate and after a busy news week and despite volatility there was no true movement in the exchange rate it seems to have found some acceptance. However, with another busy news week that holds lots of weight in both pairs, I expect to see some nice movement in the price and have set swing targets for the rate from early November 2020 when the expeditious end of year run ultimately began. Though buyers now will have time to get out of positions with ease, I expect for it to have some crazy swings through these levels.
Short
by crawfordpaul