Bitcoin's morning shakeout has traders reeling
Atualizado
Good morning, traders. Price action this morning exemplifies the importance of short term traders not getting into a position when the market is moving sideways like it has been. This is what I'm constantly warning new traders about. There is no definitiveness of movement until price exits that sideways chop. Unfortunately that is also one of the most difficult things to get new traders to understand as they constantly feel the need to be in the market. This desire to do so is purely emotional and will result in losses if not kept in check. On the bright side, it does appear that we may have completed/are nearing completion of an ABC correction which would complete Wave 4 and send us up to complete Wave 5.
For those who have been following my live streams, I did mention the possibility on the 27th/28th that the move down which appeared to be a spring at that time could be the ST on a larger TF with the spring to come since price had dropped significantly lower than the previous low. And that when that spring came, it would likely be at the end of the pennant -- a drop through the bottom of the pennant causing traders to go short so that those shorts would fill the C.O.'s waiting longs. Looking at the 6H chart four days later, this does appear to be the case. The challenge faced when a movement first begins is understanding what's going on. A trader's understanding should refine itself as the movement plays out allowing the trader to lessen their risk of entry but simultaneously decreasing the potential reward. This is where understanding one's particular position as trader/investor comes into play. By being honest with yourself and understanding what makes you who you are as a trader/investor (current wealth and financial position, long/short/mid-term financial and wealth goals, level of risk aversion or tolerance, and the TF you are able to trade on) you are able to develop a trading style that provides the greatest possible return for yourself. Not doing so will lead to failure in proper risk management and subsequent loss of capital.
If you joined our live streams yesterday, you know I mentioned that I didn't expect to see any large directional movements out of the TR until after the monthly close. This most recent price action has set the stage for that further potential advancement. By pushing price down as has been done this morning, we are seeing a lower low in price from the July 27th swing low. We are also seeing RSI dipping into oversold on the larger TFs. A strong advance from this point would create a possible higher low in oscillators at those same points thereby creating bullish divergence and signalling further price appreciation. As we have been discussing during our live streams, keeping price within the TR creates boredom for traders causing some to exit before definitive movement and others to be shaken out with a spring. This is the removal of excess supply from the market -- "getting rid of the weak hands" as it is often referred to -- and is what appears to potentially be occurring this morning. To validate this, we need to see strong movement up as the day progresses. This strong push down before the monthly close is akin to what happens before CME and CBOE futures closes. Failure of price appreciation into this evening (beyond the monthly close) would have me considering this to be a top in spite of everything we have been seeing recently. It doesn't make sense at this time, but one of the most important skills to have as a trader is the ability to remain fluid when the market signals something different from your current position.
Yes, we are on multiple social media accounts, however TV does not allow us to advertise them. I'm sure our followers here are astute enough to find us. Thank you for following and be sure to leave a "like."
For those who have been following my live streams, I did mention the possibility on the 27th/28th that the move down which appeared to be a spring at that time could be the ST on a larger TF with the spring to come since price had dropped significantly lower than the previous low. And that when that spring came, it would likely be at the end of the pennant -- a drop through the bottom of the pennant causing traders to go short so that those shorts would fill the C.O.'s waiting longs. Looking at the 6H chart four days later, this does appear to be the case. The challenge faced when a movement first begins is understanding what's going on. A trader's understanding should refine itself as the movement plays out allowing the trader to lessen their risk of entry but simultaneously decreasing the potential reward. This is where understanding one's particular position as trader/investor comes into play. By being honest with yourself and understanding what makes you who you are as a trader/investor (current wealth and financial position, long/short/mid-term financial and wealth goals, level of risk aversion or tolerance, and the TF you are able to trade on) you are able to develop a trading style that provides the greatest possible return for yourself. Not doing so will lead to failure in proper risk management and subsequent loss of capital.
If you joined our live streams yesterday, you know I mentioned that I didn't expect to see any large directional movements out of the TR until after the monthly close. This most recent price action has set the stage for that further potential advancement. By pushing price down as has been done this morning, we are seeing a lower low in price from the July 27th swing low. We are also seeing RSI dipping into oversold on the larger TFs. A strong advance from this point would create a possible higher low in oscillators at those same points thereby creating bullish divergence and signalling further price appreciation. As we have been discussing during our live streams, keeping price within the TR creates boredom for traders causing some to exit before definitive movement and others to be shaken out with a spring. This is the removal of excess supply from the market -- "getting rid of the weak hands" as it is often referred to -- and is what appears to potentially be occurring this morning. To validate this, we need to see strong movement up as the day progresses. This strong push down before the monthly close is akin to what happens before CME and CBOE futures closes. Failure of price appreciation into this evening (beyond the monthly close) would have me considering this to be a top in spite of everything we have been seeing recently. It doesn't make sense at this time, but one of the most important skills to have as a trader is the ability to remain fluid when the market signals something different from your current position.
Yes, we are on multiple social media accounts, however TV does not allow us to advertise them. I'm sure our followers here are astute enough to find us. Thank you for following and be sure to leave a "like."
Nota
I went back and recounted my waves and this is the count I have beginning from the June low til now. It allows the movement up to the weekly block around $9500 which is what I expect and completes the movement to the top of the channel for Wave 5. Additionally, the shakeout last night should most likely be viewed as a spring leading to completion of the reaccumulation phase and subsequent mark up (wave 5). As always, my live streams and, especially in this case, my TA-only videos explain the previous and expected price action in greater depth. TV will not allow me to post any links or mention where they can be found, but you can always PM me or I have no doubt you can find our company name on the various social media sites. Thanks for following, and be sure to hit the "like" button.Nota
Remember, we can still fall a bit further, but I believe wave 4 has completed or, in that former case, is very near completion.
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