TRADING IS TIMING / TIMING IS MONEY
Hey guys! I hope you are doing well?
I would like to talk about timing a trade. I lost a lot of money in the past because of not timing my trades on a proper way while I was correct about the direction of the trend. Timing a trade is of the upmost importance. I would even say the most important! When do I buy? When do I short? When will I go long long long!?
Above chart is a nice example. After the tether fake breakout, bitcoin dropped sharply on the 29th of October 2018. Seemingly a good time for a short position. However support at the low 6000 held price of bitcoin once again. This zone seemed unbreakable! Worse ... bart move came and price was rising again. You felt the optimism in the air and the strong believe that 6000 was the bottom! Result, close the hell my short positions and even change my bias ... I am going long here. A week later 6000 wall breached with a never seen before sell-off.
So what did the shorter do wrong here? Was it foreseen or unforseen? Was this an upredictable move?
No it wasn t. The shorter was impatient and led by the sentiment at that particular time. He changed his view because of price action at the moment and the believe that 6000 was never going to break. There were however in overall much much more bearish signs. Lower highs during 2018, descending channel, multiple times test of support at 6000. A breach was highly probable. Next he needed to keep focus on price! Shorting at 6250 or known support wasn t a good strategy. It was better to short at known resistance at 6800 or to wait after a sustained break of +- 5750 USD (lowest low). Shorting when indicators are showing max overbought conditions is a good tactic. Besides zooming out the chart to detect patterns are very usefull for timing a trade too.
What about timing in relationship with fundamentals? Fundamentals are important but only in longer time frames. In my first post I said that I truly don't see any practical use happening with crypto today. Bitcoin was created by a mysterious japanese guy in 2009, his name is satoshi spaghetti or something. Nobody however knows about his excistence. A bit like Abu Bakr from ISIS or scientology creators. It looks more like a sectarian religion. Ten years later and I still don t see any practical use in my direct environment. I know nobody but really nobody who is paying with bitcoin for service and goods. I know a lot of people around the globe. US, Asia, Australia, Africa. Nobody talks however about sending cryptos for use. As long if that doesn t change I remain bearish. I can t see crypto being used as a currency because of its volatility, maybe only possible in a closed economy (no interaction with other types of currencies). If I google about crypto then it is just about trading. Trading crypto is fun because of volatility. A playfield for traders nothing more or less. If you ompare with Amazon, netflix etc., real excisting companies with products and services, gold and silver the same then you hopefully see what I mean.
What is going to happen with the price of bitcoin? In my previous post I said that the chart is forming a head and shoulder pattern. This is very probable because all indicators are showing overbought conditions. Except daily stoch and stoch RSI, it will however reach soon there. Upward momentum is slowing down. A real correction is going to come soon. Looking down, when +- 5000 will be breached, then I only see two real support zones. USD 4250 previous resistance and important fib level, second 200 MA which is now around 3570. As long if real fundamentals are not there I foresee a break of the 200 MA, I KNOW first time in the whole bitcoin history! However same argument as before how more this support will be touched how bigger the change that it will break! Happened with Gold too.
Looking up, if by miracle the top of USD 5650 breaks then I really don't see bitcoin passing the huge supply zone of 5750 - 6000. Huge sell-of will start from that zone.
Another post about altcoins will come soon.
Hope you enjoyed the reading
* This was financial advice :) *
I would like to talk about timing a trade. I lost a lot of money in the past because of not timing my trades on a proper way while I was correct about the direction of the trend. Timing a trade is of the upmost importance. I would even say the most important! When do I buy? When do I short? When will I go long long long!?
Above chart is a nice example. After the tether fake breakout, bitcoin dropped sharply on the 29th of October 2018. Seemingly a good time for a short position. However support at the low 6000 held price of bitcoin once again. This zone seemed unbreakable! Worse ... bart move came and price was rising again. You felt the optimism in the air and the strong believe that 6000 was the bottom! Result, close the hell my short positions and even change my bias ... I am going long here. A week later 6000 wall breached with a never seen before sell-off.
So what did the shorter do wrong here? Was it foreseen or unforseen? Was this an upredictable move?
No it wasn t. The shorter was impatient and led by the sentiment at that particular time. He changed his view because of price action at the moment and the believe that 6000 was never going to break. There were however in overall much much more bearish signs. Lower highs during 2018, descending channel, multiple times test of support at 6000. A breach was highly probable. Next he needed to keep focus on price! Shorting at 6250 or known support wasn t a good strategy. It was better to short at known resistance at 6800 or to wait after a sustained break of +- 5750 USD (lowest low). Shorting when indicators are showing max overbought conditions is a good tactic. Besides zooming out the chart to detect patterns are very usefull for timing a trade too.
What about timing in relationship with fundamentals? Fundamentals are important but only in longer time frames. In my first post I said that I truly don't see any practical use happening with crypto today. Bitcoin was created by a mysterious japanese guy in 2009, his name is satoshi spaghetti or something. Nobody however knows about his excistence. A bit like Abu Bakr from ISIS or scientology creators. It looks more like a sectarian religion. Ten years later and I still don t see any practical use in my direct environment. I know nobody but really nobody who is paying with bitcoin for service and goods. I know a lot of people around the globe. US, Asia, Australia, Africa. Nobody talks however about sending cryptos for use. As long if that doesn t change I remain bearish. I can t see crypto being used as a currency because of its volatility, maybe only possible in a closed economy (no interaction with other types of currencies). If I google about crypto then it is just about trading. Trading crypto is fun because of volatility. A playfield for traders nothing more or less. If you ompare with Amazon, netflix etc., real excisting companies with products and services, gold and silver the same then you hopefully see what I mean.
What is going to happen with the price of bitcoin? In my previous post I said that the chart is forming a head and shoulder pattern. This is very probable because all indicators are showing overbought conditions. Except daily stoch and stoch RSI, it will however reach soon there. Upward momentum is slowing down. A real correction is going to come soon. Looking down, when +- 5000 will be breached, then I only see two real support zones. USD 4250 previous resistance and important fib level, second 200 MA which is now around 3570. As long if real fundamentals are not there I foresee a break of the 200 MA, I KNOW first time in the whole bitcoin history! However same argument as before how more this support will be touched how bigger the change that it will break! Happened with Gold too.
Looking up, if by miracle the top of USD 5650 breaks then I really don't see bitcoin passing the huge supply zone of 5750 - 6000. Huge sell-of will start from that zone.
Another post about altcoins will come soon.
Hope you enjoyed the reading
* This was financial advice :) *
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