ETH, awaiting the arrival of either zone

2 mai 2022

Monthly, original level
Criteria

• Original level, where the market takes the order from the RBR (Rally Base Rally), the lower level is not tested, due to the original not being required. The reaction is built upon the bi-monthly and weekly chart respectively with the reactive test occurring. (Review re-tested level, fig.3)
  

Bi-monthly level

• Note back to the previous structure, pertaining 2018 (Jan, 2018) - the structure has netted off the imbalance from the original all time high.
  
• This has now created a strong base for buying potential. To truly understand Fig.2, read the below section for further explanation.
  
• Fresh level or future level has already incurred a bi-monthly test once, but not a deep retest so consider this a reactive move upon a fresh level.
  
• Structure here is still strong as a basic test of the bi-weekly close has only been tested (which is the imbalance) see (Fig.1) below, as to the Continuation pattern (CP) was required in the previous structure.
  

(Fig.1)


(Fig.2)
Why is the previous structure important in making an informed decision?
History repeats itself, although - no trader/investor will know the exact date, instead risk calculated moves are prepared using what information is displayed upon the market structure.
The key zone is highlighted, firstly in purple to represent the bi-monthly zone.
The second white dotted lines, show a distinctive close which nets off the February 26, 2018 weekly high. The high closures upon a net 'zero' is a clear distinctive technical piece of information which allows confirmation the price is showing the next move from. This does not 100% always align, however, with probability and risk calculations upon reading the candle stick closures on higher time frames, sentiment can be clear.



Re-tested level, apply the confirmation rules upon a daily close (with an engulfing or 50% candle).
This chart is in conjunction with the explanation below.

(fig.3)


Daily Chart
Back test scenario for a hedged short or a short position if not holding ETH.

Criteria to consider,

• Where is the distal line, where stop losses should be placed?
  
• Where is the proximal line for a confirmed fresh level sell?
  
• Where are the profit taking points? upon the departure?
  

Here is the first markings in which from the steep curve, two positional points upon the three point "curve". Where any new formations from the departure to the arrival destination using a RBR (Rally Base Rally), on the reverse, upon a pattern completion within the market structure. The inverse application will be applied as new forms. However, note - the final zone on the RBR will become the weakest zone upon a fresh level or original level.
Where a re-tested zone has occurred, the confirmation rules will be applied - as this previous zone will be a trading range with overall back by a weekly, monthly structure.
The departure, must be an engulfing or 50% body candle, reactive candles in confirmation rules can be applied (this requires further detail).



Where is the next markup for "potential" profit points?
Adding in the DBD, scenario where a sell can be implemented, profits can be taken upon the first "rose" box, which will form a base, and from here a new drop will occur (time is unknown). The criteria is in place, the only factor is not know - time.



Here is a confirmed top of the structure.
Notice;
* Distal line - has been set as price failed to breach the overall trendline down to the right (forming a lower high, in combination with a strong fresh level).
* Confirmation reactive - spinning top has occurred on the daily candle with a strong engulfing candle in this instance has 'confirmed a strong departure move'. Now drop to the four close.
* Once the drop has been created, expect as with the same on the way up from the departure to arrival or demand to supply zone. A consolidation will form - with a now potential profit taking and awaiting the next move.

A small base has formed, with a parallel channel forming, where a break of structure, will be added (looking left to the previous inside bar occurring March 31, 2022) - the height of this candle should not be breached.
Safest entry, four hour, 8 hour or if advanced in this pattern - daily entry now is required.


New Distal and proximal lines have been added;
Note; this candle offers two things (highlighted in white circle).
A lower imbalance is now reactive, so this will instantly drive up buyers from the buying imbalance which sits above the main zone of the arrival point.
Price will react creating a large volume of activity, as expected and (more of often than not upon a first touch, will 'Whipsaw' upon a lower timeframe.

Price should look towards the 'white line' for a further selling opportunity.
The reason for this addition as the previous boundary nets across two distinct candles, the imbalance candle high upon the zone drawing. Secondly, the candle low which 'bounces' previously netting out the imbalance upon the previous touch of the higher zone.


After the bull trap which occurred and hit the zone (marked in white)- a shorter time frame trader will have identified this zone and placed a distal and proximal line for either a risk-calculated sell upon confirmations or an aggressive upon the imbalance close (netting off where the Horizontal line, shows clear distinction between where the overall pattern is heading, but provides relief for selling traders to add further liquidity to the market).

Here is the current outcome of the trading backtest, but applied with hedged sells.



The market at current:
There are two outcomes.

• The reactive buy has occurred upon the initial touch back on April 30, or $2700 zone.
  
• Await a further move which aligns to the final arrival point and begin to DCA investing wise.
  
• Looking at the weekly time frame will indicate further probabilities for the long term outlook.
  

Weekly



Do you enjoy the setups?

• Professional analyst with 5+ years experience in the capital markets
  
• Focus on technical output not fundamentals
  
• Position and swing trades
  

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LVPA MMXXII