Descending triangle on BTC - Don't draw triangles on wicks!
I see a lot of traders showing a symmetrical triangle on Bitcoin.
When a wick breaks under your fib level but the candle closes above the fib level, you consider the fib level to be unbroken right? So why would you treat triangles any differently? The wicks are price deviations that you don't take into account when pattern trading, just like you don't take a SFP into consideration because that too is a deviation. If you are not sticking to candle body vs candle sticks consistently, you are trading what you feel instead of trading what you see.
The truth is that the dollar is bullish, and this is a descending triangle if you take into account ONLY the valid part of the sticks: The candle body.
I don't expect our little bear market to last long, the DXY might have s/r flipped on the daily, which might push btc to around 25-27k.
I don't trade this patterns' likely breakdown, I am short bitcoin because the dollar is bullish (last bullish move for the dxy, btc dumped 20%). However, the base of our descending triangle is also our daily demand which is highly convenient. I will probably close this short at the daily demand level below it, instead of riding it out until 25k.
Please don't forget we never confirmed our 2017 high as support, which means it's highly likely we will revisit this point at some date in the future. However, I think the upward potential on the DXY is too low to warrant such a steep drop on BTC.
Please also don't forget BTC tends to drop 80-90% from its highs with an average dump of 30%. Most margin traders will not make any money at the end of the ride, because they've been shaken out, so don't margin trade if you don't know proper risk management.
When a wick breaks under your fib level but the candle closes above the fib level, you consider the fib level to be unbroken right? So why would you treat triangles any differently? The wicks are price deviations that you don't take into account when pattern trading, just like you don't take a SFP into consideration because that too is a deviation. If you are not sticking to candle body vs candle sticks consistently, you are trading what you feel instead of trading what you see.
The truth is that the dollar is bullish, and this is a descending triangle if you take into account ONLY the valid part of the sticks: The candle body.
I don't expect our little bear market to last long, the DXY might have s/r flipped on the daily, which might push btc to around 25-27k.
I don't trade this patterns' likely breakdown, I am short bitcoin because the dollar is bullish (last bullish move for the dxy, btc dumped 20%). However, the base of our descending triangle is also our daily demand which is highly convenient. I will probably close this short at the daily demand level below it, instead of riding it out until 25k.
Please don't forget we never confirmed our 2017 high as support, which means it's highly likely we will revisit this point at some date in the future. However, I think the upward potential on the DXY is too low to warrant such a steep drop on BTC.
Please also don't forget BTC tends to drop 80-90% from its highs with an average dump of 30%. Most margin traders will not make any money at the end of the ride, because they've been shaken out, so don't margin trade if you don't know proper risk management.
Comment:
I will long when my indicators line up and we receive a bullish fractal on the daily.
Comment:
If you do want to CONSISTENTLY use candle wicks, then do remember that confluence is most important. That means that if there's a big demand level at the bodies, the bodies take priority. And you need to take this into account when trading, that you're not using the strategy with the highest confluence.