The trend is your friend (until the end when it bends) Which one will win?
We are approaching the convergence two trends.
• The bottom teal line - This is a trend that has supported the pull back from 5k in September as well as the 7k pullback in November. We can also see it is currently supporting this pull back in January. That is bullish news… so far
• The declining red & white lines - This is the resistance & support trend line to a wedge pattern that started on the 17k high on the 1/6/18. We can see a few touches on it over the past couple weeks.
These two trends are about to converge.
In my experience, the closer we get to converging trends, the closer we get to extreme price action. The question is “which way?” Traditionally, descending wedge patterns are bullish in nature.
Could we drop below the blue trend support? ABSOLUTELY This does NOT mean panic. We still have the wedge support line that could take us to $7500 area. I would like to see price rebound above the blue trend lines ASTAT if that does happen or else it would be a bearish sign when we get to our next converging trends.
Could we break out before touching the blue trend? Absolutely. Converging trends are a estimated time frame but anything is possible.
Another bullish indicator?
• The .236 Fib - Starting from the bottom of the 7k pull back, we have found some support at the .236 fib retracement. This is a common place to find support on any coins retracement. I generally look to start scaling buys in between the .382 and .236 levels.
How am I playing this? I’m setting a plan.
• Fail to plan, plan to fail
I am laddering my buys in starting at 10250. I will take 25% of my available fiat and disperse it over 3 different entry points. 10250, 9500 and 8500. Laddering buys/sells helps remove the feeling of buyers/sellers remorse if the price drops lower and it reduces the FOMO if the price takes off. This is a non-negotiable for my trading style.
Here’s a story…
One of the challenges I had when entering the crypto trading world was identifying a “high probability trade” (meaning a trade that was more likely to make money than lose money). It honestly just felt like a risky guess. “Buy low sell high”…. sounds easy right? Psssh, no sweat. I got this. And then…. the FOMO train comes choo - choo’in down your tracks (TRX, ADA, XLM, XRP ring a bell?), you hop on the caboose (because this coin is going to the freakin’ moon) and all of a sudden…. BOOOM that joker hits a brick wall and you get dropped like a rebound after her ex comes back on the scene. Never to be heard from again… that coin ain’t even texting you back bro. Instead, I create multiple entry points on pull back that give me an attractive Risk vs reward.
My friends laughed at me when XRP was 2.50 and I told them I wouldn’t buy it again until it was sub 1.00. They laughed… and laughed… and laughed to 3.00+… and then didn’t sell. I just bought some .87 XRP a couple days ago… and then bought some .37 XLM.
