Well good morning again ladies and gentlemen and welcome to my daily look into the exciting world we call Bitcoin. Today I have the 4hr time frame pulled up after losing some ground over night. Just another day in the ups and downs of this roller coaster. As we approach the end of the pattern on the chart we are reaching a crossroads... Do we continue walking with the bulls or do we flip heel and start following the bears. Either prospect should be enticing to traders. Lets take a closer look at the current situation and see what we can make from it.
First thing I want to do is mention the fact we lost the support of the 4hr 50 MA (orange line). What is an MA first of all? Well its a "moving average" Which is basically a representation of the last 50 candles in the form of a line on the chart. The 50 MA is known for a few things. It can become support or resistance depending on where the candles are. Pretty simple indicator. But there is a bit more. When the candles are above the 50 MA its considered bullish while the opposite is true when we are below the indicator. You can also use the 50 MA in unison with the 200 MA for instance as well and if the 50 MA is above the 200 MA things are generally bullish while if the 50 MA is below the 200 MA its considered bearish. Pretty simple yet quite effective.
So like I said we lost the support of the 50 MA on the 4hr (orange line) while at the same time losing the clouds support. 2 bearish events at the same time. That may account for the drop we are seeing over the last few hours. We seem to be respecting the borders of the big triangle we are still inside of. We should know the direction of the breakout within the next few days I imagine. If we remain below the 50 MA and the cloud on the 4hr things may not go well for the bulls. No sweat though. If it drops I buy more. If it rises I get profit. Either way I win.
If you want to trade make sure you exercise risk management by setting a stop loss. Dont be a hero. Just set the stop loss. The results of not doing so can be devastating to your portfolio. That is how I play these triangles. I mean nobody is clairvoyant therefore I need to plan my trades accordingly. If I enter the trade at this point I decide a good spot (usually just below the bottom border of the triangle) and let that be my back up parachute. Then I hope for the best. If the break out happens to the upside I get profit and if it drops my stop trips and Im out til the next time. Either way I maximize my gains while minimizing my losses with this strategy. Even if I lose 50% of my trades I dont lose much. 5% or 10% loss is much better than the possible alternative of a possible 25% or even 50% loss we all know Bitcoin is capable of. I walk my stop loss up to lock in profit so that way I can keep the trade going and maximize the potential profit. This is all well documented in my course.
I see a possible break out from this consolidation we have been witnessing soon. I know you bulls will all be disappointed if we break down and for your sake I hope we do keep the bull run going. I also know a new president is being sworn in today so set a stop loss. You just never know when extenuating circumstance can take an effect on the charts. Im not expecting to big of a move but remember WTFDIK? We have the prospect of one or many more possible 2k stimulus packages on the horizon. This could absolutely be a boon for Bitcoin. Of course we will have to play it by ear. Not by fear... I think we will see the break out in the next few days so prepare yourself. I hope you all enjoy your Wednesday. Make good choices folks! And always remember WTFDIK???
TLDR: Little lesson on MA (moving averages) and quick analysis. We should break from this huge triangle in the next few days. So be ready!
First thing I want to do is mention the fact we lost the support of the 4hr 50 MA (orange line). What is an MA first of all? Well its a "moving average" Which is basically a representation of the last 50 candles in the form of a line on the chart. The 50 MA is known for a few things. It can become support or resistance depending on where the candles are. Pretty simple indicator. But there is a bit more. When the candles are above the 50 MA its considered bullish while the opposite is true when we are below the indicator. You can also use the 50 MA in unison with the 200 MA for instance as well and if the 50 MA is above the 200 MA things are generally bullish while if the 50 MA is below the 200 MA its considered bearish. Pretty simple yet quite effective.
So like I said we lost the support of the 50 MA on the 4hr (orange line) while at the same time losing the clouds support. 2 bearish events at the same time. That may account for the drop we are seeing over the last few hours. We seem to be respecting the borders of the big triangle we are still inside of. We should know the direction of the breakout within the next few days I imagine. If we remain below the 50 MA and the cloud on the 4hr things may not go well for the bulls. No sweat though. If it drops I buy more. If it rises I get profit. Either way I win.
If you want to trade make sure you exercise risk management by setting a stop loss. Dont be a hero. Just set the stop loss. The results of not doing so can be devastating to your portfolio. That is how I play these triangles. I mean nobody is clairvoyant therefore I need to plan my trades accordingly. If I enter the trade at this point I decide a good spot (usually just below the bottom border of the triangle) and let that be my back up parachute. Then I hope for the best. If the break out happens to the upside I get profit and if it drops my stop trips and Im out til the next time. Either way I maximize my gains while minimizing my losses with this strategy. Even if I lose 50% of my trades I dont lose much. 5% or 10% loss is much better than the possible alternative of a possible 25% or even 50% loss we all know Bitcoin is capable of. I walk my stop loss up to lock in profit so that way I can keep the trade going and maximize the potential profit. This is all well documented in my course.
I see a possible break out from this consolidation we have been witnessing soon. I know you bulls will all be disappointed if we break down and for your sake I hope we do keep the bull run going. I also know a new president is being sworn in today so set a stop loss. You just never know when extenuating circumstance can take an effect on the charts. Im not expecting to big of a move but remember WTFDIK? We have the prospect of one or many more possible 2k stimulus packages on the horizon. This could absolutely be a boon for Bitcoin. Of course we will have to play it by ear. Not by fear... I think we will see the break out in the next few days so prepare yourself. I hope you all enjoy your Wednesday. Make good choices folks! And always remember WTFDIK???
TLDR: Little lesson on MA (moving averages) and quick analysis. We should break from this huge triangle in the next few days. So be ready!