BTCUSD: 6K Or Squeeze? Waiting For Market To Choose.

12 Sep 2018

Bitcoin update: Price consolidation presents a tricky situation. It is sitting above an important psychological support which makes it more attractive to buy, but the structure itself qualifies as a bearish continuation pattern. This conflicting information is a perfect example of when avoid a market.

At S.C., we do not take trades for the sake of taking trades. We do not force trades, make up trades or issue trades to appease the impatience of our followers. We simply listen to the market and if it says "do not trade", we don't.

Making a couple of profitable trades only to give it all back and then some is not productive. And since conditions do not offer any distinct advantages, more trades increase the chances of more losses. This goes for both longs and shorts.

Speaking of shorts, we do not participate on the short side in a traditional sense. We do have a technique that allows us to increase our coin count during adverse movements without the additional risks such as leverage and exchange intervention. We recently demonstrated this for our members with our BCH inventory.

Looking ahead, in order for us to put any new capital to work, price needs to show improved structure. This can unfold in a number of ways that would be meaningful from our perspective. One way would be to probe below 6K followed by a bullish reversal candle. This is a typical bear trap that offers a high probability setup for a long swing trade.

In summary, we do not react to market information. We evaluate and anticipate, which is on the opposite side of the spectrum compared to the reactive trader. Our decisions are organized by probabilities and market structure, not overly complicated charts.

Price action and market structure serve as a traffic light for our operations. When it's green we go, yellow we start raising defenses and red we avoid. Right now the market is showing us the red light.

Inexperienced traders focus on profits, not risk. They want action, they feel they are losing when the market moves without them. They do not appreciate that the absence of losses is a big contributor to a profitable long term performance. During unfavorable periods, protecting capital is more important than putting it to work. There is a time to be aggressive, and there is also a time to play strong defense. Knowing the difference is what separates the true professionals. Which side are you on?

13 Sep 2018

Catatan

Quick update: Price has taken out the minor consolidation trend line but has not proven anything from our perspective. Price can go as high as 6600 and fake out. Participating in the initial move in situations like this is often the most costly since the environment is still unfavorable. We are continuing to wait for the market to meet our criteria, until then we wait. We are only interested in high probability setups, not just any movement.