Difficult market? Two important price action concepts help!
Diupdate
BTC has moved sideways now for some time, prices swinging up and down. A lot of choppy behavior with several tricky moves.
There are two important "secret" concepts that can help you find entries in nearly every market condition.
By having these skills you can often avoid having the market confuse or trap you!
Concept A): After the break of a trendline, there will be one or two legs to a new low/high.
Why is that working? It just traps people who entered after the break, looking for a reversal.
When a new high/low occurs they might get stopped out and think the trend continues, just when the real trend reversal begins!
Additionally other traders enter when prices brake out to a new high and low, only to see prices reverse. Now they are trapped to the wrong side.
Concept B): Second entries. This is just two pushes (two legs) against the trend direction.
When prices pullback in two legs and then make a second attempt to go in trend direction it is a second entry.
Why do these work so well? In an uptrend people see a lower high, then a lower low. Now many think bearish and suspect a reversal, the beginning of a new downtrend. New shorts also come in, hoping to catch a new downtrend early. Of course then the uptrend continues, hitting stops of shorts. Also skilled traders go long, driving prices further up.
These two vital concepts require some experience, but you can find such entries constantly, because trends also occur inside broader ranges/channels as we can see in the Bitcoin chart.
I have numbered 5 entries which can be based on these concepts + other clues:
Trade 1: Short -> Concept A + bulltrap
Trade 2: Long -> Concept A +B + retest support from breakout
Trade 3: Short -> Concept A + pullback to EMA + trend channel test expected
Trade 4: Long -> Concept A + B + successful retest of uptrend channel
Trade 5: Long -> Concept A + B + pullback to EMA + retest support from breakout
What is happening right now?
We have seen a strong breakout and two legs up. Prices have also overshot the broader trend channel!
Now it looks like a new steeper two tiered channel is in play (with a midline).
We are trading at the upper end of this channel, so maybe BTC will retrace to 9500 again, but do not look for short entries in such a strong trend!
Feel free to comment or ask questions! Or just follow me ;)
There are two important "secret" concepts that can help you find entries in nearly every market condition.
By having these skills you can often avoid having the market confuse or trap you!
Concept A): After the break of a trendline, there will be one or two legs to a new low/high.
Why is that working? It just traps people who entered after the break, looking for a reversal.
When a new high/low occurs they might get stopped out and think the trend continues, just when the real trend reversal begins!
Additionally other traders enter when prices brake out to a new high and low, only to see prices reverse. Now they are trapped to the wrong side.
Concept B): Second entries. This is just two pushes (two legs) against the trend direction.
When prices pullback in two legs and then make a second attempt to go in trend direction it is a second entry.
Why do these work so well? In an uptrend people see a lower high, then a lower low. Now many think bearish and suspect a reversal, the beginning of a new downtrend. New shorts also come in, hoping to catch a new downtrend early. Of course then the uptrend continues, hitting stops of shorts. Also skilled traders go long, driving prices further up.
These two vital concepts require some experience, but you can find such entries constantly, because trends also occur inside broader ranges/channels as we can see in the Bitcoin chart.
I have numbered 5 entries which can be based on these concepts + other clues:
Trade 1: Short -> Concept A + bulltrap
Trade 2: Long -> Concept A +B + retest support from breakout
Trade 3: Short -> Concept A + pullback to EMA + trend channel test expected
Trade 4: Long -> Concept A + B + successful retest of uptrend channel
Trade 5: Long -> Concept A + B + pullback to EMA + retest support from breakout
What is happening right now?
We have seen a strong breakout and two legs up. Prices have also overshot the broader trend channel!
Now it looks like a new steeper two tiered channel is in play (with a midline).
We are trading at the upper end of this channel, so maybe BTC will retrace to 9500 again, but do not look for short entries in such a strong trend!
Feel free to comment or ask questions! Or just follow me ;)
Catatan
I had 2 scenarios earlier (also see comments).At the circled green candle I decided that scenario 1 is in play. Another second entry ;)
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