MarcPMarkets

BTCUSD: Fear At Lows Same As Greed At Highs. Stick To Plan.

BITFINEX:BTCUSD   Bitcoin / Dollar
BTCUSD             update: New low of 6K reached as these markets go into the Senate hearings today. From a technical perspective, price is in the middle of the largest support zone of this market without any supportive structure in sight. In this report I will review what this market has to show in order to confirm stability and more importantly how to manage emotions during extreme conditions.

The 8171 to 4983 is the largest magnitude .618 support zone for this market. This is also the area that offers the greatest probability as far as a general market reversal is concerned, the question is how do you position yourself for it?

With the kind of momentum that is driving price, the best thing to do in my opinion is to wait for larger formations to unfold over time before continuing to build longer time horizon positions.

Often, the first leg of a major reversal is extremely sharp, which needs to be followed by a shallow pullback and then break of a previous peak. In other instances, this market has been forming the attempt at a reversal, but no previous peaks have been taken out.

Buying into lows like the kind apparent at the moment offers great prices, but as you can see the risk is usually high so this type of positioning is aggressive. While waiting for a solid reversal formation over time will require a ton of patience. Patience means watching price spike higher quickly and then waiting a number of days for it to prove that it has found strength by retracing to a higher low, then going higher and taking out a previous resistance. A key level to watch to help confirm that momentum has changed to bullish on the short term, is a close above 8427 which is the .382 resistance of the current bearish swing. That level serves as the target for the initial reversal swing.

I look to incorporate both situations into my strategy which means there is pain involved. I do not mind being aggressive as long as I temper that buying with careful sizing. The worst thing you can do at this point is flip and become a bear in an area where price has a greater chance of reversing. This is a buy or stay out type of situation, it all depends on how much you are willing to risk.

In summary, all strategy aside, the most important thing you can do in a situation like this is stay focused and follow your plan. If you have lost a lot more than you imagined, the best thing you can do is turn that loss into a lesson and gain experience from it, otherwise it is a complete loss. Trading is not a game of matching wits, intelligence or "being right", it is a game of controlling risk. Losing, no matter how uncomfortable it is, is just as much a part of the game as winning and we either embrace it and turn it into experience, or we can give up and let it win. Being fearful at lows is no different than being euphoric at highs. Just like I wrote back in December, markets do not move in a straight line and the same applies here as well. Extreme conditions offer opportunities for those willing to accept the risk.

Questions and comments welcome.
Marc Principato |Author: Analyze Any Financial Market Like The Pros Using Price Action| http://www.Priceactiontraders.net | Cofounder http://www.seekingcryptos.com (S.C.)
I learn so much, just by reading your reports ! Brilliant stuff @MarcPMarkets
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Thanks! Your posts offer so much to the attentive reader. Three nuggets of gold for me:
1. "The most important thing you can do in a situation like this is stay focused and follow your plan." This is always true regardless of what the market does. It's hard enough to predict what it does next, so you better know your move when the market has made its move.
2. "If you have lost a lot more than you imagined, the best thing you can do is turn that loss into a lesson and gain experience from it, otherwise it is a complete loss." No comments needed!
3. "Trading is not a game of matching wits, intelligence or "being right", it is a game of controlling risk." Yes, if you do not preserve your capital, it's game over. Rist comes first!
Thanks again, @MarcPMarkets!
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Is that right BTC still on downtrend??
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Or you just HODL as an investor and let this be over within this year :)
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stell_s1 raghavgrover013
@raghavgrover013, It is not a bad option to hodl. Just Marc is expert on more short term trading strategies.
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@stell_s1, yeah , he really is and being new to this market with one year exp i have done some trades but really trading is easy when marking is bullish and trading is very difficult during these corrections if you're careful and you can get caught on the wrong side. Anyways i still draw fib patterns try to figure out scenarios and when to get in and get out but it seems a lot of work and you need to be on the computer if you open a position which is so time consuming as i have a work job. To avoid all that mess , its better to hodl for me as i know ( whatever people might say ) we go to trillion or more market cap this year and this is once in a life time buying opportunity.
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I think this drop is relief for bitcoin. ist much easier and safe to run btc upward from current level then from 20-30k. I remember when exchanges stopped accepting new comers as they say becouse of the limits on trading platform to handle too many user. so new people entering crypto field were pushing the price up it was right before riching the top. So the idia is that this market is being manipulated and crypto plan is pump and damp safely with maximum returns and media news is a circus with clowns. enjoy trading my friends
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thank you for taking your time to be as polite and informative as you are. very professional and wise.
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It's hard to believe it rose and dropped so fast... it's surreal
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Great article, thanks for sharing.

I enjoyed every single bit of it and learned a lot from this incredibly talented Trading View member. Thanks again for sharing this information.
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