Apr 2nd 2019, Crypto Chartbook

Measuring Strength

When do moves get faded? Is a move valid? Are retracements to be expected? Can I still wait for an entry? How far will this retracement go? These are typical questions market participants constantly ask themselves. But what are the answers? Let’s use the recent behavior of Bitcoin to illustrate some principles and measuring strength of the recent moves.

The 60-min chart below is a prime examples of a low risk entry. With a wide double bottom coupled with action/reaction, a long entry fade provided the lowest risk entry prior to the beginning of the creeping market. However, why are these lower risk setups rarely to be found as of late? The answer: with an advancing upward creep over the last 9 weeks, the market rarely retouches significant lows as its steady, staircase-like advancement continues.

Last week’s 60 Minute trade with low risk entry:

BTCUSDT 60 min chart as of April 2nd, 2019

BTCUSDT 60 min chart as of April 2nd, 2019

Compare this current creepy market to the three thrust moves we had in mid-February. Notice by the third leg up the market is overdone and exhausted, having moved too fast too soon into larger timeframe resistance. But now, in contrast, we have a steady slow up-creep with every downside move quickly exhausted by the buyers (as evidenced by the downside wicks) indicating strength now coming into this tripple top.

Daily chart – thrust versus creep:

BTCUSDT daily chart as of April 2nd, 2019

BTCUSDT daily chart as of April 2nd, 2019

While the mass media remains silent, BTC continues its slowly advancing upward creep. The weekly chart below illustrates this upward motion, and telling are the little – if any – retracements, indicating a lack of anything to fade short, as shallow extensions of the mean reduce the chance of executing on action/reaction principles. Rather, the market continues in upward motion, and just as an object in motion tends to stay in motion (Newton’s Law), so does a creeping market.

Weekly creep up:

BTCUSDT weekly chart as of April 2nd, 2019

BTCUSDT weekly chart as of April 2nd, 2019

This does not mean that we can not have responses at higher time frame resistance, but rather where does the high odds play reside. In fading a strongly upward creep? Most likely, not.

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About the Author:

Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent.Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.


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