Apr 9th 2019, Crypto Chartbook

Pullback Opportunity?

Shortly after our last weekly chartbook’s warning not to short the weekly resistance zone, we had the breakout into the weekly gap suction above $4,200 BTC/USDT. If you didn’t catch the initial thrust move, there is still pullback opportunity.

Even with the initial strength of the first move, the larger time frame shorts are still in jeopardy, as many stops were taken out along the way, driving prices even higher (gap suction principle).

Weekly gap suction:

BTCUSDT weekly chart as of April 9th, 2019

BTCUSDT weekly chart as of April 9th, 2019

After the creep up, we had the thrust up. As much as candle stick formations with double top at the $5200 zone would suggest for possible short entries, we refrain on entering those. This based on  the weekly gap suction principle. Also in conjunction with the rule to “never fade a strong directional market”.

Regardless of whether you are participating in this move or not, fading the direction of the trend is counterproductive.

So no shorts:

BTCUSDT daily chart as of April 9th, 2019 a

BTCUSDT daily chart as of April 9th, 2019 a

So, where to get in? The next pullback opportunity

With a move that has already occurred, where could one still find excellent risk-reward ratios? After all, the potential for gap suction with many stops being taken out is probable. Therefore, fading a pullback in the direction of the trend may provide for such an opportunity.

No one has a crystal ball. A trader must be primed for when the market is indicating a higher than likely potential for trending conditions. A larger time frame gap close, in conjunction with the recent market structure (break from multi-week highs) is indicative of directional markets.  The trend is your friend.

A pullback in this market could manifest in a number of ways. Either a one or multi day price decline, followed by a reversal pattern, would warrant for possible long entries thereafter.

Daily chart – one to multi day price decline followed by reversal:

BTCUSDT daily chart as of April 9th, 2019 b

BTCUSDT daily chart as of April 9th, 2019 b

That said, sensible long exit targets could be found at the 5,687 to 5,947 zone.

While the retail crowd is focused on lower time frame resistance, weekly and monthly market participants see prices going even higher.

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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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