Hi Sir @cryptographic,
First this is not a short term trade though there is a shorter term aspect to the overall strategy. This is an overview of the more in depth article just posted.
Second on S.C. we separate the trades as aggressive or conservative. This is so you can choose the trades based on risk profile. Obviously the more aggressive the trade the more likely it is to fail. I'm looking for a more conservative positional trade here not an aggressive one. This is with the final 1/3 of the money allocated toward this position.
BTC: I added two minor resistance levels at 8289 and 8515 and an add order much lower which I will explain.
7800 is not the actual level that is significant from a Fibonacci standpoint. The actual extension is 7783 and the retrace is 7833. Psychologically its 7800 which is the reason we looked at this number as well as it is close to the mean of the main levels. If you notice I have 7806 on the chart. This is because everyone and there brother, has this level pegged on the chart at this point. I want to stay ahead of the herd not behind.
Note the initial leg terminated at 7925 slightly above both these levels. Actually slightly above 1% of the 0.618 retrace of the overall bullish move. I guess there are others trying to jump in as a first mover. This provides insight to market sentiment as we posted yesterday on S.C. where the article was focused on market sentiment and psychology. Simply buyers are looking to jump in. A break down of 8k would have signaled weakness but this is not what happened. In addition we have traded in a very tight range over the past 12 hours. Normally weak markets gives way quick and that is not what is happening here.
Its Saturday and like many Southerners I decided to go fishing, entering an order at just above a significant extension level at 6620. This is to try and catch a fat grouper. This is one of the third positions I have allocated not a new one. Hits it hits it doesn't no harm no foul. This is a big fish play as I explained in my fishing article.
Other than a fat grouper, I am looking for a retest of the previous 7925 low or a slight extension towards 7806 for a reversal. Now my If / Then statement.
IF we do NOT retest the low before moving higher, the 8515 level is an area to look for a reversal, then a retest of the low. We can not discount a lower low until the 8515 is broken forming an abc corrective move which I put up there as guide.
IF 8515 is broken we will look for a slight pullback and reversal signal to add. A break of 8515 lessons the probability we move lower and increases the probability the correction is over. When I say break this is not WWE 2.21% wrestling. A tap through is not a break. A break pushes through with momentum and continues or we get a close above on the daily. Please understand the difference and this is subjective to say the least.
Other than this it is still "cloudy with a slight chance of rain". We can simply move lower from here, and though I have adjusted the levels slightly, and a deeper correction is possible, this market appears to want to move higher, as evident from the tight range over the past 12 hours and the quick reversal at the top of the support zone .
