ETHUSD: Avoid The Middle. Looking For Fake Out.

2018年7月28日

ETHUSD update: Price is consolidating around the 464 level as this market is pulled back and forth by the indecisive BTC market. Symmetrical triangles are tricky formations since the closer to the middle price gyrates, the more random it is. The best thing to do in a situation like this is wait it out which is not what the crowd wants to hear.

Earlier on S.C., I wrote about patience and how being flat is also a position. It is far from glamorous, but market timing is mostly about waiting. The typical strategy for a triangle is to buy or sell the break out. So we look to do the opposite.

We do not short these markets. If you were watching the short squeeze earlier today in BTC, you may now have an idea as to why. At S.C., if we want to short something we look at the forex markets which are much more stable and mature.

This makes our objective simple. Wait for the next long setup. Even though triangles are known to be continuation patterns, they are also known for their failed breakouts. And that is what we are looking to capitalize on.

Any significant retrace is going to shake a lot of weak hands and that is where we look to buy, not the resistance breakout. I wrote a report earlier on S.C. that covered the specific levels that we are watching.

In summary, patience is what leads to consistency over the long term. High probability setups are more than a candle stick formation. They also account for the underlying formation and the context of the price location. These are factors that are often overlooked, especially by less experienced traders who put too much weight on oscillators.

Tired of missing out? How about accumulating inventory when the market is hated like it was just a couple of weeks ago? Short term trading is not just all in, all out, all your capital, in one trade and hope for the home run. Allocating capital across multiple strategies and time frames helps to capture moves that are otherwise tough to trade into. This requires organization and a plan, but it doesn't have to be complicated.

There are basic elements of timing markets that you don't hear about. Things like having a specific procedure not just for entering and exiting a market but for your analytical process as well. If it sounds like too much, then begin with a broader investing strategy which helps develop a better foundation for perspective. Small time frames like the 1 hour or less requires a ton of experience to utilize properly. And I mention this because many traders get caught up in the confusion. Just something to consider.