ETHUSD Perspective And Levels: Breakout Requires Followthrough.

2017年9月27日

ETHUSD Update: Breakout attempt at 300 happening as I write this. Price needs to push above 312 to signify a successful bullish breakout. If this market can mount that kind of rally, then the next retrace should offer a reasonable buying opportunity for a swing trade.

Price action has been slow around the 300 level if you are waiting for a swing trade. Sure if you are day trading, there are frequent opportunities to go long and short in this environment, but I am not writing about that. The slow breakout is still suspect, and still has plenty of opportunity to fail, which is why I will not open any swing trades at these levels. My trading plan is very well defined and is focused on minimizing risk, and it prevents me from taking any new positions at this time.

What will be interesting is if price can push its way above 312. A close above this price will provide some new information about the underlying strength of this market. It would be a clear higher high which signifies that the longer term trend (which has been bullish this whole time) is beginning to assert itself again. In this scenario, I will be prepared to take the next long signal for a swing trade which means the market will have to retrace to a new higher low support. The 280s and 290s would make sense because they have been a tough resistance, which in the new bullish scenario, should act as a new support (inversion).

What many less experienced participants do not realize is that double tops are not always precise. The second high may go slightly higher than the first, and then fail. That is still considered a double top and also why 312 is so significant in terms of showing follow through,

If price fails from this level, the next support I am watching is the 269 to 260 area which is an overlap of the .382 of the entire bullish structure (from 198 low) and the .618 of the recent bullish swing. Great place for a reversal because if a higher low forms in that area, it implies continued strength and that is a condition that I am willing to put on a trade if the price action makes sense at the time.

In summary, this market has built some bullish structure, and now it must prove that it has enough momentum to continue higher. As I have written about before, the 300 level is a make or break area and the market chooses which way it goes not you or me. As price action traders, we are identifying clues and waiting until factors line up for a trade that offers attractive reward relative to the risk taken. I am not trading these coins to make 5 points here and 5 points there. There is nothing wrong with that as long as you have the time to be in front of your computer. For people who do not understand my swing trade strategy, I am looking for broader moves without taking a large amount of risk and in order to do that, I have to wait until factors line up based on the criteria of my plan. It may not get me into every movement, but it also keeps me out of tons of noise which helps me to preserve my capital and my sanity in the long run.

Comments and questions welcome.