Long Term Update: 3 days chart

chartI’ve decided to buy after a strong breakout of the previous intemediate $548 top. I report here the 3 days chart with the up/down volume ratio finally bullish after more then five months of bearishness, I think this is a very bullish signal for the long term. It is pretty obvious that for a better confirmation we need to move above the $710 top of March ’14.

Looking again the one year VWAP and its deviation lines i think that the next important resistance area will be at $750 where probably sellers will show up again. Now XBT/USD is near the first positive deviation line but i think there is enough fuel to move above $600, in any case there could be a break of $50 from here down to $520-$530 where i’ll probably open a second trade averaging down my position.

Averaging down a position it is often considered a bad mistake but i’ve a different opinion. In books and information about trading all say the same things, that you should never averaging down a losing position, etc… Well they strongly emphasize that money management is a key aspect , they always tell you that it is dumb to average down, to always use stop losses, risk 3% of your account and so on,  it is something like a never ending recycling of bad ideas used by the retail traders that produces the illusion of certainty.

Because 95% of traders always fail you have no choice to do exactly the opposite to succeed ; under some circumstances, averaging down can help you to mitigate the uncertainty of market speculation and allow volatility to produce profits for you without the need to be a guru in divination.

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53 thoughts on “Long Term Update: 3 days chart

  1. Arthur

    “Because 95% of traders always fail you have no choice to do exactly the opposite to succeed”

    Uhu… 🙂

    That’s exactly what I meant a while back when I said here ‘go against the market’. So many traders are victims of FUD, go try stand above it, and use a long term view to make use of the short-term mistakes of many.

  2. DJustin

    I always have a hard time buying on the weekend. Everyone is off. Everyone is active. I’m sure we are in a new bullish period but I will wait a couple days until I buy.

  3. Frank

    Enky, what’s your opinion on the “willy report” regarding the future price zone? The theory looks plausible, contains very solid evidence and it confirms your suspicion if your previous posts about the mtGox price manipulation. It also stated that it seems unlikely that there will be another huge “bubble”, seeing as they were never “real” in the first place. Do you think that the future price development will be more linear if this is true?

    http://willyreport.wordpress.com/

    1. Arthur

      Just read that too, and I was looking for that next important resistance level (thought of ~$900 or ~$1200 myself), which Enky now puts on $750. And that makes a lot of sense, with the Willy Report in mind.

    2. mtgox is gone and i don’t think bitstamp is cheating the volume activity, so far.
      This rally could be genuine.

      1. Elie

        agreed, the past is the past and goxx has already been priced in back several months ago. the proof that Bitcoin can rally alone is that we have a genuine rally going on now and were heading towards the good old 700s. Means this Willy reports does not hold the full facts afterall. Bitcoin and cryptos are here to stay!

  4. vanen

    i’m wondering enky, what do you think of litecoin future? do you think it’ll rise like bitcoin did? just wondering

  5. Although most of the time the price movements is predictable by technical analysis (most trading is predominantly done by trade bots), as we know, Bitcoin big swings are totally news driven. I am afraid what Bobby Lee (BTC China’s CEO) said several times already – big movements in each direction is not what Chinese authorities like, it was confirmed by a joint statement made by Huobi and OKCoin as well, so, I expect us to hear from PBOC around Thursday and go back below $500 in a jiffy.

      1. FJ

        What more can PBOC say? Personally I belive the avarage bitcoiner is so tiered of being screwed by the chinese that he has stopped caring. Thu the buying. The US dollar is on its way to inferis and even the amrican citixzen with a house om wheels know it. Put your USD 400 in BTC and they will be safe. Same goes for the millions og mexicans who will be sending pesos home every month. And the Philliphines as the whatever…Mao is dead and well buried.

      2. B. Mums

        IMHO, most people are lemmings, and people can be extremely stupid…Don’t underestimate them. 🙂

    1. the market is completely on bullish rocket. alone the crazy swap prices indicating at least 30 % up besides macd, rsi (weekly) and volume. what can come on thursday is a classical bear trap, bull flag.

      good luck and good business, i do hope you trade your idea to proof it.

      1. Arthur

        “what can come on thursday is a classical bear trap, bull flag.”

        Looks like it’s happening as we speak. From 595 back to 550 currently. I’m still learning about those things in a bullish market, so I kinda purposely missed this opportunity. What is the idea behind such ‘classical bear trap’, what reasons/feelings do traders have to jump into this trap? Just curious, thanks for answering!

      2. Elie

        Another reason not to use Bitfinex, during the bear trap this morning Bitfinex website crashed for a good half an hour or so.

    2. Arthur

      My next trade will most probably be around 740-750, after I went back 100% in coins in the 440’s. I’m thinking of selling 1/3 and using the $ to buy back at 660-675, expecting a correction of 10-15%.

      Not sure if China can still move the market to that magnitude.

      1. Elie

        thinking the same thing too. will definitely sell my all coins at 740+- and put buy backs lower around 660 if not a little bit lower too. will see 😉

      2. Andre

        We are at 565, guys …. and Enky predicted 520-530 would be the next stop before heading up again.
        You might be a little ahead of your trades 🙂 but I am sure there are a few people who will join you …. ME for example !!
        Hope it all works out 🙂

      3. Arthur

        lol, you’re right Andre! However I don’t consider myself a daytrader anymore, but more a week/month trader looking for the bigger spikes >10%. And this is the first time I’m starting to trade in a bullish period, meaning I’m treading carefully, and learning down the road.

        Never heard of this ‘bear trap’ phenomenon before, while both bcmine and Enky predicted it. Hopefully someone can explain a bit why this is happening, so I can see/feel it next time too, and maybe try a little trade myself.

        And I can ‘see’ what’s happening in the 740-750 zone with Enky’s graph, that’s why I’m planning a trade there already… 🙂

    3. however, bitcoin market is more easy to predict as forex. reasons for that is simpe that the market is tinny. just imagine goldsucks and 15 others whales working on a strategy too make heavelly money and then playing it on the forex market. there will be alot of different sinus waves hidden in the price, what is difficult to read technically. the news factor i dont trust, everyone is better to rely on fibbos and volume analysis.

      bullflag defintion is easy to google. in one sentance: people cashing up after a rise and grabbing for low hanging fruits.

      now we broke the downtrend channel. when we enter the down trendchannel (520) we will see a short term downtrend again, but with a positive volume and not falling price this volatility can be used to break into 680 – 750, where the price can stabilise from the triangle of death. the chance is 60:40. (i would personally not daytrade this pattern without monitoring the price 12 hours a day.) thanks for reading and commenting!

      1. Arthur

        Yeah, that’s how I interpret your recent info, bcmine. We currently have a combination of a bear trap (short sellers forced to take a loss) and a bull flag (a sharp, strong volume rally on a positive fundamental development, several days of sideways to lower price action on much weaker volume, followed by a second, sharp rally to new highs on strong volume).

        Thank you lots for keeping us updated with these things, bcmine! This is all new to me, and I’m learning LOTS!

        My opinion: it looks like the momentum is being build up for the second rally of the bull flag, and it might be starting anytime soon (today or tomorrow?), and my guts feeling also says we might not see the 520’s anymore. So I’ve decided to buy back in again with a tiny, tiny loss on a little trade I tried. That’s the price of learning… 🙂

  6. Arthur

    From Nasdaq website, bear trap:

    “The predicament facing short sellers when a bear market reverses its trend and becomes bullish. The assets continue to sell in anticipation of further declines in price, and short sellers then are forced to cover at higher prices.”

    Right… I think I understand that. With a drop to 550 only and a rather fast return to the 580’s, I think it’s about time to enter the 600’s today or tomorrow. No more BS, let’s rock ‘n’ roll! 🙂

    1. Andre

      Got it, I think. So no drop to 520 – 530…. But a big run towards 600 and maybe higher. Unless there is some news tomorrow causing a little downward spike.
      See what will happen over the next couple of days! Probably nothing.

    2. Arthur

      Yeah, and maybe they come in a few batches, these short sellers, until all of them have gone. Lots of these short bets will have a deadline end of month I guess, so maybe we’ll see some 520-530 dips in a few days after all…

      1. Elie

        I decided to sell 50% of my stach and put orders at 580 and 585. We need to dip as Enky said before heading up past 600. We dont have enough volume “so far”. I do hope that tonight we dont get the volume lool then I would have made a bad move. oh well

      2. Arthur

        Not sure how much profit you’re making at 580 and 585, Elie…? Or did you mean 520 and 525, maybe? Or is it sell orders? Just curious…

        And yeah, now that I can see a bit what’s going on, I also decided earlier today to sell a little (15%, to be precise) and trying to grab the XBT back at 525.

      3. Elie

        woups sorry lol meant 520 and 530. I have been trading in Canadian dollar at VOS got confused

    1. Arthur

      That was good news indeed. Not sure anymore if we will see another dip after we had this 595-550 dip already a few days ago, so I went back 100% in XBT. At least I’m prepared now for the second rally of the bull flag… Tiny loss on that little trade, but it’s OK. As I said, that’s the price of learning lol!

    2. Arthur

      And with the 590’s back on my screen, it looks like the bull run has just continued its stampede…

      1. Elie

        I think we were still going to see 530 since we were heading slowly down till this morning, but looks like a whale just changed the course of everything in few second. Lets see if it holds and the whale keeps buying constantly in order to breaki the 600s.

      1. Arthur

        Thanks Enky. To be honest, I’m rather surprised to see the speed of things happening since we were on 450, which was only 10 days ago. I really had thought the bullish period would only start in June… This looks promising for the rest of the year though, so can’t complain. 🙂

      2. Elie

        looks like it indeed, the two walls at 593 and 595 were eaten slowly and now we should be able to head upwards past 600 during the day.
        Lost 0.1BTC during my attempt but not a big deal, had to take the risk.
        Next sells put at 740 and 750 already 😉

      3. Arthur

        Yeah, Bitfinex already broke 610, and normally Bitstamp (my home for trading) and Bitfinex are VERY close to each other. As you Elie, my next trades will also be in the 740-750 range. For now we can sit back and enjoy things…

      1. etb

        Yeah! Finally,I’ve found out that was sierrachart. Thanks . I found btc-e data also available in sierrachart. What’s the advance of using mt4 for analyse btce data? It’s sad that sierrachart does not support huobi.

  7. Elie

    China woke up and they hit 460-470 already but Stamp and other exchanges did not follow yet. The volatility is back it is going to be very interesting. I missed those days though 🙂 we might see 700 and 750 in few hours like the good old days.

    1. Elie

      Correction: meant 660-670.

      now the question would be if we will get past 710 as Enky said to confirm our way in the bullish market or not. I might put my sell at 710 and see how the volume and buyers are at that point. It is going to be very tough to predict the outcome. We might not see 750 too. Pretty tricky.

    1. Arthur

      It went up from 611 to 683 on Bitstamp, can’t blame traders taking their profits. Looks like it’s stabilizing around 650…

    2. Arthur

      And I stand corrected it’s hitting the 620’s on Bitstamp too. This would have been the 10% correction I was looking for for a trade, but I missed it completely. Ah well…

      1. Elie

        I was lucky Arthur, that was my first successful trade in a long while, I was watching to see if 680 would hold and it did not then I saw a bearish whale going downhill insanely then I knew we were going down like the volatile good old days, sold at 675 and bought back early at 640 as I did not know if we would go lower. I made few fraction of a profit not bad. Now I am back in all BTC and LTC and PPC. Waiting for the 700s. I think we will see the same thing happening at 710 OR 750.

      2. B. Mums

        I’ve been spending the last 3 weekends building a fence and garden. I missed it as well, I know the feeling. It’s just… Ugh! lol

  8. Amit

    Hi Elie

    What do you think about litecoins, is it a good time to buy them for the long term?
    i can see that they didnt keep with bitcoins runing yet…

    1. Elie

      well IMO Litecoin takes several weeks to bubble / rally up after Bitcoin initially bubbles/rallies up (usually when Bitcoin rallies and stablizes around 700-800 all other altcoins rally after that as people cashout from Bitcoin and invest in other cryptos to earn more money). I think this week LTC will rally 30% upwards at least to the surprise of everyone and hit $15.But thats my broad prediction but take my advice at your risk – I am not a professional trader 🙂 . Now if another week passes and I see Litecoin losing marketcap and going below 300million cap I will sell out (I doubt that will happen though).

  9. confirmation of the bullish trend

    shortterm inverse hammer with top 680.
    price above 580 – 620 in a short term would mean stil too much fresh money entering the market what indicates higher prices.

    so where is the next stop? how much money wil be used for speculation to drive the price up? logical would be to say, that it will be more as it was in december. midterm goal 1300. but bitfinix swap prices are very high, too high. without fresh money entering into dollar we could see a soon end of the rally. however that should be not a problem at all.

    1. Elie

      ur forgetting that fresh money will be coming in in Q2 in few weeks from Second Market and other Forex or Trading firms. Also the fact that DISH and other companies are going to start accepting Bitcoin and other good news will bring fresh investors on board. Do not forget that the traders who were part of the December bubble are still most likely watching the market. I say there is still 6 Billions out there waiting to be invested in Bitcoin. (December 2013 market cap was 14-15Billion I think if not more)

    2. Arthur

      “so where is the next stop? how much money wil be used for speculation to drive the price up? logical would be to say, that it will be more as it was in december. midterm goal 1300.”

      I have given that a thought too, but I was thinking 1500-2000 range somewhere in August. Just a guts feeling though. But then we are at least back on track for a long term bullish trend, I think.

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