Time to trade ETH NOW. BTC on sidelines

tweet july 15

My tweet from about 5:30 this morning

Friday July 15, 2016  5:45 AM

Tl:dr I’ve already made significant moves in my ETH position and today will be a key day for my ETH trading strategy. Here are the details

My blog post title from yesterday is a great place to start:

ETH Running out of time BTC coiling

When a time cycle gets too long, as a trader it means to have an incredibly open mind and error to the side of being defensive. Here’s what the patterns say is happening now:

If you look at ETH longer term (days), the patterns show a strong probability of more upside with my $15+ target very much in sight.

But then I looked at the bigger ETH picture:

  • This morning as I scan the charts, the shorter-term patterns (hours) show a much higher probability of downside with a target in the 11 range (trading around $12 as I write this).
  • I also learned ETH is moving forward with its hard fork with a key date set for July 20. This is likely to create a lot of volatility over the next week or two.
  • And, as I tweeted yesterday  ETH needs to close today with a high above yesterday’s high or the entire upside pattern is in jeopardy. If we end the day at the short term target of $11, that would be well below yesterday’s high of $11.71.

I don’t want to be 50% long if that happens as the probability for upside to $15 on this move goes down significantly. Make sense?

SO – I immediately sold half my position at around $12 (sold in blocks, some above 12, some below). ETH is currently trading much higher (around $12.20). Should I have waited to see how much more I could make? No way. I can’t guess every move up or down. When a high probability pattern says sell, I sell, win or lose.

In this case, selling at $12 gave me a 15% gain in about a week. ETH could go straight to the moon from here – if it does, I missed out, but I still made money (a 15% return in a week!)

IMPORTANT: I would much rather make 15% gain than hope for 50+% gain and wind up with a 15-50% loss!

If I follow the patterns and base my trading decisions on the highest probabilities— I make money more often than not.

Does all this mean ETH is about to tank? No. As I said, the longer term patterns are still bullish for ETH which is why I’m staying 25% long here and depending on the patterns at the time we hit around $11, I will seriously consider buying a lot more ETH — at least back up to 50%

BTC Update

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NOTE: NOTHING IN MY POSTS IS INTENDED TO BE TRADING ADVICE.  Please do not base your trades on any information presented in the materials on this blog as it is for information and entertainment purposes only. You are 100% responsible for your own trading decisions. 

 

 

ETH Running out of time BTC coiling

eth chart 7 14

Thursday July 14, 2016

As I outlined in my July 8 post, ETH developed a bullish pattern with a target of $15+. ETH has hovered in a very tight range well over a week with almost no volume.

Today we’ve seen a small improvement in both price and volume. If the current pattern is playing out, this should not be a head fake. If we drop back down towards $10 and lower for more than a day from here, then it’s more likely something else is going on and I’ll likely be adjusting my trading position.

One possible trade strategy is to ramp up my position to 100% or more and have a clear exit strategy more in terms of time than even price (though you have to have your limits!)  Will be watching closely as hard fork dates come and go. If I do any trading like that I’ll update here and/or on twitter.

Patterns are a combination of time and price. While it’s possible for a pattern to extend way beyond its normal time frame, it’s not typical and shouldn’t be ignored. Extended time decreases the probabilities of that pattern’s successfully reaching targets.

That’s where we are today with ETH.

Bitcoin Update

Yawn.

But…

The longer bitcoin doesn’t drop, the lower the probability gets that it will reach the current pattern’s 375-425 range.

NOTE: NOTHING IN MY POSTS IS INTENDED TO BE TRADING ADVICE.  Please do not base your trades on any information presented in the materials on this blog as it is for information and entertainment purposes only. You are 100% responsible for your own trading decisions. 

 

BTC ETH So no one wants to trade?

poker chip pic

Wednesday July 13, 2016 8:00 AM

There’s been little to talk about regarding BTC and ETH this week. Price is trading in a very tight range on volume that suggests everyone is sitting with their stacks, waiting for the other guy to blink.

If you forced me to guess (which has nothing to do with trading), the current patterns look bullish for both BTC and ETH.

However, that would only be a guess.

ETH has its hardfork dates coming up in the next 7-10 days. Maybe that will shake things up a bit. Apparently, everyone has exactly the position they want currently, and, well, there you have it.

Meanwhile I sit here with my stack of 50% long ETH (flat BTC) waiting for the other guy to blink.

Photo credit Ramberto Cumagon

NOTE: NOTHING IN MY POSTS IS INTENDED TO BE TRADING ADVICE.  Please do not base your trades on any information presented in the materials on this blog as it is for information and entertainment purposes only. You are 100% responsible for your own trading decisions. 

 

BTC ETH Charts: Tales from the crypto

btc usd 7 11

BTC/USD 4 Hour Chart – Says BTC is going higher

Monday July 11, 2016  6:15 AM

With a big move likely coming, I check as many charts as possible for clues about timing. This means various time frames (15 minute, 1 hour, daily, etc) as well as different patterns created by different currency pairs (ETH/USD, ETH/BTC, BTC/USD, etc).

Here are two examples that stood out:

BTC/USD 4 Hour Chart – Says BTC is going higher

btc usd 7 11

The pattern shown in this chart says the probability (moderate) is we go higher with target of about 690.  But, other longer term time frames still tell me we will go lower. If the 4 hour pattern correct, it can actually change the patterns on longer time frames so it’s very important in to see how BTC behaves against the USD in the next 24-72 hours on this chart.

ETH/BTC 15 minute chart – Says ETH is going higher

eth in btc chart 7 11

Even though ETH is dropping this morning, the 15 minute chart says the probability is greater that we go higher with a target of .0168 (currently trading at .0160). This upside pattern is confirmed by most longer term charts, but not all. The 4 hour chart shows a slightly greater probability of more downside before any further upside.

Hopefully these examples show how vital it is to define your trading time frame. A day trader could have patterns showing great odds for success going long at the same time a swing trader is correctly building a longer term short position.

My current positions:  BTC  Flat   ETH  50% Long

Full disclosure: I stole the “tales from the crypto” part of the title above. Saw it in a crypto forum–thought it was clever — couldn’t find the post to credit so thanks to whoever came up with it.

NOTE: NOTHING IN MY POSTS IS INTENDED TO BE TRADING ADVICE.  Please do not base your trades on any information presented in the materials on this blog as it is for information and entertainment purposes only. You are 100% responsible for your own trading decisions. 

 

 

 

 

 

 

 

BTC ETH We gon see what we gon see

btc 7 10 2 hour chart

Sunday July 10, 2016  7:00 AM

There was a short burst of volatility about an hour before the BTC halving yesterday when the price plummeted 30-40 dollars in a few minutes. ETH became very active at the same time dropping from 11 down into the 10.60’s.

I took advantage of the drop to buy another block of ETH at 10.78 which has me:

50% of my core position long ETH.

I considered a much larger short term ETH purchase, with some sort of very short term stop loss, with the play being to convert to it to long BTC at much lower prices to take advantage of the currency conversion, but  I needed to see BTC drop straight down fast below $600 (the large spike I wrote about yesterday) to do that. A really huge spike down never materialized.

Right now things are relatively quiet for both BTC and ETH, but the patterns say that’s not likely to last, and the news confirms the patterns. The BTC halving is sure to impact price at some point (patterns say lower, if we get above $707 could go much higher), and ETH still has major issues getting a hard fork implemented to bail out errr….save the DAO. I’ve seen key dates mentioned between July 14, and July 21 fwiw.

My game plan is simple: Wait and see what happens next.

I’m comfortable staying on the sidelines for BTC, frustrated I didn’t buy more ETH at lower prices, happy I have cash ready to act if opportunities arise and have just enough skin in the game with a 50%.long ETH position to feel cautious about adding more.

In other words, I’m right where I want to be.

NOTE: NOTHING IN MY POSTS IS INTENDED TO BE TRADING ADVICE.  Please do not base your trades on any information presented in the materials on this blog as it is for information and entertainment purposes only. You are 100% responsible for your own trading decisions. 

 

 

 

Great BTC ETH Trading = Never “loading up”

eth chart 7 9

Saturday July 9. 2016 7:00 AM

Happy BTC Halving Day! Not expecting fireworks, but not ruling them out either….

I am currently 45% Long ETH with an average price of about $10. First price target is the $15 range. The most recent blocks I’ve purchased have been around $10.75. I expect to be up to 50% invested before weekday trading on Monday.

I wish I were 100% invested in ETH, but I’m confident I’ll make the most money over the long haul because I’m not 100% invested.

Even though I had many chances to go 100% into ETH at $9.75 or even less, I didn’t. Right now, this feels bad – like I’ve “missed the bus” and now will miss out on maximizing profits and/or have to pay far more for ETH just to get a decent sized position.

It might not feel great, but it’s been very successful for me. Here are 3 reasons why:

I never load up.

  1. Anything can happen

I write this every couple of days because it’s the most important thing to remember when I’m trading. There are only probabilities, never certainties. I’ve watched perfect set ups that never fail, fail.

I’ve also found the stronger the set up, the bigger the disaster when it fails. If you’re perfectly disciplined and can somehow succeed trading with tight stops, you won’t get destroyed loading up when your amazing set up fails. I’m not perfectly discipline and cannot succeed with tight stops.

2. Better to wish I was more invested than regret being too invested = Keep dry powder.

This is the kind of trading advice I hate, because I know it’s true but I don’t want to hear it or even think it when I’ve fucked up and am 100% in a position that’s tanking.

Real traders know there’s always another bus you can catch in the near future so it makes little sense to put everything at risk by loading up on any given trade. This is especially true in new markets like cryptocurrency where prices can and do go to zero.

So, while I hate hearing this advice, I know it’s vital to my long term success as a trader to keep dry powder for “spike” moves (see #3 below) and it’s how I am okay being 50% invested when I wish I were 100%.

3. They love to spike price before big moves the other way

I’ve noted in prior posts I’ve been looking for a spike down to $5 on ETH where I’d love to get 100% invested. This spike hasn’t happened and I now see bullish signs that could take ETH to $15. I have an intermediate/long term target of $36. Should I stay out of ETH entirely until I see the spike down designed to “scare everyone out” or be a “stop run” I’ve often seen?

That’s certainly a safer approach than scaling in at higher prices but it also can crush you as you try to time a specific event which is a low risk trade but damn near impossible to know when it will happen and provides zero return if it doesn’t or worse, you miss it.

I try to define my trading game plan before I start. In the case of cryptocurrency I’m a swing trader, not a day trader. I want to have cash available for huge spikes, but it’s more important to me to make good returns on big moves over longer time frames than it is to make every nickel waiting for huge spikes. My money management plan is to buy 5-10% blocks to build a position when I see buying signals in the patterns and indicators.

One more thing about spikes in price: The fact is ETH had a strong spike down on to $7 on DAO news a month or so ago.  There was my big spike–did I buy? HELL NO!  I was thrilled to be mostly out of ETH at that point.

More recently on July 5 after serveral down days there was another spike down below my first downside target of $10. There may not be another spike down for weeks, months, or ever.

NOTE: NOTHING IN MY POSTS IS INTENDED TO BE TRADING ADVICE.  Please do not base your trades on any information presented in the materials on this blog as it is for information and entertainment purposes only. You are 100% responsible for your own trading decisions. 

 

 

 

 

 

 

 

 

Get back to me when BTC > $710 + ETH update

Volatility_cartoon

Friday July 8, 2016  6:45 AM

Bitcoin fell below $600 last night ($594) then bounced hard and is currently trading above $650. Was the nearly $100 drop a huge head fake and now we are off to the races on a big buill run for BTC?

The patterns (and trading volume) say no. Until BTC convincingly gets above it’s July 3 high of $707 there’s nothing indicating higher highs are on the way. My target remains the $375 – $425 range, but that doesn’t mean we won’t see huge swings along the way —

Especially with the Halving (Halfing? Halvening? Ghaddafi? Quaddafi?) due tomorrow and stories like this that are sure to show up in the coming days:

As Bitcoin Halving Approaches, 51% Attack Question Resurfaces

ETH Update

As I noted on twitter, patterns continued to look bullish for ETH so I added 5% more to my ETH position last night at 9.86.

I am now 35% of my core position LONG ETH.

I would have like to raised my position to 50% but couldn’t find a strong enough short term buy pattern to justify the risk.

Since last night, ETH has risen sharply (in the real world 10% is sharply) and is now trading around $10.75. The patterns indicate a moderate probability first target of $14 with a second target (lower probability of $17.35). I will buy more ETH if I see a strong buy pattern even at higher prices.

The latest DAO news and debate about the benefits and risks of a hardfork is still hanging over ETH’s head, and I think this will continue for some time even after a decision is made.  Better to trust the patterns than the news at this point and stay conservative in how much I put at risk.

Again, I don’t trust overnight stops in the crypto exchanges so I am using my trading philosophy outlined here:

June 18 post: How I’m Trading ETH / DAO / BTC NOW

NOTE: NOTHING IN MY POSTS IS INTENDED TO BE TRADING ADVICE.  Please do not base your trades on any information presented in the materials on this blog as it is for information and entertainment purposes only. You are 100% responsible for your own trading decisions.