For those who have been following this position trade, my average price is 10020. The swing trade call that I made at 8854 paid an 1800 point profit (if you sold at 10500) and IF you held onto some as I suggested, you are riding a winner. The main premise behind the position trade was the magnitude of the that the market reacted to which was the 8171 to 4983 area (.618 relative to entire structure). And consistent with this premise, price has cleared the minor of 9890 to 10836 (.618 area of recent structure). The next area to consider is the 13012 to 14889 (.618 relative to entire structure).
The break around the 11400 area is a significant sign. It serves as evidence that the momentum that took this market to 6K is no longer in effect. This does not mean the market won't retrace though. In this scenario, I would expect support levels to offer a better chance of holding, rather than this market testing new lows. Keep in mind, price has not cleared a small reversal zone that is just above the most recent minor peak. IF a candle formation appears at the current level, that would signal a failed high and more than likely lead to a retrace. On the other hand if there is a strong close, then it is reasonable to expect momentum to carry price into the higher over the next few days.
In the failed high situation, I am looking to sell 15% of my position, otherwise I am holding for the 13 to 14Ks. Letting a winner run is a best practice and requires the flexibility to adjust if the market presents a less favorable sign. Part of my plan was to see how price behaves on the break of the . Any trouble, I will lock in some profit and reduce risk, otherwise hold. I may not be able to update this post with timely order information so it is not wise to depend on me for these types of decisions. I am telling you my plan, and you must have the ability to make the judgement on your own whether to lock in or hold.
In summary, one of the best lessons you can take away from this trade is this: To benefit from a broader move, you must be able to see the opportunity before it becomes obvious to the herd. If you find yourself confused because of conflicting information the whole way up, it is because you lack your own perspective and are missing a process to evaluate market information effectively. This will especially be the case if you are a hyper consumer of internet news which only serves to benefit marketers. All financial markets, especially this one, are environments that flow with uncertainty at all times. Price action can help us get a sense of how the crowd is likely to react, but the key to benefiting from this type of evaluation is also having the mental flexibility to adjust if your scenario is negated. There is no certainty, only probability. Our goal is to find ways to stack probabilities in our favor enough to justify taking the risk and usually when these opportunities are present, they are not obvious.
Questions and comments welcome.
We were waiting for consolidation which did not happend.
Price was pushed to 11,7.
Now we are experiencing reversal to 10050 (aprox).
12-16h, then heading toward 8,2-8.4k.
Also, Marc hope you're trading on GDAX and not Coinbase.