BTCUSD - Trading the corrective wave. Reverse at 10.8-11.2k?

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I recently sold at the top (Trading the potential bear trap at 12k) and went long again at the bottom of this retrace at 9.6k (Trading the corrective wave). My original plan was to sell this long position at 11k. I am now reviewing my plan to make sure this still makes sense.

What has happened so far?
We completed the 5 waves up to 11.8k. My conviction is that we have completed an ABC wave down, the wave count is shown on the chart.

What could happen next?
This is where it gets very complicated. Assuming my wave count is correct, following EW theory, we could now have any one of the following:

1) Double or triple Zig Zag . The first ABC done, now up for X. X can be almost anywhere lower than 11.8k. Then down again for another similar ABC .
2) We have completed the correction and are now moving into another 5 wave impulse that will take us through 12k and likely 13k+.

What does this mean?
EW analysis in this type of correction is not particularly helpful until the formation becomes clearer. I am looking for key resistance areas that could reverse this recent up wave. As that materialises, I will try and understand what wave structure is unfolding and therefore what the most likely scenarios are. 10.8-11.2k now seems like a key area because:

- 0.786 - 0.618 retraction of the recent retrace wave
- Resistance area on the way up and on the way down
- Top of (b) leg and wave 3
- Overlaps with the long term downward trend line (pink)

I think the long term trend line will be the deciding factor, so I hope to narrow this target down depending on how quickly we get to this area.

I like to understand the mentality of who will short in this area and can see that with a SL at the local high (11.8k) and a target of 9k (0.5 fib), there is a good risk reward of R3.5.

My plan
Unless these is a relatively big pause or step down on the way up to 10.8-11.2k, I find it very hard to believe we will not at least have a minor reversal here back to 10.3k. I will therefore look to sell my recent purchase around this area for a 15%+ profit. I will also sell some of the remaining BTC I purchased at an average of 8.5k.

I will then wait out to see what happens and get a better understanding of the type of waves forming - a new impulse up or the X with the Y leg down.

I have to let the market show me, but my conviction is a scenario where we complete the X leg up to 10.8-11.2k and the final Y leg down to 9k. This will present another good buy opportunity.

*** I initially had this option:
3) Expanding triangle. We have done abc and now doing (d) then (e). (d) will go higher than (b) 10.8k and then down for (e) lower than (c) 9.5k.
I ruled this out because (a) and (c) appear to be 5 subwaves so breaks the 3-3-3-3 pattern.
評論: My stop got executed at nil loss/gain.

Quick update,I'll spend more time Monday reviewing my plan so no trade at the moment.

It is possible we have a double bottom and might go up from here.

The other scenario I see, which has a clearer structure, is that we completed a very short X leg and are now down for another ABC wave structure which will terminate either at 8.8k (0.5) or 7.7k (between 0.618 and 0.786). That would be a good place for new long trade.

交易進行: Sold at 9686, details to follow shortly
評論: Update here:
I jumped the gun and sold at 9500..
monkia TulpenFieber
@TulpenFieber, patience may pay off. What's your stop loss?
don't short this my friend
monkia DrJLT
@DrJLT, It fits my trading plan and conviction. Low probability of success but great risk reward ratio so I had to go .... :-)
Dark purple XY are not exact points, obviously.
@Acel, interesting, thanks for sharing. What would the W->X leg look like? 5-3-5 or a 5 wave impulse? I'm not sure EW theory would support another 5-3-5 off an a corrective wxy corrective wave?
Acel monkia
@monkia, as far as i know, X can be any corrective structure, so no impulse.
I had the same analysis as you, but it looks like we were wrong.. what are your thoughts at the moment?
monkia TulpenFieber
@TulpenFieber, potentially the structure (WXY) was/is correct but the magnitude of the X pull back was just very small?
@monkia, it was supposed to reach our target, either the weekend traders used the leg up as to trap to fuel the sells later... or just that they got spooked sooner..
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