ETHUSD Update: This market has established a double bottom formation around the 375 level and is now attempting to break out. I have placed a limit order to buy at 392 with a STOP at 365 and Target of 445. This is a potential swing trade with almost 2:1 reward/risk.
The current price action at the 416 level (at the time of this writing) is tempting but the problem is price is about to enter a minor bearish reversal zone (432 reversal zone boundary) . The double bottom structure is in place and the initial bearish trend line broken so the bullish signs are there, but being on the conservative side, I would rather capitalize on the possibility of a shallow retrace.
There is a minor .618 support in the 380s and relative to the double bottom, offers much lower risk in terms of placing a stop. I consider placing a limit order under the market like this an aggressive choice for me compared to waiting for price to retrace and then show evidence of a clear reversal formation like a pin bar at the predetermined entry area, but I am willing to take that chance in this particular situation.
The best swing trade entry was the break above the 372 inside bar which occurred on Friday. It offered the lowest risk and is now paying off nicely if anyone got in there. I mention this, even though I missed this entry, because this is what a low risk entry trigger looks like.
For those who are more aggressive, you can consider a long around the current break out level which is 418 (price has moved to 423 as I write this) , but the risk of a fake out is high. This is why I prefer to place a limit order under the market. If you do enter here, I think it makes sense to enter half of your original size here, and place an order for the other half under the market. This way, if the market continues higher, you are still benefiting. If the market fakes out instead, your risk is lower (only half of your original position) and you have an order in place to get a better price. You have to decide which is a better scenario for you.
If the 432 reversal zone boundary is taken out and price closes above it, then the bullish momentum is more likely to continue to the 451 level which is the .382 of the recent bearish structure. This is why I chose the 445 level as a potential target IF this market fills my order at 392.
In summary, the current price action is presenting a classic break out formation. Certainly a welcome situation that makes for a much stronger bullish argument. The problem with buying here is the high possibility of a fake out. It does not mean it WILL happen, but I prefer to buy near supports, not resistances. If the market does not retrace, and my limit order never gets filled, that is okay. I will cancel it and be prepared to enter on the next retrace, whether it is a shallow one or deeper one. Either way, this double bottom formation signals a short term trend reversal that can lead prices back to the high 400's to low 500's over the next week. Make sure to check out the free analysis on S.C. that will provide more detail on this market as it continues.
Questions and comments welcome. (I am going to change up my writing schedule. I will post a new idea every other day, and an update on the alternate days. This means tomorrow I will post an update to this report only, rather than a new report.)
432! Beutifull Marc the Master. Hope you will get your 392's now! Keep up th good work.
isterband
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@castaneda, This guy tell you to short 432 and long 392, YOU DO IT, m'key? That is what what? 10%
Now if we hit 445 I will bend my knee for the King.
yeddula
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@MarcPMarkets can you please update under the idea rather than a comment ? It helps us with a notification email on the idea update. Any way great work again capitalizing at your 445. Thank you. Waiting for your new update.
MarcPMarkets
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Update 4/10/2018: The long swing trade that I called in this report (yesterday) was filled at 392. As you can see, the market is now back to the 412 area as I write this. The higher low in the 387 area has now established a new bullish trend line which is a good sign for longs. The question is can this market break the 430 area resistance? So far price has failed once, but with a higher low now in place, I am anticipating that this level will be compromised. Buying now carries a lot more risk, so not a good idea in my opinion, even though I am anticipating higher prices.
The lesson to learn from this trade is this: I placed the limit order at 392 hours before the market retested that level. When I was writing the analysis, price was at 416 and went to 424 while I was still writing. Why didn't I just jump in? It was tempting, but like I wrote, I do not like buying into highs, and now you know why. Price was right under a reversal zone, risk was high. I did not know if price was going to retest the 390s, I just knew that there was a chance it could. I placed my order and the market cooperated. The key lesson? IF the market continued to rally without me, I would have no care in the world. I don't lose anything by missing moves, only the herd believes a missed opportunity is a loss. I can miss an unlimited amount of moves, and guess what? My trading capital is still available to employ in the next opportunity, because the market does not run out. Fear and greed is what drives the herd. Look beyond the money and you will see the market much more clearly.
I noticed some comments about email notifications not going out, thanks for the heads up, I have no control over Tradingview email notifications. Be sure to visit S.C. because every trade that we call, and a ton of great research is all there, and available free.
BRRD
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Wow, what a pin.
dwk8081
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will it break thru the 499? This is going to be interesting.
Quick update: Profit target plan being adjusted. See analysis on S.C. We are employing the aggressive strategy.
icheerios
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Interesting points!! Also, it seems like we share a similar feeling towards risk-reward ratio and entry/exit points in this trade.
Could you explain the importance of a double-bottom in your "classic break out formation"? Intuitively it suggests that the bottom support is not being broken, but I don't understand why this suggests a bullish sign. Is that all there is to it?
Thanks
yeddula
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I capitlized on your friday indication at 415.23 and i was waiting for your analysis today. Usually i get a mail on your TA but dont know why i didnt get today. Good that you update your twitter.