It's been a while since I looked at BTC; a previous post about it was looking for a correction then more upside. That correction has since gone way deeper than I thought it would but ... it's a correction nonetheless.
Now that the all-important TZ2 has been smashed, price is just about at the momentum gap formed way back in December 2020. The thing about momentum gaps, that not a lot of traders pay attention to, is that they can act as considerable support, sometimes not allowing price to close it. Sometimes, of course, price will close and then bounce; on other times price will slip straight through, particularly when there is a lot of momentum behind the approach. Given the strength of the bulls when the gap was formed, I would anticipate a strong reaction from this level. Worthy of note though: we have the ABC FE127 (using the ABC123 indi) inside the gap, to act as both a strong magnet and possible support.
Should price break through, we have Fib projection and retrace clusters (drawn with the eWavesHarmonics Fibo Clusters tool) to look out for; again, strong magnets and possible support. I'm thinking this gap will be closed, going by the strength of the move down, but there will be a bounce coming, if not the start of a new move up, that should offer the bulls something to think about.
I'm looking to buy some more BTC for my Crypto portfolio (which has taking a bit of a kicking this year) but am hanging on just a little longer to see how price reacts to these levels.
There’s a module in the course about gaps if you’re interested. They play a very key part in my trading the lower times frames. Ignore them at your peril..
I’ll keep this one as brief as possible, to share my thoughts from experiences (personally and from coaching others) regarding trading frequency …
A good trade (one that is planned, with an R:R of 5+) will always present itself within:
A bad trade (one without planning or pre-determined targets; or within risk tolerance) will always present itself every 1 bar: that is every new bar, completed or not, will offer a bad trade.
How do we determine X for good trades?
X is computed with due consideration to all the above. If you trade the one-minute chart, it seldom takes longer than half a session to find at least one good trade; often within the first 30 minutes of a session opening. On the hourly timeframe, it will rarely be longer than a week; often much less.
Fear Of Missing Out, the discipline killer, encourages most of us traders, to pick the bad trades; thereby testing what we know to be right and what’s in our plans.
Evidently there is zero need for bad trades when you know there will always be a good trade within X bars; you just need to sit on your hands until it presents itself.
Less is usually more, when it comes to opening trades, moving stop losses and taking partial profits.
Can you wait for X bars to improve your success ratio and increase your trading returns?
Whilst I find today's events in Ukraine to be beyond words and terribly worrying, the consequent liquidity in the markets has been staggering, with countless opportunities for really nice trades. We're seeing one minute bars cover the distance that we might have been lucky to see 15 minute bars cover in the past, so finding optimum entries that offer the lowest pip (or point) risk can be trickier than usual;
We call these trades VLPR (very low pip risk) in the Skype Trading Group, or VVVVVLPR if it's extra tight. It's a bit of an art of technical analysis to find them but we had three today, the above is just one example, and there were more to be had. Without a doubt, these are the most fun to trade, not just because of the rewards but because of the patience required to wait until exactly the right minute to pull the trigger. - split-second timing is often required if you're using the Buy/Sell Market Order button of ATM, which just adds to the fun,
There aren't many indicators that can give you the precision entries like this - it really needs the "mark one human eyeball". Obviously I use eWavesHarmonics and the ABC123 indicators - and they make trading a lot easier - but you still need to read the price action and see what happened around price levels to the left of the chart. It's all in the confluence and the more there is the better your chances.
Want to know how we do it? It's all covered in the Trader Training Course, that's still free for eWH and ATM users.
The ABC123 indi (that's been available on MT4 for some years now) is an extremely helpful add-on to eWavesHarmonics (eWH), especially good at identifying price targets and potential reversal zones, for corrective and impulsive moves, on any time frame (we use it all the time, with much success on M1). The on-the-fly Elliott Wave guidelines is also a great feature, for those who like Elliott Waves but don't have the main rules stored in their memory banks..
The ABC123 indi is now available for MT5 users who already have eWH. Get in touch if you'd like to purchase a copy.
There is often much debate about Fibonacci ratios and which should be used for trading purposes. Try searching the web and you'll be lucky to find a definitive list from a site that is 100% accurate or doesn't have pop-ups and click-bait all over them. I'm often having discussions with my trading friends about which are the correct numbers, so with all that in mind, thought it would be a good idea to create a page dedicated to the subject; that also provides a one-stop reference point without the pop-ups and click-baits and, most importantly, explains how these numbers are calculated.
Here's the link: https://www.for-exe.com/fibonacci-numbers.html
Ethereum USD is in an interesting spot at the moment - looking very much like an ABC back to the 4. Thanks to Sergio, in our Skype Group, for pointing this one out on Friday,
The pink horizontal lines, to the right of the chart, are Fibonacci retracements clusters (using the Clusters tool that comes with eWavesHarmonics) going back to 2016 - they act as nice support zones.
I've used the ABC123 indicator, for the corrective move, along with the Fib Expansion and Fib Multiplier (a new addition that's in testing and showing remarkable results) to project the price-magnet clusters: the purple horizontal lines.
BTCUSD is in the bottom window - you can see how nicely correlated these instruments are and how BTC is also at support.
So we have ABC FE100 back to the 4, price is in the 'golden zone' of the up wave - the 50/62 - and it's at the demand zone: several factors for confluence. Plus it looks like that's a possible small exhaustion gap to the cluster-cluster.
If ETH (or indeed the BTC) breaks current support, we can look to the FE127, right at the end of the 4 of the up-move, then the orange zones but, at least for now, this is looking like a nice discounted price to add some Ethereum to your portfolio.
To all my many trading friends around the world, whatever you celebrate at this time of year, I wish you and yours a very merry festive season.
As it's that time of year, something for free: I've improved the Wave Labels indi with a semi-automated function, to make the labelling of waves quicker and easier. There's a very short YouTube video here that shows it in action. Free to download from the eWavesHarmonics page , so help yourself if you fancy it.
You probably know that I don't offer specials or promotions, as everything on the website is already free or incredibly inexpensive, but since we've had such a terrific year's trading, and it is the time of year for giving, I'd like to offer an extra free year for licence extension/renewals on ATM and eWH, when purchased between now and the end of 2021: two years for the price of one, that will be added to whenever your licence is due to expire, providing your licence is still active. Get in touch if it has expired and we'll see what can be done, with the festive season in mind.
As always, thank you very much for your support, kind words and success stories, throughout the year. I hope 2022 and eWavesHarmonics. continue to bring you ever more success in your trading,
It's not often that I'll post examples of winning trades but it's not a rare thing to bank some big Rs on the one minute charts; there are plenty of opportunities for them on most days of the week.
Here's one example from yesterday morning, that was called in our Skype group before the London Open. It's my favourite kind of trade, not just because of the nice result but it was easy to manage and required just a one-bar stop loss. There were plenty more in the afternoon session as well - very liquid markets this past few weeks.
There is no special secret to these trades, nor do you need squiggly-line=based indicators, you just need to be aware of the following: -
1. (and always first) where might price be heading to? What are the strongest price magnets that will be pulling price? Find as much confluence as you can before going to the next step. If the magnets aren't obvious, then don't move on until you find them, later in the session or the next session.
2. Where might price want to start that move? Look back to recent history where price previously found support or resistance; where the buyers or sellers previously found a reason to trade the big money. Look for more confluence with fibs, session times, basic Elliott Wave theory, whatever else you like to use, etc.
3. Zoom in to find the best possible entry around your predetermined price levels and watch how the bars are formed: can you see in a one-minute bar whether the bears or bulls are dominant? If it's not clear during the bar formation, it should be when the bar is closed (after all, a price bar doesn't tell the full story until it is closed) but you'll often see clues in the ticks.
4. Get your stop loss and order ready and go. I used a market order in the above and the ATM swing lines for my stop loss, then clicked the Buy MO button on the bar close.
It takes some practice, of course, but it really isn't complicated or particularly clever: just reading the price action and key levels, pure and simple.
If you want to learn more then all is explained in the Trader Training Course and discussed everyday in the Skype Group (restricted membership for those who have completed the Training Course).. Keeping it stupidly simple.
I normally type the pre-market reviews for our Skype group but one of our long-time members (who is an excellent trader) requested that I do a video for a change. Not being one to deny fine requests from fine traders, I have dutifully made the video and, in addition to sharing it to the Skype group, have also uploaded it to the Training Course material, as it gives a good idea of how we analyse the markets using eWH and the add-on tools.
The big question, that's covered in this review: was last week's massive bearish move on the indices, just a knee-jerk reaction to the Coronavirus Omicron variant news, completing a much-need correction, or is it the start of a bigger bearish move? You might be surprised at the options ...
I've had a number of enquiries about the progress of converting eWH to MT5 so, for the record: it's just about complete now. There are a few little MT5 gremlins that need to be hammered but, for the most part, it's working very well and is a lot quicker to load than the MT4 version, thanks to the way MT5 deals with indicator buffers. To make the most of this feature, I've had to change the histogram to binary colours, unlike the MT4 version which uses four colours.
I'll be working on some minor tweaks, in the coming weeks but if you'd like to be an early adopter, I'll be offering an extended licence until the final version is released.
Whilst testing eWH on my ICM account, I've noticed that there are now quite a lot of Crypto instruments available for trading. The above pic is for DOGE on the M1 chart today - a rather nice rally, I'm pleased to see (not as nice as SHIBA has been these past couple of weeks - I'm super happy with that one).
Here's eWH in action on Binance - a nice rally from 38% correction and a Gartley ...
Bitcoin - well, back in July there was a buy setup from the 50/62 correction zone (where the algos love to trade, apparently) and price went to the target zone 1, plotted by eWH. Is it really a surprise that price went there and that it reversed from that point? Not really - that's exactly the sort of trade that we look for all the time, in the Skype group; the higher timeframe target zones are the subject of every day's analysis, as they offer the higher R:R trades.
It's about time that we saw a nice range of Cryptocurrencies on MetaTrader and I'm very happy to be able to use eWH with them; even ,more so now that the MT5 version is working.
I'll do another blog post when the final version of eWH for MT5 is released but if you're keen to start using it, for your Crypto / Forex / Indices / etc. trading, you're very welcome to be an early adopter. The add-ons like ABC123 and Wave Finder will be converted in the next few months, if all goes well.