It’s Sunday again and that means the time to look at the chart and plan possible trades for the coming week. The price has been sitting around the 30’s level for a few days, what’s more interesting there were three inside daily candles so a possible break out could bring a somewhat stronger move, especially when you realize it is a start of a new week.
The market is currently at a quite significant point, which should imply some nice price action ahead. A break above could have attack at least the last week’s maximum. However there’s one thing worrying me: similar break above happened last week and it couldn’t reach even my first profit target. So I’m cautious now. On the other side after a possible failed break above 136 we could see a strong sell-off down to 105 at least.
With that said let’s set up the buy and sell points (Mt.Gox chart).
Buy 137.00, SL 130.90, PT1 144.50 PT2 160 PT3 175
Sell 127.40, SL 134, PT1 122.00 PT2 112 PT3 106
A look back at the last week’s trades:
The buy order was triggered, but hadn’t reached any of the targets. However, even when the market wasn’t being marching higher as steeply as in the previous weeks, you could book a nice profit of more than 20% when closing around the max. Of course, such a timely exit would had been not according to my strategy, but hey, taking profits is a more individual thing than opening a position. I personally like to leave the market some space for moving up or down even with a chance of ending at B/E or a loss. That was the last week’s case (BE).
My electronic devices are not working properly at this time and even writing these lines is driving me crazy so just a quick trading update without much unnecessary words. Let the numbers speak…
This week trading plan:
Sell point: 109.50 SL: 132.00 PT1: 101.00 PT2: 86.50 PT3: 72.00 PT4: 56.00
Buy point: 133.00 SL: 109.80 PT1: 175.00 PT2: 185.00 PT3: 194.00
Last week trading result:
Sell PT1= 5%, PT2= 22%, PT3= 43%
Buy PT1= 11%, PT2= 18%, PT3= 33%
Can you see those numbers?!! If you’d been ultra cautious, you could book 16% in a less than one week. If you’d let both trades run to the highest recommended profit take targets, you could gain 76%! Without even 1 lost satoshi. Guys, this market is a speculator’s heaven. I should probably really start to trade this baby!:)
A four consecutive red days + yesterday’s close below 100$ all indicate that a possible bounce of the low doesn’t have to be so persuasive as it looks according to the Friday’s daily candle. If you’d look carefully at the chart you can’t find more than two consecutive red days from the start of this rally in December/January. Also the 60% retracement level from the top has been breached, that most traders consider to be a last barrier for corrections in trending markets.
Now the real trading can start. It is not hard to book some good profits, when the market is increasing by dozens of percent day by day. Every monkey trained in pushing a right buy and sell button can be profitable in those conditions.
So what to expect in the following days? I’m still a long-term bull, not so much in the short-term outlook. No market however strong fundamentally can grow exponentially forever. A steep up move is followed by a periods of consolidation or a sudden and big falls. BTC/USD has experienced strong increases since January that resulted into the sudden fall last week. Now it could have to be a time for some rest.
A brief review of the last week trades:
Buy TP1= 22%
Buy TP2= 35%
Buy TP3= 70%
If you’d taken the sell trades, they would be profitable also:
Sell TP1= 1,5%
Sell TP2= 5%
Here are the trading points for the coming week (based on the Bitstamp data):
Buy: 100.20 SL: 94.80 TP1:111.70 TP2:118.70 TP3: 133.20
Sell: 89.80 SL: 95.00 TP1:85.20 TP2: 70.00 TP3: 51.00
My personal bias is down, but let the market decide the direction. Do not forget, trading is not about foreseeing the future price, but to be prepared and react on what the market is offering to you. Respect it.
Just a quick recapitulation of the last week trading result:
3,7% when you exited according to the plan
38% return when you exited at week’s high (the highest possible return)
The target was too much conservative and I can adjust it in the next plans because a daily returns are increasing so our weekly target also will. But remember, these trades are a short-term ones and our goal is to be profitable and generate some cash-flow in a long-term, whether the market is trending up, down or consolidating. That’s why I choose such a “conservative” targets. Of course the final cut is always on your decision.
Also, look at the profit difference of maximum potential (38%) and our target (3,7%). That’s why I keep saying you profit most in this market when sitting tight with your long-term buy position from the start of this rally. Be it 0,1$, 1$ or 10$. Well if you weren’t so lucky (smart) and have bought just recently the same applies. Because this market is heading higher, much higher. That doesn’t mean it can’t drop below 100 or 80$. But when you play a long-term game that potential sell off wouldn’t be much to bother with. Because from here it can go to 70$ and technically still perfectly stay in the bull market.
Now to the current outlook and trades.
It looks like our trading week should start on Sundays. Bitcoin is live 24/7 and doesn’t know weekends and sometimes even a banking holidays.
The USD/BTC price on Mt.Gox broke through 147.05 today, that is going to be our buying point for the next week. You can place a stop-loss order just below 139.50. If the market wants to head higher, this level should have been safe. I was too much conservative last week as regards the profit target. So now let’s set the first one at 179.00, the 2nd at 199. In case of this buying frenzy will continue the same pace as in the previous days, we can easily see Max Keiser’s short-term target of 250 USD been hit.
What about a sell point? What? Do you really want to short this market? OK, then try to enter at 142.05 with the stop-loss at 145. First PT at 140.00, 2nd 135.20.
Hmm, now let’s hope the price is going to correct to the buy point or 150 at least.
What a fool’s day today, was it? The USD/BTC price climbed more than 10% from the open. Wow. And this should only be a precursor of what we can expect in following weeks.
As regards this week trading, I regret now didn’t put up a points yesterday. I just thought of today as a quiet holiday break not realising banking in Japan not been affected. And of course as at the start of every week Mt.Gox opening and processing of a new accounts and buying orders reflected in an immediate price increase.
That is why I think the major move of this week is over, but it doesn’t mean there aren’t going some opportunities appear. Here is what can I see now:
Buy: 106.05 Stop loss: 103.00 Profit take: 110.00 or when you satisfy your greed.
Sell: Not a slightest reason to sell at or near the current level.
92.18 SL: 95.00 PT: 91.20; 87.20;
Now, prefer to buy of course, but as mentioned above, I don’t like catching up a running train. It means this point can work the 2nd or 3rd time after some stop loss hits (though the stops are big enough, are they?) .
I would also like to see a correction down to 95-97 USD and then a bounce up. But as you know one’s wishes and assumptions are completely meaningless in any market:)