Where are the best configurations?

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If you weren’t ready to take risks at much more attractive levels, why would you think those levels are better? Because it looks stronger? The most effective thing to consider is what you CANNOT SEE. The 35K zone is in the middle of the recent consolidation between 28.5K and 41K. Often times these locations are very hit and miss in terms of price action and if something offers a better opportunity to reduce risk, NOT put more.

If the price closes STRONG above 35K, it increases the chances of testing the upper end of the 41K area range over the next few days. Part of our profit targets our 35K to 40K area for this reason. For the bearish structure to be canceled, the price must close decisively ABOVE 41K.

What makes new trades in this area so risky is this: Price can easily find resistance as it approaches 40K. It can reasonably fail and test the 30s bass again. If you buy at 36K for example, and it goes up to 38K and rolls back, you basically have to risk 6-8K to potentially gain 2 at 4K. You cannot generate positive returns over time with this type of ratio.

At this point, if you’re not in it, the BEST thing you can do is WAIT for the next opportunity. The two scenarios we would consider are 1) price re-tests the 30K area followed by a new buy signal and confirmation or 2) price clears 41K then retreats and establishes a new support level to set the risk. Scenario 2 means that the entry price can be much higher, BUT in this situation the broader price structure will be much more favorable than it is currently. We have no problem giving up lower prices for a more favorable environment (bullish structure rather than consolidation).

Keep in mind that this process can take days or even weeks to complete. Over the past month, we’ve shared three Bitcoin signals to give you an idea of ​​how frequent our rules-based LONG only swing trade strategy is. If you trade more than that and you are not a day trader then you are excessive trading because there are not a lot of quality opportunities in this environment. Minimizing price noise is one of the great benefits of having a well-defined set of rules.

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This article originally appeared on FX Empire

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