ETHUSD: Extreme Price Zone Offers Chance To Buy.

31 Jul 2018

ETHUSD update: A healthy retrace has taken this market back to the low 430's. We managed to avoid any premature entries during the period of random price action recently. And this pull back was what we were waiting for. Extreme prices are where probability becomes favorable.

As I wrote in my previous S.C. reports, consolidations are areas where randomness is the greatest. Fake outs are commonplace and unless the market can offer a favorable condition, risk could not be justified. No oscillator will help you filter out this type of situation, only best practices.

423 happens to be a reversal zone boundary that has been in place since June. If price cannot get itself together over the next few hours, it is likely to retest this level. Like I wrote in a recent report, first comes the location, next comes the setup.

The whole purpose of a setup is to filter out low probability trades. A pin bar is an example of a setup, but as you can see, two candles ago price could not take out the high of that pin bar which negated the long signal. Once a qualifying setup appears, we intend to share a swing trade idea with our followers at S.C. It may be in this market, or one of the others.

The great thing about these extreme prices is they also offer an opportunity to accumulate longer term inventory. While looking for swing trades, we are also allocating a portion of our capital to buying small portions of the highest potential coins. Buying into extreme weakness is the best time to employ such a strategy, but it must be done with careful planning. The details of which coins and how much will be shared with our members.

Nothing has changed in terms of the structure on the bigger picture. This retrace is nothing more than impatient traders who bought prematurely getting shaken out. We did not predict this move, but we were prepared thanks to following best practices.

In summary, patience and not caring about missing a move is how you align yourself with the next move. The market will eventually meet your criteria if you give it a chance. Giving it a chance means letting it rally without you. Missing moves never shrinks your account, but forced trades do. As you can see, the many false starts and fake outs have lead to a more dramatic sell off and this is where the real opportunity is.

Best practices are not some complex set of rules. They are based on recognizing the traits of the herd mentality, and taking the proper steps to capitalize on it. The first step is to think against the crowd. This means unplugging yourself from the hype that they consume, and developing a point of view that is based on market structure. This is how you get into the habit of preparing, while they continue to react.