I noticed a lot of traders trade on news only, scramble in and out of coins based on tweets, blogs, etc. Some are successful but for the majority of traders this will lead to loss after loss after loss. Not that news doesn't effect the market, it often is a catalyst for what WAS going to happen anyways. News has more to do with the timing of a trend change and not the inevitability of one. NEO is a perfect example. After a great run since it's ICO days, NEO has provided us with a nice ROI. It seem to start to stall lately and it was clearly in a 5th wave only looking for a spark to start the retracement. We got it with the news about China today. And the news wasn't even bad news it just wasn't good. China was declined the ICO. And then the selloff escalated. However NEO had already shown signs of retracement yesterday prior to the news being released. So was the news the cause? NO, it was only the catalyst to move it along faster. I hope you saw this coming and got out or reduced your position. I did. But what did the news tell us? Only that the ICO was not going to be available in China. Is that horrid news? NO the coin will still trade in China it's just not allowed to be offered as an ICO. I'm not a crypto expert but this was hardly a road block and more like a bump in the road. But the selloff happened.
So what next? Have we bottomed? I posted a simple overall weekly graph of NEO. It's a simple chart and sometimes simple gives us the best picture overall. Not a lot on this because I truly believe this was bound to happen and it is just setting up for the next cycle. Normally we would like to see a retracement into the 4th wave, it's not one of the laws, but definitely a guideline. However we have hit the 0.618 retracement level and I would look for consolidation at this level normally. However Crytpos are not normal!!! They move fast. It's like SVXY on steroids. Coming from the mainstreet market, I have had to adjust my trading style to account for these movements. The good: They move up quickly. The Ugly: The drop like a an avalanche. So how do we deal with these extreme moves so we are positioned during a breakout while minimizing our risk. First - never be all in on one coin. I would not ever be more than 10% of my portfolio in any one coin. Second find good fundamental coins and trade around a core position with half of the money. I did see the reversal yesterday and I sold 80% of my coins, as the graph looked like the SEC invaded their offices. But now that things have settled down I am able to start buying back at a cheaper price. I will add in 50% positions between the first and second retracement levels (just added the first), however if I see a signal for a breakout I will quickly buy back the whole position.
Thanks for reading good luck in the pits!!!
So what next? Have we bottomed? I posted a simple overall weekly graph of NEO. It's a simple chart and sometimes simple gives us the best picture overall. Not a lot on this because I truly believe this was bound to happen and it is just setting up for the next cycle. Normally we would like to see a retracement into the 4th wave, it's not one of the laws, but definitely a guideline. However we have hit the 0.618 retracement level and I would look for consolidation at this level normally. However Crytpos are not normal!!! They move fast. It's like SVXY on steroids. Coming from the mainstreet market, I have had to adjust my trading style to account for these movements. The good: They move up quickly. The Ugly: The drop like a an avalanche. So how do we deal with these extreme moves so we are positioned during a breakout while minimizing our risk. First - never be all in on one coin. I would not ever be more than 10% of my portfolio in any one coin. Second find good fundamental coins and trade around a core position with half of the money. I did see the reversal yesterday and I sold 80% of my coins, as the graph looked like the SEC invaded their offices. But now that things have settled down I am able to start buying back at a cheaper price. I will add in 50% positions between the first and second retracement levels (just added the first), however if I see a signal for a breakout I will quickly buy back the whole position.
Thanks for reading good luck in the pits!!!
We must not get impulsive quite yet as there is still a chance we could pull back some more to the ideal retracement point. I have drawn a channel around the consolidation to provide a guide as we consolidate horizontally.