Bitcoin has made a nice push back up. The next hurdle is for it to get back above 530 and 540s and hold up there. From that point, buyers will have stepped back in to hold control. Bitcoin is back in the upper Fibonacci range (which is one of the primary tools professional currency traders use), and Bollinger Bands being the second primary tool. So being in the upper Fib range is a very positive sign.

With volume being traditionally light over the weekend, be cautious, but optimistic shooting for that 530-540 range.

News has been mixed, but generally upbeat with more and more adoption and ATM news. This is good for the underlying health of bitcoin long-term. As for more stupid bubble-talk, just because you write for an online website, it doesn't directly correlate with intelligence.

Have a great weekend!

-cj-

Bitcoin did it! The scenario I drew yesterday came true, almost exactly they way I drew it. Broke above, and buyers started to step back in. Now if it can sustain this roll, it means that Bitcoin has shaken off (once again) threats from government : )

Included are basic upbeat news of more adoption of bitoin and eBay/PayPal/Braintree taking Bitcoin will be amazing. Like I've always said, the more people are buying *and spending* bitcoin, the healthier it's going to be in the long run. So it's all looking good from this stand point.

From here, let's see Bitcoin push through 510-520 and then it's on up.

Fingers crossed for the ever so resilient Bitcoin...

-cj-

Bitcoin has been selling off in a stair-stepping fashion. Which means it's a controlled selling (or converting to cash). This is a good sign which means that it's orderly changing of hands. So hopefully at some point soon, the price will induce buyers to step in, and begin the reverse stair-climbing.

There is also talk beginning to spread on using Bitcoin for international money transfer. If this continues to take off, it will infuse Bitcoin with a new culture of buyers. Combine this with more and more ways to spend Bitcoin and you get a fresh set of buyers to push prices up.

Below is the latest report, and I've drawn lines to show triggers to show that buyers have begun to step back in.

-cj-

With the push down of Bitcoin recently, I was asked what it would take for Bitcoin to firm up a recovery. Basically as you can see in the report below, with Confluence being red (most traders looking to sell), Bitcoin needs to make it back above the line I've drawn. But in addition to getting above that line, it needs to hold above the line. Then confluence will begin to shift green again, and long-term buying will resume. So keep an eye on the 520 mark, especially heading into Europe later this evening.

News has been mixed, with the traditional governments issuing "warnings" against a new currency. No surprise there. Other than that the news has been full of new announcements of where you can spend Bitcoin (which is good for the underlying Bitcoin economy). This is especially true with Overstock showing a healthy spend from Bitcoin.

Have a great evening, and let's hope Bitcoin resumes it's climb back above 1000 : )

cj

===============================
     WITH THE TREND EXAMPLE
===============================

To follow-up, here is an example trade that is going with the trend. The idea of a trend trade (although less exciting than counter-trend trades) is to latch onto the trend of a higher timeframe. So you use the smaller timeframe as a zoomed-in approach to fine-tune your entry, and take less risk.

But the profit motive is BIG. The objective is to catch the bigger wave of movement and then ride the larger wave.

In the example below, you can see that everything is in the green. So although this signal fired quite a while ago, you are still in it, riding the profits.

With a trend-trade you want to then manage your trade with a gentle hand. You want to let the trade breathe a little, managing the trade pivot by pivot. As bitcoin keeps pushing new highs, and doesn't pull back so far as to take out a prior low, you can let it breathe and continue to push upwards.

As the trend extends into higher and higher time-frames, you can just let that single trade turn into an "investment" for a longer hold.

Then look for another low-risk opportunity to get more bitcoin, and ride it upwards into an investment (longer term trade).

SO WHY WOULD ANYONE WANT TO COUNTERTREND TRADE?
It seems silly to trade against the trend, or to scalp trades when bitcoin is stuck in a congested price range. But there is an advantage to countertrend/scalp trading. The advantage is accumulation of bitcoin, piece-by-piece.

If you started with 1 bitcoin (for example), and only took scalping trades, you would only be making between $50-$100 per trade. But 10-20 successful trades later, you have basically doubled your account and now have 2 bitcoin. So you accumulated another bitcoin, bit-by-bit (no pun intended, well, intended a little.)

===================================
       COUNTER-TREND TRADE EXAMPLE
===================================

I've been getting lots of questions on whether to trade against trend, and what does that mean.

So here's an example of what countertrend trading means from a technical perspective.

In the example below, the signal to SELL or SHORT was issued. When you look at the At-A-Glance, you can see that the two higher timeframes above you are LONG (going against you).

Does this mean you can't trade against the overhead timeframes?

You can trade against them, you just have to be aware that this is a countertrend trade, and you don't expect it to go far. So this would be considered a scalp trade (quick profit).

So in this example (below), you could have made about $10-$25 profit taking a quick profit. There are lots of traders who like to countertrend trade. They do this because they know that profit-taking always steps in to push prices temporarily back down, and that gives a countertrend trader their profit.

You just have to be aware that with countertrend trades, you have to be on your toes.

Bitcoin has continued it's uptrend. You can see in the chart below that it has done the important things so far. One it broke through 850 (a critical number) with strength. Then came normal profit taking (selling), which was followed buy fresh buying (and more importantly) printing a new high.

Once again there is new profit-taking off the new high. So the next step for bitcoin is to push above the 880 number to continue to make new highs. If bitcoin stalls at the 880 number, then it's an indication that the major buyers have been exhausted (used up) temporarily.

Price always needs to rest. Either by pulling back, or by moving sideways. So shortly we'll see if it has enough energy to continue to push new highs.

The news has generally been upbeat, and bitcoin has shed off the prior's year news and pushed back above the 850 mark, and with gusto no less.

Bitcoin ATM's moving into Hong Kong, Taiwan, then Europe. American politicians looking for donations in bitcoin, and a new anonymizer for bitcoin transactions on the horizon, the long term prognosis of bitcoin looks better and better.

From a technical standpoint, Bitcoin's latest push has held in the upper 50% of the push (above the 850 mark). This is what you want to see if you expect the move to be sustained.

After than move, price has been brisk and volatile (not a bad thing), and pushing outside its high-bound Fibonacci levels. All good signs.

Let's see what Asia and Europe have to offer in the next few hours.

More to come : )

cj

Sorry there haven't been more updates posted to the forum, we've been swamped moving over some new technology to the bitcoin side. Hopefully it will be wrapped up this week, and I'll post more regular updated.

It seems that with a little bit of holiday cheer, bitcoin has managed to break out into a slight uptrend. The news is generally upbeat (in the fact that it's seriously caught the attention of mainstream media and economists).

All PR is good PR, remember : )

cj

We warned our traders yesterday that bitcoin's recovery would halt at 750-800, but that's okay. For a recovery to be sustained it needs to rest (as strange as that sounds). It more has to do with a technical flushing of orders out of the system, blah blah blah. But the bottom line is that what has happened is a normal phase 1 recovery of prices.

Now the big question is: will bitcoin push on to phase two, and move to the next level of recovery. There are several critical points for bitcoin to make to continue.

And in the news still has bubble talk, but they are going to teach people how to mine bitcoin on Bloomberg Television (okay, stop snickering), the Native Americans want to really carve out their own world and move to bitcoin as their currency, whereas online poker and Overstock.com will start taking bitcoin shortly : )

Overstock is the first hint of a big e-tailer accepting bitcoin. This progression alone will add to bitcoin's long-term prognosis.

<Begin Pointification>
             Stay safe over the weekend, control your risk, and buy bonds, er, bitcoin
             (but only in small risk controlled purchases).
</End Pontification>  

 ...   and on with the pretty pictures  : )

cj

Well, China has come and gone without another round of flushing. So I'm going to cautiously say that China has finished it's primary round of liquidation, and with some fresh buying coming in as Europe begins to wake up, it's a positive sign for bitcoin.

: )

cj

The news and reaction is obvious. Yesterday, and all night the major trade signals have been to sell other than a couple of short reaction longs from bounces.

The Chinese government basically told the Chinese citizens to get the hell out of Bitcoin. But come on, no surprise here. Chinese people (those with money) work all week long on ways to get money out of China. So with the front door being closed by the chinese government, they will poke other holes in the Great Firewall of China (like they always do.) It's just a matter of time before underground cash businesses get set up to sell bitcoin, and numerous other mechanisms get set up. Rich people LOVE money mechanisms independent of banking. Bitcoin is the ultimate vehicle. So it's just a matter of time.

So what until then?

The big question is how much of the Chinese flush is over with, or is there more flushing. Once the flush is finished, Americans and EUROpe/South America can begin stepping up. The flood of buying this morning was when New York banking opened. So we'll know more after the Asia session and beginning of Euro banking.

I'll check back in later during the Asian trading session, and until then,

Stay Safe :  )

cj

@outofservice (cool name by the way) - I was using this forum as support for our subscribers. Sorry for the confusion. I was referring to an update that went out to them. After an email goes out, I sometimes add additional follow-up information here (instead of re-emailing everyone). Again, my apologies, I will try to be more clear in the future.

cj

@Empoweoqwj, I apologize, but I'm not the mentoring sort. Way, way too busy. Probably unhealthily so, but I'm always happy to answer any questions you might have.

Seriously, just ask   :  )

cj

Triangle update has gone out. I might take a long position if the triangle triggers long. I'm going to tempt fate and fade the retreat back to the upper trendline (with a small position of course).

Controlling my risk ; )

cj

@empoweoqwj -- I see what you're saying.

Bitcoin was adhering to it's downtrendline. Then it broke above it with umph. Not just crawled above it, there was strong buying pushing it through it's downtrendline. That was a sign of attempting to recover. I had messaged our traders earlier that day to look for a break "with umph". And bitcoin did it = attempted recovery.

[Sorry I didn't make that clearer in my original post.]

But then the overwriting caution that confluence was negative. So despite the attempting recovery, be cautious.

So I got a signal that happened along with the trendline break. Because it happened with the trendline break, I took it. But with confluence being negative, I didn't expect it to go far (hence the caution.) So I took a quick profit off it (about $40), instead of letting it ride.

Thanks for all the compliments!

Unfortunately the Confluence (that confusing part) took over, and fizzled the attempted recovery.

Basically, Confluence is a measure of tons of technical indicators. These are the things technical traders like to watch. So no matter what technical traders are watching, when the majority of those indicators are pointing down, that means there are lots of traders who are thinking down.

So when most of traders are looking at screens saying "down", that's definite pressure on bitcoin.

That's why it's important to be aware of what's going on around you before you take a trade, or make an investment. Lack of situational awareness is always a killer.

: )

cj

This is the long trade I just took (those one I mentioned in the email). Mostly I got lucky, I happened to be sitting in front of my computer when this alert triggered. It corresponded with the trendline break, so I took it.

The previous trade didn't work out. Broke through the lower pivot off my entry (pivots as mentioned in the getting started guide), by the time I got to it, I was -$20. Oh well, hence adding in the price alerting system : )