@chessnut

We thought it would be better to post here so we can have a direct exchange of approaches. Although, we do not apply EW, it would be nice to compare our entry and exit trade setups.

In relation to your latest wave analysis on BTC China, what trade setup could you suggest? For example, what price shall trigger a short trade setup / keep a trader short / up to what possible lower target, with what given odds?

...and the inverse: if prices strengthen, what is the price level that will trigger a "buy" setup?

In the simplest terms, right now prices have rolled over once again, but this time, have been denied by a triple resistance: the 50MA, the 200MA and just recently the 100MA. All these resistance levels have to be breached to the upside with strong conviction. Otherwise prices will remain weak and possible begin to decline further from here.



Outcome Probabilities:

Long: On a strong break above ¥2363 – Price Target ¥2466 | Probability: 25%
Neutral: Price Range ¥2330-¥2360 | Probability: 45%
Short: On a strong break below ¥2314 – Price Target ¥2258 | Probability: 30%

Because it has been compressed below the Middle 200day Bollinger Band for almost 17hrs. Volume is very low. Stochastic is on overbought levels for 8hrs.

1HR - Bitstamp

Price must break above both the 50MA and 200MA resistance with conviction in order for any meaningful rally to take place.

Price has been compressed for almost 17 hours. Volume is very low. Stochastic is on overbought levels for 8hrs.

Something has to give here soon. Any possible rally must be followed with good volume.

1HR - Bitstamp

Price must break above both the 50MA and 200MA resistance with conviction in order for any meaningful rally to take place.

That is a better approach. We say $398 in terms of simplicity!  

As you have done in this chart, you shall use more narrow targets and if broken move to the next possible level of resistance/support to validate your analysis.   

First major resistance on the Daily is at the 100MA (Middle Bollinger Band) at $489. But you must realize that there are also intermediate levels that have to break to the upside in order for this downtrend to reverse.
A first signal will be if price manages to break $398 with strong volume to the upside.

The range you suggest is very wide.

Judging by your general comments, the vocabulary you use is your favorite.

In relation to trading, what does EW theory have to do in this subject?

Why don't you provide a chart to justify your opinion and help others too?

Thank you for your comment.

We would like to see a justification of "pointless" by providing an appropriate chart, as this will be more productive for everyone.

@chessnut
Thank you for your comments.

Fractals in candlestick charts assist in identifying reversal points in the market. Patterns consist of many fractals. When fractals tend to repeat, they produce similar patterns.

The basic rule is that a fractal consists of 5 candles. However, when zooming out, a specific part of a pattern can be used as a general fractal (for simplicity and understanding) in order to investigate repetition of a trend or a turning point and help to justify a thesis.

It is the same with relation to different time intervals. For example, the 1hr when broken down it consists of 2x30min bars, or 4x15min bars, or 12x5min bars etc.

Although beautiful, fractals found in nature have nothing to do with chart fractals.

Price on Bitstamp above both the Middle 100BB & 200BB support | 1hr time interval

Since a small correction on the 16th of October, price has been supported my both the Middle 100MA and 200MA Bollinger Bands.

After a short breakout rally on the 18th of October, price has been compressed between the $385-$392 area.

For this weekly preview, two fractals have been identified, that show similarities and may hint how price action may play out.


Fractal A [290914-031014] : Approximately 83 Bars/Candles before a significant price movement.

1. RSI failed nearly 13hrs before the 5MA confirmed a bearish cross on the 20MA. Since then it continued declining sharply along with price.
2. MACD confirmed a bearish signal roughly 2hrs before price started declining and entered negative momentum territory.
3. Both the 200MA Upper and Lower Bollinger Bands started compressing, with the 200MA (Middle BB) acting as strong resistance (Pink line).
4. Both the 100MA Upper and Lower Bollinger Bands started compressing, with the 100MA (Middle BB) acting as strong resistance (White line).
5. The 20MA acted as short term resistance and guided prices lower (Yellow line).


Fractal B [161014-Today] : Approximately 77 Bars/Candles. Waiting for any significant price movement.

1. RSI has failed twice on the 69 level, almost 13hrs before the 5MA confirmed a bearish cross on the 20MA. Since then it has not reversed and price has shown no signs of clear direction.
2. MACD confirmed a bearish signal 2hrs before price started compressing. It has not yet entered the negative momentum territory.
3. Both the 200MA Upper and Lower Bollinger Bands have compressed, with the 200MA (Middle BB) acting as strong support (Pink line).
4. Both the 100MA Upper and Lower Bollinger Bands have compressed, with the 100MA (Middle BB) acting as strong support (White line).
5. Since the 5MA bearish cross on the 20MA, the latter has been acting as short term resistance (Yellow line).


On the long side: At the time of writing, a significant difference has been identified between the two fractals. That is the support offered by both the Middle 100MA and 200MA BBs. This support has been tested and proven strong. Hence, as long as both hold, the bullish case will remain healthy. A strong break above the Upper 100MA BB at $398 will increase the odds of propelling price up to $410 and possibly further.

On the short side: There has to be a combination of weaknesses across the board in order for any meaningful decline to begin. First, MACD must enter the negative momentum territory. Moreover, the 20MA shall continue to act as resistance. Furthermore, price must breach both the Middle 100MA and 200MA BBs to the downside. Both aforementioned BBs are very close to each other at $385, hence, this point is the one that has to be initially broken. A strong break below this point will probably lead price to test support at the Lower 100MA BB at $373. If the latter is broken too then odds will increase significantly to test the Lower 200MA BB support at $354.



Overall: Price has been consolidating. Bollinger bands are compressing. Support must stay intact.

Outcome Probabilities:

Long: On a strong break above $398 – Price Target $410+ | Probability: 35%
Neutral: Price Range $385-$392 | Probability: 40%
Short: On a strong break below $384 – Price Target $354 | Probability: 25%

Our Stance: Maintaining a long exposure, a bit conservative though.

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Price on Btc-e above both the Middle 100BB & 200BB support | 1hr time interval

Outcome Probabilities:

Long: On a strong break above $392 – Price Target $403+ | Probability: 35%
Neutral: Price Range $380-$387 | Probability: 40%
Short: On a strong break below $378 – Price Target $353 | Probability: 25%

---

Price on OK Coin above both the Middle 100BB & 200BB support | 1hr time interval

Outcome Probabilities:

Long: On a strong break above ¥2436 ($397) – Price Target ¥2501 ($408) | Probability: 35%
Neutral: Price Range ¥2353 ($384) – ¥2419 ($394) | Probability: 40%
Short: On a strong break below ¥2346 ($383) – Price Target ¥2192 ($357) | Probability: 25%

---

Price on Huobi above both the Middle 100BB & 200BB support | 1hr time interval

Outcome Probabilities:

Long: On a strong break above ¥2434 ($397) – Price Target ¥2497 ($407) | Probability: 35%
Neutral: Price Range ¥2355 ($384) – ¥2411 ($393) | Probability: 40%
Short: On a strong break below ¥2345 ($382) – Price Target ¥2194 ($358) | Probability: 25%

---

Price on Kraken above both the Middle 100BB & 200BB support | 1hr time interval

Outcome Probabilities: (very narrow price targets due to narrow range)

Long: On a strong break above €311 ($396) – Price Target €318+ ($405+) | Probability: 35%
Neutral: Price Range €302 ($384) – €310 ($394) | Probability: 40%
Short: On a strong break below €299 ($380) – Price Target €284 ($361) | Probability: 25%

---

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@segeln - We are happy to exchange approaches.

With regards to the horizontal line: At the time, price started flirting the Lower 100day Bollinger Band (white BB Line), which was actually identified as a good support area around $371. So if a descending was to be formed, it should have tested once more this support.

If you check a lot of similar patterns, you could agree that: A lower/low can be followed by a tiny higher/low and then a lower/low again (mostly identified in Forex pair actions). That would have supported our thesis.

But of course it didn't, forming a symmetrical... and yes data suggests that the most possible outcome is to break upwards from such formation.

Dear segeln, thank you very much for your valuable input.

Once more, by the time of our writing, internals, especially MACD, did not favour a breakout and price seemed that it could roll over to test $372 again before a final decision. More precisely, our chart and your chart have an approximate 11hr difference. It would have been much more productive if we had exchanged our analysis at the exact same time.



However, indeed it turned out to be a symmetrical triangle with a clean breakout, triggering our long setup at $385. Now this setup is far over and done.

Please note that we do not "predict" nor do we try to prove anyone wrong. Every approach is correct until "Price" decides otherwise.

We never stick to one direction. Our system constantly provides entry/exit points for all possible scenarios and we follow them strictly as "Price" is always the common denominator.

In theory, descending triangles resolve downwards with a performance rank of 10 out of 21 and a 54% pullback rate. Symmetrical triangles, on the other hand, breakout with a performance rank of 16 out of 23 and a throwback rate of 37%.

Therefore, while the formation has been completed, what needs to be seen right now is whether this breakout from the symmetrical is not a false one.

At this very moment, it is significant that the 60min 20MA, at $390 Bitstamp, will not act as resistance.

By the time of writing, formation (in correlation with internal indicators), was a bit tricky. Hence, the "in the making"...

We strictly follow our system for entry and exit points. The "BREAK" above $385 provided a clean setup.

With regards to OP, it depends on how you see it. For a quick setup, it delivered pretty well.

Yup, this is indeed a bad spelling... Sorry for that! 

Price broke upper resistance triggering the Long Probability Outcome. Being in the trade for a quick profit (max target $405-410). Stop at break even. Following strict rules.

Hi everyone! Below is our latest update:




Since the 16th of October, price has been constantly making lower highs and lower lows.

In the afternoon of the same day, it has been evident that the formation had established itself as a Descending Triangle, by testing the same low area $371 over and over again, which also happens to be the Lower 100day BB support.

This price action has been accompanied by a flat RSI, collapsing buying volume and a weakening MACD (at the time of writing). Moreover, stochastic has reversed sharply.

On the long side: RSI must show signs of strength in order to assist upward price movement. On a strong break above the Upper 20day BB at $385, the bullish case will stay intact and the odds will increase for a retest of the Upper 200day BB currently at $410.

On the short side: A strong break below $371 will possibly accelerate selling pressure to test the lower 200day BB at $347.

Overall: The weakening picture previously mentioned is still vivid. With such a low buying volume, some action has to give soon.

Outcome Probabilities:

Long: On a strong break above $385  – Price Target $410 | Probability: 25%
Neutral: Price Range $372-$384 | Probability: 40%
Short: On a break below $371 - Price Target $347 | Probability: 35%

Our Stance: Have reduced long exposure. Will reduce more if $371 is broken with conviction.




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Is this for real?? oh.. and I suppose jgray=Tay More ?

Anyway! Good luck buying that island of yours! 

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On a 24/7 basis, data is recorded from a wide range of time intervals (e.g. 5min, 15min, 30 min, etc) and collected into advanced logical models that calculate statistical probabilities about the next reasonable outcomes.

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