Price has tested near the range low and established a price point at 8830. This stopped us from a recent swing trade idea that we shared around the 9625 area. As most novice traders will consider a stop out a negative event, we actually look upon it very positively. Why? Stops SAVE money in the long run.
What if Bitcoin went to 8K on some news? I can’t tell you how many times a stop loss order has saved us tons of money. If you get frustrated by a stop, that is a sign that you have not been in this game very long. Another thing that makes the stop easier for us to manage is we only had 1% of our capital at risk. Often traders misunderstand sizing and take positions that are proportionally too large for their account, making a stop out much more painful financially AND emotionally.
On Monday, our criteria for a new swing trade long was met and it became active upon the break of the 9225 level. Since then, it has been somewhat noisy, but this is in line with the character of a consolidation. What makes this position compelling is the fact that price found support off the 8830 area and did not even come close to the 8500 inflection point (sign of strength). Secondly, the reward/risk is much better since the position was taken closer to the range low rather than the middle of the range.
Testing the high 9Ks or low 10K area is reasonable and our initial target is strategically placed with this in mind (we use 3 targets). Can Bitcoin still fail? Sure, but a lack of momentum should NOT be confused with the nature of the broader trend which is BULLISH. In order to change our outlook, price needs to first compromise the 8500 support. Until then, we will continue to focus on managing risk and placing greater weight on buy signals, especially if they appear near key levels.