You Can Always Trade the Range
Hello degens!
Last night I had a blast clearing a few snipe shorts back-to-back! The first I shared in the previous newsletter and the second was literally just a few hours later as bitcoin grinded back up slowly.
My hope was that she’d break-up in a spectacular way but when the RSI hit over-bought and volatility was low, I knew that any bounce wasn’t going to be enough. Another fade? Let’s go. All we needed now was some harmonic confluences which suddenly appeared on the 1min and, as a day trader, you kind of live for these opportunities for quick, solid wins.
And since the last fade worked out pretty well, we could probably do it again. Then, a wild Ant-Cypher into a bearish Crab / Gartley? Let’s go!
I got a very solid entry near the top of the local high @ $40,222:
I didn’t know precisely how far we’d go but since I had a pretty decent entry I could backstop in profit pretty quickly:
Stop losses are an absolute must in this high-volatility asset because even on slow days you can get 300-500 point moves in just a few minutes. A Black Swan on the 5min appeared a bit later and confirmed the dive:
I could now more clearly see the range — or Darvas Box — that was being used, first on the 1min and then the 15min:
Tight and compact. With leverage, you can get some decent bags.
I was secure in my stop loss and just waited for the fade to continue and for profit to accrue. I had actually had even more short orders but they weren’t picked up on the little rebound off the selling climax.
Again, this is why we degens trade bitcoin and why one should trade volatile assets! You can score decent-sized wins on short timeframes if you can do your work properly and timing and luck is on your side!
One of my favorite quotes is from Mark Douglas:
The patterns repeat themselves with consistent, statistical reliability but the outcomes that the patterns predict are almost always random.
So very, very true. So, you do what you can to be conservative and safe and get as many congruent signals that you can so that you can pull of great trades while having maximal downside protection. You can’t be perfect on every trade and you have to expect losses every once in a while, of course, especially if you’re going to day trade crypto.
Small time frames like the 1 to 15 minute means that you’re subject to massive and unexpected swings in the opposite direction of your trade, usually because of larger forces at play and even larger representative patterns.
For instance, I’m still waiting on the bigger timeframe bullish harmonics but she’s really just taking her sweet ass time! In the meantime we can still trade quite successfully.
I ended up going to bed putting an order to exit at $39,555 — a simple range that, with a little effort, could get hit while I slept. I woke up a few hours later only to see that I missed the target by a 100 points or so and stopped out:
At least I covered my costs of entry:
I guess we’re going up now degens.
To infinity & bitcoin,
— 8ɃIT