3rd Time's the Charm?
Sometimes she gives you a bunch of chances to be right. Or not.
I started the day with a bunch of different bearish harmonics after getting stopped out on a short and thought it might be a good shot at a snipe! The patterns:
Black Swan on the 5min
Butterfly on the 5min
Anti / Deep Crab on the 15min
You can see them here:
So, I put a short order in @ $41,500, hoping for a 3rd desperation wick before the fade. Whiffed and didn’t catch it. I shared a little of this on Twitter and I thought I had missed my chance at a quick win:
But, she drove up and the volume wasn’t impressing anyone so I gave it a 3rd attempt! Perhaps she was going to give me a humpday present and a third try at being right! I don’t mind if I do. I put a short order in a bit lower @ $41,200 and it filled after 3 attempts which meant that there was a lot of downside pressure.
I like the confirmations so far.
But, I was aware that the DXY was dumping and I planned to be cautious:
And there’s a bit of an inverse relationship between the DXY and bitcoin so it’s worth tracking and even charting this. Hell, if you want, you could even trade it and you could make quite a snag. I don’t but you could.
So, let’s go, shall we?
A tight stop loss right north of the local high and then I’d babysit this for the next hour and watch it do the magical dance down south. Why? Because not all harmonics play out and we know that there are larger bullish drives on larger timeframes that are still very much in-play (or being validated).
This 15min Nen Star got recked by some MMs who wanted even more liquidity:
If you had traded that you might have had a soft exit (and still one to come later perhaps) but you would have been stopped out immediately and given free lunch money to the big boys and girls.
But, thank the Lord for stop loss safety, right? Keep it tight:
And as things punched higher I actually laddered in:
And I put in an order for a last-minute top-side raid:
I put this short order in @ $41,400, just in case we got that grand scam wick and then I updated my stop loss (which was now quite heavy on the downside) but I simply didn’t see volume trending in a positive direction.
A few moments later the short squeeze was on with the massive wick that I was hoping to see conclude this run so we can start our glorious fade:
Clearly a massive raid to the upside and I quickly began to update my thinking around stop loss and where this could all go horribly wrong (or invalidated).
She dove back into profit territory as the harmonic continued to hold and a bearish Gartley appeared on the 5min and a Black Swan on the 15 after that massive wick:
Now all I could do was hope that she was finally ready for that fade. She toyed around the level for a bit and I started getting pretty anxious as there were some levels 500 points above — around $41,700 — that could quickly be validated and provide a strong upside swing. My entry point, which was now @ $41,270, was clearly a growing pivot point and a lot of orders were flooding this zone.
If we could break below then the gap would be filled with red. If not, say goodbye to $41k-landoooooooooo. Consequently, I figured that if I could put a stop just below entry that I could save myself a raid and eventual invalidation if someone fat-fingered the buy button.
I waited patiently to get a dip, got it confirmed, then put in a backstop:
Things continued to look good on volume too:
Now, it was time to plan an exit strategy! The best part, of course. I didn’t want to give up too much space and leave money on the table on a reverse bounce to the upside but I also didn’t want to lose out on a deeper fade. I decided something in-between and put in a take profit order @ $40,444 and I’d keep a bit more for luck.
Even though these harmonics could stretch much, much deeper the reason I wanted to close out at this price was because the larger bullish structures are still active. As a day trader I just want quick profits and then to get out.
Remember: Profits build portfolios, nothing else will do the trick. Take what you can and be happy as greed kills so many traders in this game.
As things progressed a bullish Shark appeared on the 15 with a PRZ of ~$39,800:
This presents both an opportunity for an exit on the short but also a long on the bounce, if it validates and finds confluence with some other harmonics or accumulation sequences; check the fundamental oscillators, of course!
This is always useful because it really helps to level-set targets for profit taking! I’m always grateful when she provides a little guidance. Possible exit around that PRZ? Why the heck not:
Now I would babysit this until completion or until I see invalidation to the upside. I put the order in and then I’d toggle this as-needed:
Would I get the results that I wanted? Would she reward me for this 3rd attempt? We’d have to wait and see and probably have to sit through a bunch of ups and downs because she really likes to make you earn your bacon.
A bullish Butterfly on the 15min showed up a bit later as things progressed providing a possible PRZ of $40,500, or thereabouts. That might end up being a better spot to pull profits, especially on a shorter timeframe.
I’d continue to watch it and hopefully see it fade beyond $41k. I put in an order for $40,555 and hoped for the best:
A few hours later and nothing much happening, I decided to put in some final entries for stop loss and profits so I could head to bed — we’d see the results when I wake up!
When I woke up one of the scenarios worked out and the other didn’t:
She stopped me out before dropping to my target. I had to take the L:
There aren’t many lessons learned from this other than the stop that I had put in was clearly a bit “too tight” and I could have given it a bit more breathing room. But, on the flip-side, she could have launched into orbit and eviscerated me anyways.
The point is that in trading you never really know the direction that things will ultimately play out and it’s all intelligent estimations.
Today will be another day and another opportunity. It’s entirely okay to spend a full day on a trade only for it to be a loser. If you’re not prepared for this reality then you can’t do this job and this type of work.
To infinity & bitcoin,