The author saw and experienced many times already how the market is tricking us (the participants). Sometimes it even feels like the only reason for the financial markets to exist is to deceive the people. Especially true when one believes that the price will just continue in the current direction. As soon as you see around this kind of sentiment, alertness is required.
The move (down) we see now in ETH was needed. For the same reason, to deceive the traders. Now they are a bit scared to go long. Though it’s most probable the right idea. If not right now, then may be tomorrow. However, even after the possible rise right up to the 0.024, the next move will most probable be down again.
Ok, enough words. The charts basically remained the same as in the last post with graphics.
We will look into the updated version of BTC today. And tomorrow in the evening we will check the ETH.
After the initial 5 waves down we see the nicely formed double zigzag (w-x-y). The move thereafter doesn’t really look like the 5 waves down, so it opens door for several interpretations for the short-term. Based on the fact that corrections are many in shapes, it’s pretty useless activity trying to find out which one exactly is under development right now. The most important message is: BTC should continue decline and go under 560 USD. This decline can happen from the current level or BTCUSD can rise to slightly above 700 USD and then fall to the mentioned goal.
If you are indeed in this trade, keep your position size accordingly. Because this bearish case will be invalidated only if BTC will go above 790 USD. This level is quite far away now, so your position size should reflect this SL (stop-loss) level. As we are in a money management topic in this post, the author would advise to calculate the position in a way, that you never lose more than 5 % of your capital in one trade. If you can really manage the emotions, connected to the risk, you could try 10 %. If your emotions are too strong and prevents you from “trading your plan”, decrease it to 2 %. Find your risk level. Otherwise you will burn out your nerve system pretty fast. And then you will start looking for the reasons somewhere outside. May be market manipulators will suddenly appear as a reasonable explanation, may be the author of this blog gave your poor trading idea or may be something else. In the reality, however, it was just too much risk, which wasn’t controlled. Poor money managment is almost always the reason for the failure.
No idea why we went into this area. May be it is a sign the author needs to stop writing for today and go sleeping. Or may it’s time to do something beyond the scope of just Elliott Waves analysis. Time will tell.
Take care. Till tomorrow.
The Elliott Wave Principle describes the behaviour of the financial markets. This Principle is build on the mass psychology swings from pessimism to optimism and back in a natural sequence. When these swings happen, the specific Elliott wave patterns in price movements are created and become visible. Each pattern has implications regarding the position of the market within its overall progression, past, present and future.
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