Key Bitcoin Price Levels and Trading Update for Week 2 (5 – 12 Jan) of 2014
The Bitcoin price is exploding right now!
As can be seen on the daily chart, a long green candle is forming on the 5th day of consecutive gains.
This is good news for all of us with long positions. I added the final portion to my long position on Friday the 3rd as the Bitcoin price cleared the key $800 Support / Resistance level.
As price has also blasted through the 76.4% Fibonacci line (dark blue), I see no obvious resistance until $1000. This is the level of the previous fractal high as well as a big round number. Following this reasoning, I’ve set my first profit target to just below $1000.
A mention of the Moon Phases – they last 5 really have worked out surprisingly well! If you access my (or the) interactive Bitcoin price charts on Trading View, you can go back further in time and examine the moon phases around major price peaks and falls. Another trader, z-Tau, mentioned Moon Phases have been significant in previous bubbles:
As there’s always correction and consolidation within a trend, I’m hoping the trailing stop won’t yank me out before the trend is complete. “The trend is your friend until it ends,” as they say. The plan is to close only a portion of the position if the stop-loss is triggered, except if it happens on particularly gloomy news.
Should I get a signal that the trend is running out of steam, a negative MACD cross perhaps, that’ll be another opportunity to take profit.
Although the trade is working out well so far, I was less sure of its success when I opened the first third of my position ten days ago. Had I gone all-in at that point, doubts would inevitably have surfaced over the five days where price fell back and flatlined. Although I’d currently be deeper into profit if I’d risked it all, those doubts may have led me to second-guess the trade and eject before it took off. This is why I prefer to ease in and out of a position as the market proves its direction at key levels. It’s a strategy which helps me deal with my own mind as much as the market.
Some traders advise that you should only trade when in a calm, clear-minded state. Generally this is true, although it’s impossible to entirely eliminate emotion from trading. In fact, neurological studies indicate that if the brain’s emotional centres are disabled, the mind is incapable of reaching any decisions at all. Without the motivation of risk and reward, logic founders. I suggest being conscious of your emotional state when trading and compensating for it. For example, if you feel strongly positive on the market, force yourself to listen to the grumbling bears and consider their case. This will keep your outlook flexible and prepared for the market’s endless surprises.
