EC Bitcoin, Reinvent Yourself

We recently got asked why we were super bullish in last week’s chartbook and now we align with the bears. It's flexibility, which required to align with the market and its behavior as a trader. Otherwise,

There's a phenomenon that after you buy a blue car, you seem to see ten times more blue cars in traffic than before. A neutral mindset is necessary for correct perception. We need to reinvent ourselves every day when stepping up to the plate. Each market movement is unique, and only with the slate wiped clean, is proper market play possible. Bitcoin, reinvent yourself.

The weekly snapshot taking isn’t picked at random

Each trade should have at least three timeframe components.

  1. A trade setup time frame where the edges get stacked, and risk/reward is determined, with targets and a stop level.
  2. A time frame higher than the setup timeframe, which needs to confirm trading direction. If you have a long entry set up on a daily chart, but the weekly chart has a downtrend of price, this setup is invalid and should therefore not be executed.
  3. And an entry time frame is the next lower time frame below the setup time frame, allowing for more precise entry timing and stacking odds to minimize risk.

For example, suppose you are a position trader with a typical holding period of 2-4 weeks. In that case, you are looking for a trend on the weekly chart. Find a setup on a daily chart in the direction of that trend. And fine-tune the entry on the sixty-minute timeframe.

This makes the weekly chart a part of even the largest time frame market participants and day-traders should not ignore its trend, hence our choice for weekly publications.

BTC-USD, Monthly Chart, Monthly time frame for direction:

Bitcoin in US-Dollar, monthly chart as of July 20th, 2021.

Bitcoin in US-Dollar, monthly chart as of July 20th, 2021.

One of the best ways to reinvent yourself, meaning to get in a proper neutral state, is finding a relatively quiet trading spot within the 24/7 Bitcoin trading environment. Or even better, turn your real-time data feed off so that the charts can not stimulate you with movement. Start with the largest time frame from your triple time frame set up and get a sense of the long-term direction (sideways, up, steep up, down, steep down) and only consider setups in the time frame below (the setup time frame) that follow this direction.

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Disclaimer: All published information represents the opinion and analysis of Mr Florian Grummes & his partners, based on data available to him, at the time of writing. Mr. Grummes’s ...

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William K. 5 days ago Member's comment

Easily tied for the "most jargon" award.