This is the chart I am following as a Main plan on BITCOIN:
I am always using Elliot Waves theory and other market tools in order to trace my trading plans but, of course, before you complain about it, this is only a theory among others and so it cannot be used as we use the Newton’s Law.
Elliot waves tries to forecast the future by analyzing the psychology of the market, how the emotions affects the trading behavior in a more or less steady state situation regarding events. But those events not always are predictable and there is always a big uncertainty component also about when these events happen…
Did anyone know in advance the “last drama of Bitfinex and Tether“? , surely there must be a few who knew it in advance and so they probably reacted before you…but, they have been really an exception because no one has the magical Crystal Ball in order to see the majority of the big events coming in advance.
That’s why using the Elliot Waves Theory and other trading Tools are always better than waiting for the events to happen, because when they happen it is already late for you…Independently of your strategy, plan, tool, theory or speculative rumor , you must use always the STOP LOSSES tool in any trading you do. It is like your insurance policy even if you are a strong HODLR, and specially when working at CRYPTOLAND. It is indeed a mandatory rule.
These are the steps I follow in order to “sail the waves” :
1) Do your Own Research: you can follow trading examples and plans from others but do not buy anything only because someone told you that, take it as an alternative to investigate for… study the project, the use case, the supply, the volumes…contrast your opinion and reach a conclusion then, decide yourself.
2) Besides the Fundamental of the project you are studying on, you should ask yourself if investing on a particular altcoin may give you more returns than simply putting the same amount of money on BITCOIN and “sail BITCOIN waves” instead.
The following are the daily charts of HOLOCHAIN versus BITCOIN and versus USD:
Both charts suggest a bullish action but the first chart is the key. It is really at the limit of the validity of the Elliot Waves count while the second seems to be growing within an ascending triangle.
HOLO seems to have potential in short term but, would it raise because investors are interested on it or because BITCOIN will raise and so the price in USD will raise in every altcoin?
3) Plan your Buy orders and your EXIT plan in advance, if possible use Elliot Waves here to forecast in which point the market is.
4) Put your STOP LOSSES conveniently depending on:
– Historical Volatility
– any Indicator you like to use or your own EW count or FIBO levels
– Your RISK appetite or your maximum percentage of losses you would accept.
5) Plan for a review of your STOP LOSSES in a regular basis, depending if you are a HODLER, a weekly trader or a Daily trader you should check and update them, monthly, weekly or daily. Of course, if you want to be a professional trader, the time-frame may be hourly but, for the common cryptotraders I think that once a week is much more than sufficient. Independently of the time-frame, commit yourself to do it in the arranged date.
Continuing with the example of HOLO, a project which I have investigated a lot and on which I am very interested on. Below my plan, this is how it looks today:
As I said, on the HOLO/BTC pair the EW count is at the limit of the validity, I bought HOLO two times, and still I did not sell any position but, the second time I bought it is almost reaching my STOP LOSS order, placed at 22 satoshis (I bought at 26)…With that order I am assuming a maximum of 15% of loss, which in this case I considered acceptable for me.If finally, the SELL Order is triggered due to the STOP LOSS I should reconsider again the plan for my re-entry points.
As a summary, this is one of the most important processes when buying and selling crypto, to set your STOP LOSS orders and review/update them in a REGULAR basis, which in my case is weekly.
Updating your STOP LOSS orders allows you to consolidate your profits as well as it helps you to reduce your stress.Hope this helps.
*Disclaimer: This is just my personal point of view, please, do your own assessment and act consequently. Neither this post nor myself is responsible of any of your profit/losses obtained as a result of this information.Published on