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Week 2017-12-04 (early) Bitcoin - NFP

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This Week:

Japan 10 year bond auction will give an indication of investor demand at low rates.

Then we have the Non-Farm Payrolls data. Good for a chop, it is unlikely to create a move in markets without the Fed actually indicating that they are going to raise rates. So chop it like it will revert, because it will.

NB: I will be on a long haul flight during my usual posting time. I thought I`d post early so that you don`t have to wait for my flight to be re-directed around the Bali volcano ash cloud to read this.


"Sell rhino horns, buy fishing lines." - Jim Sinclair

Bitcoin 2017-11-30

Bitcoin went exponential. The hype is high in this market, and even Jamie Diamond has stopped talking down bitcoin. So the market is filled with speculators with dollar signs in their eyes prodded on by people that just made some money. This makes for plenty of weak-handed investors. They freak out at a flash crash and puke when price action seems to turn lower. That is good for value buyers when price hits levels that they feel comfortable entering the market. This price action then leads to consolidation and a move higher.

Bitcoin still has more upside potential. Bitcoin is still a good investment. However, a good entry price makes a person comfortable in their entry and happier at higher price levels. So look for pullbacks for good entries.

Damped Harmonic Oscillator and expected moves

When I see a price go exponential, I look for an exit. When price moves lower, I look for the re-entry. On the spike lower, if I missed the initial move, then I look for a re-entry below my exit price. This week, that was easy. However, as price action moves to that spike level, it is consolidating price which means that it will often move below that level. So then I wait to get a better re-entry price. I often expect 2 taps on a level to hold and a third tap on the level to plow through (not a precise trade recommendation, however). Once price consolidates at that level, a break below that price will force weak longs to again sell, driving prices lower. That is what I am waiting for in my re-entry price. If I miss it, then I am buying back in at a price near where I sold out so I am not actually loosing. That is how trading works.

If the level holds, in decent volume, it implies that value buyers are looking to enter at these levels. With so much speculation in bitcoin right now, every pullback seems to be bought. This implies that some of the BTFD traders have switched from share markets to Bitcoin markets. So expect higher highs and continued flash crash spikes lower.

If you are trading this market, and all the wonderful volatility, you should do so while holding a core position. If price moves against a recent exit sell, and you have made a mistake, your core position is still making money. If you have sold a small portion of your position (presumably at a profit) then you have not lost anything on that attempted scalp of price.

If you are not good at staring at a chart slowly ticking away for hours, hence not a trader, it would be best just to buy-and-hold a position. Put in an entry price as a limit-buy and wait for price to hit. Then dump a limit-sell order into market where you would be comfortable to exit. In a market moving higher on speculative demand and limited supply, such a trade is really a no-brainer.

For anyone investing in bitcoin or using their own crypto wallets, here is a great article that will explain how the wallet addresses work so that you don`t make a rookie mistake and lose your money:


YOU ARE AN ADULT and must make your own decisions. ONLY YOU know what level of experience you possess. ONLY YOU know what level of risk you are willing to take. ONLY YOU know what your financial goals are, and to what lengths you are prepared to go to meet those goals. You will be the one to wear your losses, so trade with caution and do your own research.

Henry Ledyard is an independent trader. He has NO affiliations with banks, brokerages, funds, trading houses or markets. He trades for himself and posts trading ideas merely to share information. He does NOT want your money, advice or opinions. He does NOT want your unsolicited emails. If you require further financial advice, seek it elsewhere. Henry`s opinions should be considered as addled as his blog site:

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About the author

Henry Ledyard is a futures and options trader with over 20 years of trading experience and over 10 years of experience in trading futures. Henry Ledyard holds multiple degrees: BE Electrical Engineering, BS Physics, and BA Visual Arts. He has worked as a prop-trader (AU bonds, USA bonds) but found the bond market not conducive to his trading style. He currently trades for himself, and has no associations with any brokerage or firms. He has no boss and seeks no money for his information and trade ideas.

Henry’s trading focus is primarily on futures with longer term trades (hours to days) in tangibles (commodities and equities) with a real world bias. This is because high frequency trading algorithms are in control of much of the arbitrage trades and short term volatility.

Henry is predominantly a chart reader who looks for direction changes to enter and exit markets and is not a trend follower or scalper (much). His trade ideas are based on broader market forces creating opportunity while focusing on over-sold or over-bought moves. To make money in markets, he has to combine timing, direction and risk which can be a challenge (and may not suit your trading style). He is not an FX trader, nor stock trader (mostly) and tries to avoid bond markets except as a spread for other trades. He also avoids ETFs and many derivative products because of exaggerated leveraged moves.

Henry is based in Sydney, Australia and normally trades EU pre-market through the USA session with the occasional eye to Asia trade for indicators of direction.

The trade ideas expressed by Henry are places he sees potential for profit and may be as addlepated as his blog site:

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