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How to know that Bitcoin price is low and it is the time to buy it right now.

Where is the retrace point we should focus on?

Will we need to search cheap entry point to buy a bitcoin or starts a new bear market?

In this video, which many of you have been asking for. I'm going to explain to you very simply and very powerful and simple strategy as to how I'm looking to buy bitcoin. In other words, I'm going to share with you in this video a very simple methodology and a very powerful strategy as to, hi, I'm looking to position myself to buy bitcoin in the very near future. Also, importantly, I'm going to share with you how to minimize the risk as well in this strategy. Now, before I begin showing you a strategy, I would highly encourage you to please watch the first half of this video because the beginning part of this video going to be very important to set the context. So the first thing I'm going to say is this. There are two main methods or two main strategies as to how you approach a market, especially if you're looking to buy or sell into a market.

 

The first methodology is what's called trend following. Now I'm sure you've probably heard of trend following or trend reversals. Let me explain this to you in the context of bitcoin. So essentially a few or trend follower, the first thing you'd be doing is waiting for a trend reversal in other wards and reversal from a downtrend to an uptrend before you would consider buying into a market. So for example, on this daily timeframe chart of Bitcoin, as you can see here, uh, at trend follower would say, okay, we're going to draw, for example, a trendline. Okay, let me just draw this trendline. We could be drawn by connecting these highs as you can see there. And you could also draw a line across the resistance levels. For example, resistance had these highs and you could say, well, the trend reversed when bitcoin broke that trendline, the Blue Line and the resistance right there on that bar.

Now that is one way to approach it. I would say that's an aggressive way to approach a trend following strategy. And it's not complete. What many people forget is that for a trend reversal? In other words, from a downtrend to an uptrend, you need a reversal, not just on the daily timeframe, but also on the higher timeframe. In fact, this is an article from one of my favorites, chartists and analysts, la little, and he said this in an article in Marketwatch and he said, very brilliant points, which I'm going to read for you here. He said, you need a break of market structure. What does a structure, what you need is a break of multiple swing points on multiple timeframes. That is the keyword here guys, and in fact, to give an example on this, as you can see here on this chart, because what she needs, a break of multiple swing points, low points or high points on multiple timeframes, and that by the way means this.

If you just go back to our charts on Bitcoin, that means the break of resistance on the daily timeframe chart, for example, that was a resistance here. Okay, near just above the 4,000 level, near 4,300 the brick of resistance which occurred there on the daily timeframe was not enough to show a break of market structure or a reversal of trend. What was was a break of swing points on the daily and the Wiki charts. So professional chartists and analysts, they don't just look for a reversal on one timeframe. They also look at the higher timeframe. For example, the weekly charts and the Wiki charts show that you did not have a break off trends or breakthrough structure or resistance until this bar you see here. Why notice for example, on this chart where the swing points are, where the resistance levels, the swing points, where these levels near the 6,000 level.

 

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As you can see right there, I'd mark them here on my charts. Those were the previous important swing points on bitcoin that we had throughout 2018 and bitcoin did not break that swing point until this bar you see here on the 6th of May, right there on that bar. Okay, and by the way, that also makes sense because it wasn't until this bar here that you had two consecutive closes above the 50 moving average on the weekly time for, that's the black line you see right there. It's only until he get two consecutive closes on the weekly 50 moving average that you have a very high probability that you actually reversed potentially reverse trend. And that was also the bar by the way, guys, that bar on the 6th of May is the bar that broke the swing points you see here. So bottom line is this guys, that it wasn't until bitcoin search through and broke the swing points, multiple swing points on the daily and the weekly timeframe that there was a high probability, therefore that'd be probably reversed the trend.

In other words, going from a bear market into a potential bull market. Now I know what some of you are probably thinking and it's a perfectly good question to ask, which is, well, if you're waiting for a trend reversal on multiple timeframes on a daily and the weekly timeframes, it doesn't not mean you might miss the exact bottom or near these bottom levels or the exact top. Yes, that is true. So this is probably a more conservative strategy. But here's the thing. It also means that you're less prone to the risk of failure. In other words, the risk of potential failure at resistance. Because here's the thing guys, there was a strong probability that when bitcoin came up to these swing point levels, it could have actually failed to get above these levels and dropped from these levels. So it was a wise thing to do, to wait for a confirmation of a break and close above these multiple swing points before we could say with a high degree of probability that it potentially reversed trend.

And in case some of you are probably thinking, well it doesn't that mean you might miss the exact bottom and the exact top yes by remember guys, as I explained in the interview with Peter Brendt, no trader or investor can possibly get the exact bottom and the exact top. All we're looking for is that chunk in the middle, the 60% okay, let me just write this down. This 60% chunk in the middle, if you think about it like a sandwich, we're not looking for the carbs, the top bit and the bottom bit. We're just looking for the meat in the middle. So if bitcoin say went up to 50,000 or 100,000 who cares if we didn't get the exact bottom where the exact top, all we want is that 60% bits or the meat in the middle. So let's go now to the second strategy. The second strategy is what's called value trading or value investing.

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In this section, I'm going to share with you when I'm looking to buy Bitcoin, but the good thing is in this section I'm going to explain to you how we can combine both value and trend. So the strategy is I'm going to show you combines the best of both worlds. We're combining trend following with value at the same time. Now, before I explained to you that methodology, I want to first of all show you this diagram because this actually explains my point much better. In a trending market, usually price moves in a kind of a staircase pattern, which I'm sure you're familiar with, Marcus. After they make a reversal after to make a reversal of a trend, they usually move in this kind of a staircase pattern that you see here. So markets go up. Then they pull back to an important support level and then they bounce off and then it pulled back and then they bounce off and so on and so on.

Or a series of higher highs, higher lows, which of course distinguishes a trending market. But what's also important to know about a trending market is this. That is very important that we protected against risk because every time we're considering to buy the pullback, so for example a trend trader, we'd be looking to buy the pullbacks to support, but all trend followers and trend traders know there's a strong risk of loss because there's a strong probability that the next time we look to buy a pullback price might do something like this like you see here. So you think the price is going to make a pullback and then what does it do? It doesn't hold the support and then suddenly drops further lower and that's why we need to be mindful of risk and to know we are protected. That means as a trend follower, if I'm looking to buy at the next pullback to support, I'm going to put a stop loss beneath the previous low point, so if the price does something like this, I am protected against making a significant loss.

All right guys, let's take a look now at this particular strategy. As you can see here on my chart, I have these moving averages. Now you might've seen these moving averages on my chart before, but for those of you not familiar with moving averages, I usually have at least three or four moving averages on my chart and these are the ones you see here. 2155 and 100 exponential moving averages or EMA and the 200 moving average. And this is what's important. I need to have these moving averages lined up in this direction. 21 above the 55 55 about 100 and the 105 to 200 why like this? Because when the moving average is aligned up like this, that's a key distinguishing characteristic of an uptrend or an uptrending market. And here's what's important to appreciate that. In an uptrending market. What usually happens that when you have these moving averages lined up like this, usually price comes down to the 100 moving average.

For example, the 100 exponential moving average and holds this level and bounces off. In fact, as you can see here does happen many times before foreign bitcoin. Let me show it to you on this chart because it shows too much more clearly what I'm talking about. Notice in 2017 for example, how many times in a trending market price came down to the 100 moving average, bounced off, came to the 100 moving average, bounced off and rallied, came to the 100 moving average, bounced off is you can see your hell. This level bounced off. Boom, that came up to 100 moving average and bounced off and so on and so on. And by the way, this does not just happen on bitcoin. The happens on other markets too, like gold. Gold did exact same thing during his uptrend in 2010 and 2011 and by the way, guys, one more thing to mention here is that a 21 weekly moving average to 21 weekly EMA is usually about the same price level as the 100 daily moving average.

So price is a habit of touching and testing the 21 weekly moving average as well. As you can see here, this happened on bitcoin during 2017 notice how many times it held this level bounced off as you can see here from the 21 weekly moving average. All right guys, let's go now to the charts off bitcoin. Now, on this chart of Bitcoin, which I have in front of me right now, I have, as you can see here, the 21, uh, daily moving average, the 55 daily moving average and the 100 EMA and the 100 SMA to 100 simple moving average. There isn't why I have both. The 100 EMA and the SMA is because sometimes price can come down to either one of these levels. So we don't know which one of these levels might get tested. And what I'm looking for is a potential pullback down to the 100 EMA us, the orange line you see here, and the 100 potentially the 100 simple moving average.

So that's the kind of levels I'm looking for for a potential pullback on bitcoin. By the way, there's another level writing between these moving averages, which I'm looking at, which is the 5,880 level. That's the red line you see here. Why is that level important? Because that's the level that bitcoin has tested before. Many times, if I just pull back this chart, you'll see why that is the level that bitcoin tested many times during 2018 you see right there. So it's potentially possible that bitcoin may come back down to test that level once again, which by the way, it comes very close to the 100 EMA and the 100 SMA. So just zooming in on that section of the chart here. So what we're looking for is a potential pullback. Let's say for example that bitcoin where to drop from here, and of course we don't know if bitcoin is going to drop down from here, but let's say you did, let's say bitcoin sort of the pullback either from these levels or let's say from higher levels.

Let's say bitcoin is sort of the pullback down to the 100 EMA. So I'm going to start nibbling on a small position near these levels near the 100 EMA. And if I were to continue to coming lower, for example, down to the 100 SMA, I'm going to start nibbling and to starting a small position at this level as well. In case you're wondering why a small position, there's simple reason is that there's a why. There's a probability that bitcoin may hold these levels. There's absolutely no guarantee or certainty that bitcoin's going to hold these levels. There is always a risk that bitcoin may not hold these levels and may just continue falling, right guys. So there's always a risk and possibility of anything happening. So remember guys, all professional traders and chartists are always mindful of risk, which is why I showed you this chart a moment to go.

Because if this happens, if price were to pull back and drops further lower than we expected, we need to be protected against the risk. That means this, by the way, that means if I'm looking to buy at these levels again, the 100 EMA, 100 SMA and this red line and looking at here, then I'm going to have a stop loss just beneath these lows beneath the lows that bitcoin formed here back in April, uh, which is about the 4,800 levels and we just beneath these levels here. Why? Because if bitcoin were to drop down to these levels and continue dropping, then at least we're protected against risk. Now let's say for example that bitcoin worth to drop down. Let's say bitcoin did drop down, whether these levels or higher levels, and let's say it dropped down to these levels, the 100 moving averages and let's say it held these levels and then bounced off that level.

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And if we want to bounce off these levels, then I'm going to start adding to my position because then I have a clear indication that there's a probability there's a higher, probably the bitcoin is holding these levels and may start the new leg higher towards the previous highs. So this essentially is a very useful and simple strategy which a trader could use to combine both trend following and value at the same time but also to control the risk as well. Our guys, before I finished the video, I just want to say three things very quickly. First, there's no guarantee or certainty the bitcoin is going to fall down to these key moving averages or they support levels. There is a probability, but there's no certainty. The second thing is there is no certainty the bitcoin is going to hold these key support levels, which is why I mentioned the importance of stop loss and a final thing is this video is not a recommendation that you should also buy bitcoin or they should also follow the same strategy. I'm just letting you know this is a simple strategy that I quite like. Now, whether you decide to buy bitcoin or follow the same methodology as a matter of completely up to you, but the more important thing is that whatever we decide to do, we need to remember that there's a very strong and significant risk of loss and we need to protect ourselves against those risks. All right, guys, hope this video helps. If it has, please give it a thumbs up and also please subscribe for future updates.

  • Results may not be typical and may vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk
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