Bitcoins low risk from a trading perspective:
Short-term traders appreciate volatility. Bitcoin is liquid and not choppy. A long-term trader’s biggest fear is six sigma events. Consequently, any time the market is closed, more significant holdings are at risk of surprising news resulting in gap openings. Professionals go as far as to close out positions that are not in the green yet on a Friday after a trend-down day. The statistical fact is that on Mondays, market reopening, the downtrend is likely to continue. We have just recently witnessed that phenomenon in the flash crash of the gold market. They cannot take such weekend risks easily. With bitcoin trading 24/7, it is a much risk-reduced investment tool.
Bitcoins low risk from a fundamental perspective:
Any centralized instrument is attack-able. May it be by technology or legislative. We had times of gold being confiscated, even illegal to own.
In the recent trading behavior of the precious metal sector, we can see that it might not be wise to put all your eggs in the golden basket alone.
Bitcoin/Gold comparison, Weekly Chart, Bitcoins relative strength towards Gold:
Bitcoin/Gold comparison, weekly chart as of August 17th, 2021.
Like with everything else, it is wise nevertheless to keep an eye out for a few pitfalls. One of them being a misrepresentation of bitcoin measuring against a fiat currency. With fiat currency losing value, it is more accurate to compare against gold. The chart above shows how bitcoin gained strength towards gold and, as such, notoriety in its value.
BTC-USD, Daily Chart, Adapting to hurdles:
Bitcoin in US-Dollar, daily chart as of August 17th, 2021.
Another essential part of keeping bitcoin your low-risk wealth preservation of choice is adapting to its unique trading features. Bitcoin is deceiving with its significant retracements-grabbing stops for those too greedy, and once it turned it is hard to get in as bitcoin speedily advances steeply. What is essential here for the trader is not to be insisting on a time frame, but rather be on the lookout for a variety of time frames to find low-risk entry spots and profit-taking target zones.
It typically remedies what we call the emotional yo-yo effect. Market participants feel at ease when the bitcoin market declines to say to themselves: “I knew bitcoin isn’t worth a thing.” Days/weeks later, when bitcoin turned sharply and advances steeply, they find themselves in a state of a feeling of “missing out” in disbelief of the significant move they just missed.
The daily chart above illustrates bitcoins behavior in this aspect—quick steep advances represented in Heikin-Ashi charting format (color green). In addition, we can see on the standard deviation cloud indicator how bitcoin is compared to most other instruments, able to be suspended to extreme deviation for extended periods. The last turning point up produced a sixty-four percent move up in less than a month.
BTC-USD, Daily Chart, Prepping the trade:
Bitcoin in US-Dollar, daily chart as of August 17th, 2021.
In our last chart book published, we posted a chart with various likely future price movement scenarios. Now, we are expecting a high likelihood of the second scenario of A (white line) to unfold. The daily chart above describes this scenario from last week now in more detail.
We enter a low-risk entry, at the supply zone of US$39,450 to US$41,240. The fractal volume support zone is only of interest to us, with prices declining from tops between US$50,875 to US$47,230.
Your low-risk option is Bitcoin:
Bitcoin, which by the way, is not that young of a market anymore, gets a low rap also because it caused a whole movement of other seemingly decentralized altcoins. At the mass internet adoption, we have seen a similar effect with penny stocks that went to zero, giving fuel to critics. Thirty years later, we do not have to ask you if the internet itself is of value. We see the first steps in motion of a mass adoption of bitcoin as well. Your risk is now listening to critics’ unfounded doubts over facts that point clearly to a future with a very high probability of bitcoin taking a central role in the financial market worldwide.
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By Korbinian Koller|August 17th, 2021|Tags: Bitcoin, bitcoin consolidation, Bitcoin mining, crypto analysis, Crypto Bull, crypto chartbook, crypto mining, low risk, quad exit, technical analysis, trading education|0 Comments
About the Author: Korbinian Koller
Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
