Bitcoin Trade to $23,247 Is 'Live'

I put out a bitcoin trade in the chat room Thursday night that has since produce a substantial theoretical profit, but I want to emphasize that all of my bitcoin recommendations are intended for the time being as paper-trades. We can segue to real-money plays when two conditions have been met: 1) subscribers have become thoroughly accustomed to the ‘mechanical’ entry tactic used to get aboard; and 2) the markets in various bitcoin trading vehicles have become tighter and more liquid. (Note: Although the symbol $BRTI itself is not tradable, it accurately reflects bitcoin’s up-to-the-second price, displaying as it does the best bid/offer reported by participating exchanges.)

A Risk Worth Taking

The recent trade is shown in the chart, although the original entry price and stop-loss were changed when $BRTI created a second, higher, point B. Entry and exit points are shown and assume four contracts bought, then two exited on the initial rally to the midpoint pivot at 11717.  The trade is therefore still ‘live’ in theory, with an order to exit a single contract at D=12733, o-c-o with a 10700 stop-loss for the two contracts that remain. If 12733 is hit first, the final contract should be held for a swing at the fences, since my big-picture target is 23,247.  The x-to-p ‘mechanical trade,’ where we attempt to catch a ride merely to p rather than to the pattern’s D target, begins with a seemingly unappealing 1:1 risk reward. However, when used in conjunction with a strong impulse leg, the trade has been working so consistently that we can afford to “go out on a limb.” In this case, notice that the trade worked even though the set-up began with a weak impulse leg — i.e., one with a finishing stroke that did not exceed any prior ‘external’ peaks.

Price action in bitcoin vehicles may seem too crazy to trade, but our tactic of reducing the wild swings to simple A-B impulse legs is designed to help visualize the risks and put them in precisely manageable perspective. Another key feature of ‘mechanical’ trades is that entries are accomplished using limit orders rather than with buy-  and sell-stops.