Crypto Trading Advice
Pertaining to "gap fills" or "market inefficiencies" I'm generally more concerned with more local gaps. My experience has shown me that when dealing with local breakouts, something within the range of a 2-3 month trading period, gaps or inefficiencies work well as predictive levels for the purposes of profit taking or potential entry.
That's not to say that on the macro scale you can't see this same dynamic play out, however, in general, I find that less 'tradeable' than focusing on recent activity. "Start on the right side of your chart and move left."
If you were looking for fundamental reasons why price is likely to re-test a certain level, whether it be on the macro or meso time frames, market gaps are good confluence. Keep in mind though, whenever we try to 'predict a price level' we are assuming a lot.
- That we know what current market participants are going to do and when.
- That we know what future market participants are going to do what and when.
- That we know when new market participants will enter the market.
- That all things remain equal as currently stand with respect to historical data.
The reason I point that out, is because it's good and helpful to have 'predictive levels' on your chart, but always remember that they're only a guess. It's someone's opinion of where price might go based on current information, which is incomplete data as the market changes every day. It only takes a few fat-fingered traders to dramatically shift the market structure, in an asset like Bitcoin for example. Let your predictive levels give you ideas of when to react, but let your strategy, whether that be price action or technical indicators, guide your trading decisions
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