Ethereum USD - Morning Update - 7 Jul 2017: Understading Context Before Deciding What To Do

Why entering a trade when you have no clue of the overall context ? Here's a preview of what I do when looking at a coin and trying to understand context from the technical side.

Two months ago, since the beginning of April, Volume Profile chart shows ETH @ $48 was the most accepted price. Late-April to mid-May saw ETH value increase to $90. Almost doubling its price within less 3 weeks time. The last 2 weeks of May ETH value went from $90 to about $167. Again, not quite, but almost doubling the previous accepted value. The first week of June price stabilized around @221, before almost doubling it again within a week. Amazing wild run it has been.

The price reference that I used in my notes above are plotted from my profile chart, these are noted as HVN (high value node) and POC (point of control). Think of HVN as the most accepted average price given a moment in time, days /weeks/months. ETH price has come down to about +/- 60% from ETH all-time highs, and currently the most accepted price within the last month all-time highs is $257. This is the most accepted average value in the triple digits, and the reason why I am showing a chart going back 2 months.

I have mentioned in recent posts that ETC (also BTC) is possible moving sideways and that there's no edge trading at this time. When price is Balanced, all it does is goes up a bit, then goes down a bit, repeating this chop and chop process revolving around the HVN. This is detrimental for traders who enter in balanced areas since no significant movement is happening. Understanding this concept can be useful for long term investors too, in order to weather out the storms or position themselves to buy when the time is right.

So I have zoomed in from Daily to 4-Hr to 30-min charts. Daily gives me context and understanding of the overall trend or market situation. 4-Hr gives me an understanding if a set-up is forming or not. And the 30-mins chart gives me refinement that I need in order to place an order to buy or sell. I plot my Support and Resistance lines from the 4-Hr chart as they have a good snapshot for both long term investors and short term traders, and I typically trade when long term investors are active on the market, since again, they are the market movers and the ones that can set the trend or direction of the move.

For today, watch out for S1: 250. Below 250 we have a HVN magnet around 221. S2 support is around LVN 238. I would not buy around 250, but if wanting to go long, wait until S2 since market has been coiling for sometime. S3 should be around 200.

As always please follow your trading plan & feel free to ask me anything, post a comment, tell me if I bored you to death which probably you wouldn't have made it reading this far :)

Until my next post, happy Friday!