Bitcoin Drama – Put The Selloff Into Perspective

Overview:

As mentioned this yesterday in Marc’s article, we had noticed some preliminary warning signs that the market was looking to selloff.   We were looking at some defensive measures before the market fell apart.  Unfortunately the market pulled back prior to taking action. 

Shit Happens and we do not react we make logical and planned our decisions.  Again reacting on impulse is a recipe for disaster.  Reacting irrationally yesterday may have worked this time, but doing it over and over will lead to losses.

The bad news is the selloff was swift and the 12 hour bar is ugly.  The good news is, we did not push through the 6000 level and are still hanging in there 12 hours after the selloff.  

We do NOT get caught up in the drama.  If you do not have the stomach for minor pullbacks, than this or any market is not for you.  Invest in CD’s.  We have mentioned it before, the low hanging fruit has been picked and it becomes more difficult from here.  Those looking to make a fortune overnight are simply chasing rainbow unicorns.  We have a long term perspective in both trading and investing if you are looking for lottery ticket numbers we are not the ones to follow.

We mentioned prior that the market was acting like a jerk, and the jerk showed up to the dance.

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5 Responses
  1. Kcollins5311

    Hi Andrew,
    I know you have written often about the flaky nature of the exchanges and in your article you mention our swing trade was closed out. Interestingly, I had a limit sell order at 6370 on Coinbase (-$50 from the stop on Bitfinex), but for some reason it didn’t hit yesterday during the drop. It could certainly have been operator error on my part, but any thoughts on this? I know the drop was quick, but would welcome your perspective. Thank you!

    1. Andrew Gonci

      Hey Collins, Depends on how you entered it. A Sell Stop Limit triggers a sell limit order when the market hits your Stop. Say you entered it at Sell Stop 6370 Limit at 6370. When the market hits 6370 a limit order is entered at 6370. If the market just blows through this, your order will not be filled.

      This is different than a Stop Order which would just enter a market sell if an when 6370 is hit. The downside to Sell Stops is sllippage. Your order could be filled at 6350-6320-6300 or wherever the market has buy orders. The downside to Stop Limit orders is in swift selloffs you may not get filled.

      I am assuming that you likely have a Sell Limit order at 6370 in the order book. Good question! Hope this clarifies it.

    2. Andrew Gonci

      For the record I am in the same situation, blew right through the stop and my limit order is still open. I will look to adjust later today depending on how the candle closes.

  2. James Cutts

    For those of us using Bitfinex, would you be able to continue using Bitfinex prices when posting swing trade alerts? I don’t care if you use both, but I am unwilling to do the calculations myself.

    Also, if the price discrepancy between Bitfinex and other exchanges reduces will you consider going back to their charts?

    Thanks

    1. Andrew Gonci

      Hi James, hopefully bitfinex gets things together, there are a lot of rumors out there true or false it does affect future liquidity.

      We will post the adjustment in the email.

      Thanks

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