ETHUSD Perspective And Levels: Higher Low 290s?

ETHUSD update: Price is fluctuating in between the .382 and .618 support areas that I wrote about in my previous report. I am long from 298.84 (as mentioned in my update) with my stop now adjusted to 279. I will explain.

After reevaluating the price history along with 283 being within the .618 support zone, I thought it would be better in this case to adjust slightly lower to accommodate the support structure in the area. My risk does not increase by much and my rr ratio changes to approx. 1.5:1. I do not usually adjust a stop against a trade, but I make this rare exception because this is where the stop should be based on price structure.

Since this market has retested the 297 level that I wrote about previously, it is consolidating (as evidenced by the 4 hour doji candles) and may need some more room for a possible fake out. This is when price goes lower, but without making a new low. In this case, as long as price holds above the 273 support, this market will be in the process of forming a higher low. Higher lows as we know are a sign of strength and often lead to higher highs.

A decisive break below 273 which is the recent low, then this market will be more likely to retest the 250 support zone that I wrote about previously as well. IF price holds, especially above the 286 area, then there is a greater chance this market retests the 310 area in my opinion.

I plan to add to my position if price can show additional strength which can unfold in a number of ways. One way is a push back above 300 along with a minor retrace followed by a bullish reversal on a smaller time frame such as the hourly. Another way would be the break above a bullish pin bar IF one appears after another retest of the 290 low. Either way there must be some new supportive structure to justify an add of 30%, otherwise I will just hold what I have.

In summary, even though there has been a lot of noise resulting from the BTC fork, TA still provides reliable levels to work from. Often environments like this are perfect for day trading because you can capitalize on these fake outs rather than get stuck in them. Most importantly, you have to have a plan, or some kind of decision making process in place that is based on information generated by the market. Otherwise it is easy to get caught on the wrong side of extreme prices, especially in this market.

Comments and questions welcome.