Before we start, I want to advise that this is not necessarily an A+ setup or strategy. It’s meant to help augment and find safe entries to take a position with less damage in the case of a failure. Many markets that aren’t trained on exact linear regression through high and lows won’t have the level of signal in these concepts that other markets do. Using indicators like AVWAP for singles markets is often a much better area to focus on. But this is my playbook, and these are some of the concepts that I played early on and have improved the consistency on. This is a weekend-play only for me basically, just figuring out different ways to pull a few bucks of bitcoin is the ultimate “rubics cube” of markets. This setup is described in relation to a Bitcoin entry. BTC is such a challenging market, I find it really helps me see and understand how the markets behave when liquidity is thinner. You can start to see what the AI is looking at and it helps you find the patterns in the observations that bots are picking up.
Wedges, Horns and Triangles actually have quite strong alpha in them when you start to look at breadth beside them (RVOL.) But this style of pattern trading appears out of favour. I can confirm there are signal in the few patterns I mentioned, good probability to find a surefire move (70-80%). BTC is one of the more liquid markets, and, for whatever reason, it also has the cleanest lines when conditions are decent. One of my favorite ways to find scalps in BTC that I might be able to hold on to, is to find safe entries for breakouts using regressions inside the consolidation to get risk-free with some weight fast. We’re not gambling here, so my goal with bitcoin is to try to for a big pivot without risk. It can take a lot of bullets to get an entry to stick on BTC as it’s so competitive. So if you can take a bunch of shots without any drawdown, you have a better chance of actually being in the move that goes. BTC’s volatility give you the hope and possibility of 5% move, but it’ll compete you out of your position more often than it’ll let you be the one benefiting from the move.
With BTC, you never know if you’ll happen to be on a fast slide or a massive avalanche, so a lot of times I shark around it on the weekends if I see it showing more volatility, or a good contraction. Your best bet is to play these setups in two entries: one to take at the first resistance, and one to let go incase you caught the big shift. You want to preserve your capital, you’ll burn through your cash if you’re just gambling on BTC’s erratic hand-slapping. You’ll want to cover your risk entirely as fast as you can, because this market won’t give you anything for free.
The trade I’ll demonstrate from now has a few visible patterns, likely due to extra human traders watching after the halving. I’m very sure, however, that the sharp lines in BTC are from bots as they have been razor sharp in the charts for years when conditions are good.
First, we’ll zoom out a little bit to check what the trend is like across a few days. You can look higher, but this is what I’m looking at for the duration of this trade. BTC is generally trending up, but it’s broadening a bit. There is probably indecision – some people think it’s going to risk off, and others think it’s gold and will go up after the halving. The bears tend to win, but we’re still in the channel, we have opportunities we can find. Trading with the channel, for now, will give us a scalp opportunity. The vertical line shows where halving occurred. You can see I’m sketching lots of regressions, and trying to find different lines. I watch the price to see which lines are observed and redraw constantly until I get a good confirmation that the market is trading the same regressions I’ve found. It’s easy to get this part wrong so it’s best to play at the end of leg when you can be really sure you have all the data to get a high-probability entry. BTC moves fast, so you never want to get stuck on the wrong side without an exit.
The opportunity that I saw was to long this wedge break, take profit at the resistance (small scalp, but covers risk), and then see if we can catch a big break. If we take some profit at the first risistance (confirming the market halts there), we can 0 risk this and just hold it into the end of consolidation without any draw-down to keep the trade free. You can I entered, it ran to the resistance line to the dollar, and halted. So we found a regression, it worked to signal out exit. But it’s near the end of this consolidation too – if we happen to be “right” and can hold this trade without drawdown, the RR can be massive. The time sucks, but let’s see what happens. I’ll update as the price moves.
And this didn’t yield but we got a free trade. Asia open hour sunday night kind of skews the setup. I didn’t account for the market hours (even on holidays and weekends, these qualities of time are baked into the AI so the market hours still behave similarly.) That’s one of the worst issues with trading trendlines, is that you can easily miss important features like time of day, which can invalidate a perspective.
Update: I was sick over the weekend and barely moved. Watched BTC for a bit and I saw a couple more good examples that I took in money. I had a lot more bad trades before I started to get profit – you have to take what is given. Red weekend as usual with BTC for me, but I was able to juice a lot of learning out of conditions. I can still see bias. BTC is super hard. Unless it’s really trending, you can find a move, but you have to take whatever profit is offered.
k-xs 
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