EUR/USD continues to show signs of weakness but we see Bitcoin (BTC) and other cryptocurrencies continue to confuse traders short term showing fake signs of bullishness when the big picture remains very clear. It all comes down to making decisions with a level head in trading. If you are unnerved by every short move up and down then you are not likely to be profitable in this market or any financial market. You could get lucky once or twice but there will be no consistent profits unless you have a strategy that you can stick to. This daily chart for EUR/USD shows us what is really happening. The pair remains within a downtrend and as we can see after repeated attempts to break past the 21 day EMA, it keeps on failing.
The price of Bitcoin (BTC) has done nothing much but traded sideways for the most part if we are talking about the big picture like its daily close for the past few days. If we were to talk about short term moves, then it has done a lot to confuse traders as well as to run their stops on both sides. This is why it always helps to remain focused on the big picture and never to lose focus of the grand scheme of things. Short term traders, mostly day traders like to say that they do not know what is happening on the market and that they take a direction and wait for the market to prove them wrong. If they are not proven wrong, they make a profitable trade. I have never believed in this approach because to me this is organized gambling. I think trading and investing does not have to be gambling.
For instance, this is the daily chart for BTC/USD. As an investor, I would be interested to buy low and sell high. Most investors buy low and then they hold. Traders on the other hand keep buying and selling. If the price is at a point where we think it has bottomed we are more interested to buy. However, when the price is at a point where it has topped, we are not as interested to short sell. I don’t think this should make any difference to us as traders. If it helps, you can flip your screen upside down but the principle of buying low and selling high is the same.
The problem with a “buy only” mindset is that you end up catching knives. You are so eager to buy the market because you don’t believe in short selling and you keep waiting and waiting to buy and when the price does not decline as fast you end up buying into the market because you don’t want to wait anymore. I would like to emphasize that playing that game at this point could turn out to be extremely dangerous as I think we are just about to enter the second half of this bear market. This is why if you don’t believe in short selling the market, I think it would be a better idea to wait it out. There is no lack of investment opportunities in other markets so don’t risk your hard earned money by buying into FOMO. Don’t chase the price, let it come to you.