Weekly Review: Losing Trades Avoided

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April 12, 2019 Welcome to the weekly edition of the CoinDesk Markets newsletter! Every Friday we will review our cryptocurrency price predictions posted during the week via CoinDesk Markets Twitter  or our private room on StockTwits, the CoinDesk Dojo.  "Trades You Missed" will feature our favorite trade ideas or technical analysis insights that accomplished impressive gains, where as "Trades We Missed" will feature those that took a turn for the worse. Wins and losses are both part of the trading game, so we hope you will learn how to replicate our successes and minimize losses!   Avoided Elastos Pullback ELA/USDT: Price: $3.85 | MCAP: $58.4 million | Maximum Gain: 0% (trade never taken) Why we were intrigued: This was an eventful week as bitcoin spiked to new local highs above $5,450 on most exchanges, only to quickly retreat and dip below $5,000. Needless to say, this caused quite a bit of uncertainty in the crypto markets, resulting in significant pullbacks from many alternative cryptocurrencies.  At times like this, the real winners can end up being the trades you never took. Case in point being Elastos (ELA/USD) on April 9th. The stars were beginning to align for ELA as it had recently found acceptance above the 200-day moving average (MA) and the future cloud of the Ichimoku cloud - an indicator that attempts to predict trends rather than follow them - twisted green for the first time suggesting a bearish to bullish trend change was afoot. Indeed, positive signs were emerging, but as noted in the post, ELA's price had yet to emerge above the cloud (tends to provide resistance) and there were long upper candlestick wicks indicating profit taking and that the recent acceptance above the 200-day MA may not be sustainable. As a result, this buy trade would have been avoided as stronger bullish confirmation of trading above the cloud was never provided.  Looking ahead, ELA/USD is looking to reclaim its position above the 200-day MA after falling nearly 15 percent, which would revive a bull bias. That said, ELA and most other altcoins are likely to follow whichever direction bitcoin moves while there is a heightened degree of uncertainty in the markets.   The Trade (or lack there of) The Result   EOS Breakout Turns to Fake-out EOS: Price $5.42 | MCAP $4.9 billion | Maximum Loss: 0% (stopped out in profit) Why we were intrigued: On April 9, EOS/USD was up roughly 33 percent month-to-date, and it appeared as though continuation to the recent uptrend was likely in order due to the formation of a triangular consolidation pattern. Triangular patterns such as the symmetrical and ascending variations as well as the pennant are all considered bullish continuation patterns when found in uptrends as they indicate a healthy digestion of the preceding upmove. A continuation of the trend upward for EOS would have landed it toward the projected target of $6.96 with a measured move, using the base range of the pattern added to the point of breakout. The next day, EOS/USD did in-fact breakout for a roughly 8 percent gain, however red flags began to appear that suggested the ultimate target of $6.96 was not going to be reached in the near term. The breakout was backed by low volume, a telltale sign of a "fakeout," and what's more bitcoin then began its dip below $5,000 dragging the rest of the cryptocurrency market down with it.  EOS/USD had thus retreated back to sub-breakout levels invalidating the bullish triangle setup. Luckily, the trade was well in profit by the time the market began to dip, so a trader should have been able to exit with a small profit or at least breakeven if a stop loss was appropriately used to ensure the winning trade would not turn into a losing one.    The Trade The Result   We're excited to announce the launch of the CoinDesk Dojo, a premium subscription part of StockTwits' recently announced Premium Rooms product. Ask the analysts—Omkar, Sam and Seb—questions about charts and talk with other traders looking to profit off the volatility of the crypto markets.  Create an account on StockTwits and then subscribe! Subscribe Here   Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. Copyright © 2018 CoinDesk, All rights reserved.  Our mailing address is:  250 Park Avenue South New York, NY, 10003, US  Want to change how you receive these emails? You can update your preferences or unsubscribe from this list