Wednesday, 24 January 2018

The End of Crypto Correction and My 1st Ripple (XRP)

 The Wait for Crypto Coin Correction is Over 

The correction that hit Bitcoin (on 16 Dec 2017) also spread to other coins like XRP (on 4 Jan 2108) and ETH (on 13 Jan 2018). In fact, since 16 Jan 2018, their prices were in perfect tandem on a daily basis. They were going up and down together and in the last 8 trading days, they've been doing sideways consolidation.

I believe the ongoing crypto correction for these 3 major coins is over. At least within days of being done.

(Click chart to enlarge)

 Unhealthy Habit of Bottom Picking 

I don't need to pick an exact day of a bottom (bottom picking leaves smelly fingers, and very unhygienic). Nobody can do it consistently. In fact, having such attitude is bad for trading. Beating yourself up for missing the exact bottom is unhealthy (and unhygienic).

What i intend to do is having a good (RRR) Reward to Risk Ratio in a trade, not picking an exact bottom (although i try, but i don't expect to succeed. Sometimes i get extremely lucky and smelly). For example, when you chase Bitcoin as it approaching $20,000, that's a terrible RRR. But enter into a Bitcoin trade after it dropped by some 43%, that's a much better RRR. In fact, it's about 4 times better.

Rafael Nadal picking his bottom
Rafael Nadal - one of the tennis great - is a noted bottom picker. 

While i entered my Bitcoin trade last week at about $1,1500, it wasn't the lowest price i could enter, but my downside is about 4x less compare to if i entered my long trade near $20,000.

monkey picking his bottom
I know, bottom picking can be an enjoyable, even an addictive activity. But stop it !

 My 1st Ripple Coin Trade 

After sold off my Bitcoin in Dec last year, now i want to take this correction to diversify my crypto holdings with my Digital Coin Fund (DCF).

I started with Bitcoin holding in 2014 because it's the 1st and the oldest crypto. As more and more digital coins appear and showing promises, it's time to diversify away from Bitcoin. Also, Bitcoin had a long run-up comparing to ETH or XRP. Especially XRP, which just has its 1st run up after some consolidation period. ETH is like BTC in late 2015, and XRP is like BTC in 2013. Maybe i should be out of BTC all together. Nah, will have some for old time sake because i'm a sentimental fool.

Needless to say, ETH was my 2nd crypto of choice and i traded it a few times before. Now, i add XRP as my 3rd coin to trade. There's no reason the idea of diversification doesn't apply to the digital coins trading.

Ripple XRP price chart showing breakout
(Click chart to enlarge)

XRP suffered from this price decline contagion the most, dropping from its ATH of $3.32 to a low of $0.87. This represents a drop of nearly 74%. This is hardly surprising as it has the smallest market cap of the 3. When i bought it, it's a 58% discount from its ATH just a month ago.

The breakout tells me that the correction is over (other internal technical indicators like RSI and Money Flow also confirm this) . The 50D MA offers a strong support for the last 2 weeks. So i deplored 1/3 of my DCF into XRP.

The rest of 1/3 will go into ETH next, which i expect the correction is over in a few days. I expect the same thing with Bitcoin because of their synchronized correction. I expect synchronized recovery. All 3 charts are telling me so.

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