Here’s your trade on bitcoin proxies – $IBIT, $MSTR and $MSTX – October 28, 2024
Dan Fitzpatrick here at StockMarketMentor.com. Bitcoin has actually been doing pretty well.
We have been crushing it at Stock Market Mentor on MicroStrategy ( NASDAQ: MSTR ) and more “leveragedy” MSTX ( NASDAQ: MSTX ) as I call it. The 1.75 times long MicroStrategy ( NASDAQ: MSTR ). I like it when my biggest position is up almost well over 15 percent when the underlying is up 9 percent. I’ll take those kind of numbers any day.
So what are we going to do with this now? What the heck are we going to do here? I say you’ve just got to ride the lightning. Just ride this thing until it bucks you off. I don’t think it’s going to buck you off for a while. If you want to look I’ll actually make the Bollinger Bands a little bit darker here so you get a better sense of where this is going.
This is just walking along the upper band. We just now started to get the 200-day moving average coming in. So you can see, everything’s really like all systems are go, that’s the way I would look at this. And so the problem with this can be that, and this sounds silly to say, but when you’re making too much money you tend to want to choke off the trade.
The point is this, as long as a position is working you don’t want to second guess it. Because we can always overthink things, and I can just tell you from my personal experience, if I’m in a certain kind of mood, I can talk myself into doing anything in a trading world here.
I can talk myself into loading the boat. I can talk myself into putting my head underneath my pillow, or anything in between if I’m in a certain kind of mood. What you want to do is avoid being in that certain kind of mood. The way you do that is to just follow the chart, and follow the price action.
Use your common sense and understand this, trends in motion stay in motion longer than you think they will. There’s only one time that a trend ends, only one time. Other than that one time, every little pullback is just another buying opportunity. Think about that, every single time a strongly trending stock pulls back, it’s a buying opportunity.
If you buy a stock, it’s got to be a trending stock, listen to me, I’m giving you pearls here, if you buy a strongly trending stock on a pullback, there’s only one time that that’s not going to work for you. And that one time is when the trend actually does end. The rest of the time, all you did was, you took one more step up on that wall of worry.
So we want to stick with these stocks as long as we can because they don’t always pay us off. We don’t get these kinds of opportunities a lot. This is kind of an NVIDIA ( NASDAQ: NVDA ) thing here. So if we look at IBIT ( NASDAQ: IBIT ), I’m looking at this $40.00 price here.
So this really seems to be the line in the sand for this. It’s been moving up really, really well, it’s up about 50 percent since here. I would wait at this point, I wouldn’t be buying this right now, you have no advantage. If you buy it now and you get 1 percent before it tests 40.00, not even that actually.
So if you’re going to do this, wait for the stock to break out above 40.00, maybe pull back a little bit, and then hop on board. And on this type of trade, what you also want to do is, you want to be looking at the last important low, not just the last low, oh it was yesterday or the day before. But the last real meaningful low, and I would say that’s here.
So if you’re buying this stock, if you’re buying this here, if you’re already long, you keep a stop down there it’s about 6.5 percent and that gives the stock room to move. You can see, because this is really, really gappy, it’s going to gap every single day. And the reason it gaps is because Bitcoin is a 24/7 thing. This is just a 9:30 to 4:00, Monday through Friday thing, so you’re always going to get these big gaps.
You’ve got to pay attention to that. You have to understand that that’s what’s happening when you see this gapping around do much. But all in all, this thing’s working really, really well along with MicroStrategy ( NASDAQ: MSTR ) and MSTX ( NASDAQ: MSTX ). Here’s the Bitcoin chart though on TradingView, which is an awesome platform, I highly recommend it. It beats the snot out of TC2000 to be quite honest with you.
So I’m looking at this, and this is close to breaking out too. If this thing can get above $70.00, 70,000, I think we’re going to be in a whole new world here for Bitcoin. So if you’re a Crypto trader you watch the 70,000 level. If you’re a stock trader, you watch the 58.00 level on that, that’s your ETF.
If you’re a MicroStrategy ( NASDAQ: MSTR ) trader you watch 260.00, there are all kinds of very, very meaningful levels here. But ultimately, no matter which of these things that you’re trading, you’ve got to know the trend is up. So don’t shy away from them, but just make sure you’re managing your risk first.
You always want to know exactly how much you’re risking on a certain trade, it’s always unpleasant when you lose. But it’s never an unpleasant surprise, we’ll put it that way.
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