I don’t use Elliott Wave as a direct execution tool for trading. My Elliott Wave analysis is mainly used to determine market bias and the probability of the next move. It is only one part of my overall system. When I trade, I use a simple approach: if my bias is bullish, I accumulate or scale in when RSI < 40, and I exit when RSI > 70. When RSI < 40, Bitcoin enters a buy zone, and I use my own discretion to enter the market. Similarly, when RSI > 70, I observe the price structure to decide whether to take profit or continue riding the trend. I don’t aim to maximize analytical accuracy—because for me, profitability matters more than being right. The key is risk management.
How does a Bitcoin trading strategy perform when entering positions at RSI < 40 and exiting at RSI > 70?
This strategy is fundamentally applied during Wave 4, with the expectation that Wave 5 will follow. Accumulation is executed during the oversold conditions of Wave 4, while exits are timed to capitalize on the impulsive move of Wave 5.
It is essential to understand that Wave 4 typically exhibits a more shallow correction compared to Wave 2, often forming complex structures and occasionally triangles. This behavior makes it well-suited for applying a strategy of entering the market when RSI reaches mildly oversold conditions.
Beyond market reading techniques, a multiple-entry approach is employed to average the position, allowing for more optimal pricing during the accumulation phase. Only two exit strategies are utilized: the first is triggered when RSI exceeds 70, while the second involves a delayed exit to capture the full extent of the Wave 5 impulse.
The chart illustrates six scaled entries initiated once RSI falls below 40. The first exit is executed when RSI exceeds 70, while the second exit is set at a predefined price target of 73K.
This strategy is fundamentally applied during Wave 4, with the expectation that Wave 5 will follow. Accumulation is executed during the oversold conditions of Wave 4, while exits are timed to capitalize on the impulsive move of Wave 5.
It is essential to understand that Wave 4 typically exhibits a more shallow correction compared to Wave 2, often forming complex structures and occasionally triangles. This behavior makes it well-suited for applying a strategy of entering the market when RSI reaches mildly oversold conditions.
Beyond market reading techniques, a multiple-entry approach is employed to average the position, allowing for more optimal pricing during the accumulation phase. Only two exit strategies are utilized: the first is triggered when RSI exceeds 70, while the second involves a delayed exit to capture the full extent of the Wave 5 impulse.
The chart illustrates six scaled entries initiated once RSI falls below 40. The first exit is executed when RSI exceeds 70, while the second exit is set at a predefined price target of 73K.
Today’s market appears quite challenging, with price action moving sideways. This was anticipated, as we are currently dealing with a corrective phase. Determining Fibonacci targets in such conditions is relatively difficult; however, the overall market bias remains bullish.
This situation should not be seen as a barrier to trading. We understand that price behavior in this phase tends to resemble a normal distribution, making it more mean-reverting in nature.
For this type of market, we apply a simple RSI 40/70 strategy — accumulating when RSI drops below 40 and taking profit when RSI exceeds 70. A more appropriate and aggressive exit approach is to close all positions upon the appearance of a red bar (RSI>70), serving as an early risk management mechanism.
There are times when the RSI does not reach the 70 level; in such cases, discretionary judgment should be applied to determine the appropriate exit from the market.
So far, we have observed two long entries and one exit, and this simple trading approach has proven to be profitable.
This situation should not be seen as a barrier to trading. We understand that price behavior in this phase tends to resemble a normal distribution, making it more mean-reverting in nature.
For this type of market, we apply a simple RSI 40/70 strategy — accumulating when RSI drops below 40 and taking profit when RSI exceeds 70. A more appropriate and aggressive exit approach is to close all positions upon the appearance of a red bar (RSI>70), serving as an early risk management mechanism.
There are times when the RSI does not reach the 70 level; in such cases, discretionary judgment should be applied to determine the appropriate exit from the market.
So far, we have observed two long entries and one exit, and this simple trading approach has proven to be profitable.
Revised count...
Bitcoin appears to be forming an ending diagonal structure. The overall bias remains bullish, and the strategy continues to rely on the RSI 40/70 framework, utilizing a single exit approach.
Bitcoin appears to be forming an ending diagonal structure. The overall bias remains bullish, and the strategy continues to rely on the RSI 40/70 framework, utilizing a single exit approach.
For those familiar with Bitcoin’s daily chart analysis, the behavior of trendline breaks becomes quite evident. On the arithmetic chart below, it can be observed that in recent years, a breakout has typically occurred once per year. With the exception of 2022, each breakout was followed by a strong trending move. Whether this pattern will repeat this year remains to be seen.
Our simple RSI 40/70 strategy has once again delivered results. We identified four accumulation points (#1–#4) and a single exit point at #5.
Notably, the accumulation entries are clustered around similar price levels or in close proximity. The key issue here is how to properly structure position sizing under such conditions. I’ll leave that question open for further study, as it requires deeper analysis and can be quite complex.
Structurally, the market appears to have completed a fifth of the fifth wave. Under classical principles, this scenario often opens the door for potential short positioning strategies.
Notably, the accumulation entries are clustered around similar price levels or in close proximity. The key issue here is how to properly structure position sizing under such conditions. I’ll leave that question open for further study, as it requires deeper analysis and can be quite complex.
Structurally, the market appears to have completed a fifth of the fifth wave. Under classical principles, this scenario often opens the door for potential short positioning strategies.