BITCOIN (BTC/XBT) DAILY LONG&SHORT TRADE SETUPS 2021/01/02

MARKET OVERVIEW

• Price Action: Bitcoin established a new ATH @ $29.6K before rapidly retracing, which gave us a profitable short trade, then bounced off of the 200MAs, giving us another profitable long trade, and seems poised to make another go at the highs. If we again get a new high that is marginally higher, then we might have an opportunity for a third false breakout short trade.
  
• Chart Patterns: No significantly visible chart patterns
  
• Areas of Interest: The area(s) of interest for us are the highs @ $29.6. Once price reaches one of our areas of interest and gives us a valid entry signal, I will update the trade, so make sure you follow me to get the trade entry signals in real time.
  TRADES(S) RECAP:: LATEST 3 TRADES
  
• 2020/01/01: We had another winning trade! We entered long @ $29.1K, Stop Loss @ $28.8K, and priced reached a high of $29469 so far, giving us a risk reward ratio of 1.5:1, meaning if you risked 1BTC on this trade, you could've made 1.5BTC.
  
• 2020/01/01: We had a winning trade! We entered short @ $29.3K, with a Stop Loss @ ~$29.6K, and price reached a low of $28.6K, giving us a risk reward ratio of 2:1, meaning if you risked 1BTC on this trade, you could've made 2BTC. As this was a false breakout trade, we could've also entered a short on ETH, entered short @ $735, SL $743, price reached a low of $714, giving a risk reward ratio of 2.5:1, meaning if you risked 1BTC on this trade, you could've made 2.5BTC.
  
• 2020/12/31: We had a winning trade! We entered short @ $29.3K, with a Stop Loss @ ~$29.5K, and price reached a low of $28.8K, giving us a risk reward ratio of 2.5:1, meaning if you risked 1BTC on this trade, you could've made 2.5BTC. As this was a false breakout trade, you could've also decided to enter a short on ETH. Entry would've been $745, SL $749, price reached a low of $725 so far, giving a risk reward ratio of 5:1, meaning if you risked 1BTC on this trade, you could've made 5BTC.
  
  TRADE SETUPS
  Below are two potential trade setups that I would be interested in trading. Regardless of the path that the price takes, I will be monitoring the market for a valid trade entry signal.
  
  Long Trade Setup #1: Breakout and Continuation
  To open a long position, we are waiting for price to break resistance, move back down to test previous resistance as support and then bounce back up.
  Trade Entry Confirmation:
  1. Price Action: Price breaks above the high of $29.6K with force, creating space between the price and $29.6K, falls back down to $29.6K and bounce back up.
  2. Candlestick Pattern: A bullish candlestick pattern such as a bullish engulfing candle, a pinbar, or a multiple candlestick breakdown (a large red candle followed by multiple green candles that eventually close above the open/high of the large red candle)
  2.1 Ideally Engulfing / Break candle has a large candle body with small wicks
  2.2 Ideally Engulfing /Break candle closes near the highs of the candle
  3. Volume: Above average volume on the bullish engulfing candle, pinbar, or on any of the multiple green candles that eventually break the red candle (ideally on the candle that breaks)
  4. MACD: MACD histogram bottoming out, as indicated by the histogram becoming less negative (changing from red to pink)
  
  Short Trade Setup #1: False Breakout
  To open a short position, we are waiting for price to break above the horizontal resistance @ $29.6K and then fall back down.
  Trade Entry Confirmation:
  1. Price Action: Price breaks above the high of $29.6K and then rapidly falls below $29.6K, forming a bull trap
  2. Candlestick Pattern: A breakout candlestick (candle close above $29.6K) followed by a breakdown candlestick (candle close below $29.6K)
  2.1 Ideally breakout and breakdown candlesticks are consecutive candles, but can also have a few candles in between the two
  2.2 Ideally the breakdown candle has a large candle body with very small wicks
  3. Volume: Above average volume ( volume above the average volume line) on both breakout candle and breakdown candle, ideally the breakdown candle's volume is a local high
  4. MACD: MACD histogram topping out, as indicated by the histogram becoming less positive (color changing from dark green to light green)
  NOTE: For false breakout/false breakdown trade setups, sometimes trading the other pair (eg. trading BTC when the setup is on ETH and vice versa) can be even more profitable if the other pair is looking weaker (for false breakout setup) or stronger (for false breakdown). Some indicators to consider are where the price is relative to the 200MAs, size of recent candles, volume , and overall price action, market structure, and chart patterns.
  
  ENTRY CONFIRMATIONS
  Ideally we get all confirmations for an entry, but sometimes we might take a trade when we have fewer confirmations. The more confirmations, the higher the win probability, though it also means you miss out on some profitable trades if you're only taking trades when we have all confirmations. It's up to your own risk appetite to decide when you feel comfortable entering a trade. You can also adjust position size based on level of conviction, entering a bigger position when there are more confirmations. Make sure you practice proper risk management and money management.
  
  TRADE MANAGEMENT
  I have put in preliminary Stop Loss and Take Profit on the chart, but these will depend on how the entry setup forms, so I will update when we have a valid entry signal.
  Stop Loss: We typically put a SL around the high / low of the entry area, though we might adjust based on market conditions such as high ATR ( average true range ) or long wicks.
  Take Profit: We typically aim for at least a 2:1 RRR (risk reward ratio), but you can decide to take profits earlier, adjust stop loss as we get into profit, take partial profit, leave a small portion for larger gains, etc. How you want to manage depends on your own risk appetite and what you are comfortable with.
  
  HOW TO USE MY ANALYSIS
  Every day I post potential areas of interest and trade setups based on the latest market conditions and market structure. Once price reaches one of the identified areas of interest and gives a valid entry signal, I will post the entry, along with stop loss and take profit levels, in real time. No hindsight 20/20 here. Everything is in real time for full transparency and so that you can actually enter the same trades that I'm entering. Some trades only give us a few minutes to enter, which is why it's imperative that you follow me so that you don't miss out. Below are two ways that you can use the analysis that I publish daily:
  1. You can integrate my analysis into your own analysis, for example by using it as a starting point, or as confirmation of your own TA, or to identify potential trades for yourself.
  2. You follow the trade setups and trade entry signals that I give in real time.
  
  MAKE SURE YOU FOLLOW ME SO THAT YOU DONT MISS TRADE SIGNALS, GET THE LATEST SL AND TP LEVELS, AND FOLLOW THE TRADE PLAY OUT IN REAL TIME!
  
  DISCLAIMER: I'M NOT A FINANCIAL ADVISOR AND THIS IS NOT FINANCIAL ADVICE, AND I WILL NOT BE RESPONSIBLE FOR YOUR WINS OR LOSSES, DYOR.
  
  Feel free to ask any questions, and please let me know how I can improve these daily posts / what you would like me to include in these daily posts, thanks.

코멘트:

Seems to have retested 29.6k as support, so doesn’t look like we will get the false breakout short setup that we’ve gotten the past couple of days.

코멘트:

Now waiting for 29.9k and 29.2k for potential opportunities. Will call out entries live in this post if we get one. Cheers.

코멘트:

Bitcoin going nuts. In hindsight, the successful retest of 29.6k as support would’ve been a good place to go long, but I didn’t make a call because price action was a bit too crowded and i wasn’t comfortable making a trade. I’m fine missing the trade because there will always be a next trade and in any case 90% of my BTC is in my HODL stash, so I’m happy with the rally :)

코멘트:

I do think though that we are getting a it overextended. For those that took long positions on the flip of 29.6k, now might be a good time to take some profits in case things turn around because if it turns, it can do so pretty quickly. Of course, it can continue up, but the risk is getting higher, and in trading, you don’t need to get the absolute tops and bottoms. You just need to make sure you continually secure profits and increase your account size.

코멘트:

QUESTION: Would you like me to conduct technical analysis on alts? If yes, please let me know in the comments which alts you’d like me to cover.