BITCOIN (BTC/XBT) DAILY BUY&SELL TRADE SETUPS 2020/12/29
Market Overview
Trade Recap
Yesterday we had a 'very high risk' trade, taking a long on a retest and continuation setup where BTC moved down to test the 200MAs and successfully bounced up. The trade was a sucess and gave us a 3:1 Risk Reward Ratio (profit of 3BTC for 1BTC risk).
Long Trade Setup: 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 28.4K with force, creating space between the price and 28.4K, falls back down to 28.4K 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: False Breakout
To open a short position, we are waiting for price to break above the horizontal resistance @ 28.4K and then fall back down.
Trade Entry Confirmation:
1. Price Action: Price breaks above the high of 28.4K and then rapidly falls below 28.4K, forming a bull trap
2. Candlestick Pattern: A breakout candlestick (candle close above 28.4K) followed by a breakdown candlestick (candle close below 28.4K)
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)
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.
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.
Please let me know how I can improve these daily posts / what you would like me to include in these daily posts, thanks.
- After BTC established a new ATH @ 28.4K, price has retraced and has hugged along the 200MAs. If the 200MAs hold, we can expect another leg up, but if it doesn't, we might have a pretty steep fall as we haven't established many levels of support on the rapid run-up. Make sure you have a strategy ready should we have a steep fall so that you won't be panicking and bottom-selling.
- The main level immediately significant on the charts that we want to focus on is the new All-Time-High of 28.4K, as if we fall below, we might be in free-fall. We will be looking for trading opportunities at the ATH, and I've laid out two potential trade setups in detail below.
Trade Recap
Yesterday we had a 'very high risk' trade, taking a long on a retest and continuation setup where BTC moved down to test the 200MAs and successfully bounced up. The trade was a sucess and gave us a 3:1 Risk Reward Ratio (profit of 3BTC for 1BTC risk).
Long Trade Setup: 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 28.4K with force, creating space between the price and 28.4K, falls back down to 28.4K 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: False Breakout
To open a short position, we are waiting for price to break above the horizontal resistance @ 28.4K and then fall back down.
Trade Entry Confirmation:
1. Price Action: Price breaks above the high of 28.4K and then rapidly falls below 28.4K, forming a bull trap
2. Candlestick Pattern: A breakout candlestick (candle close above 28.4K) followed by a breakdown candlestick (candle close below 28.4K)
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)
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.
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.
Please let me know how I can improve these daily posts / what you would like me to include in these daily posts, thanks.
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