ETH/USD SHOST SETUP IDEA
Entry: $1,204.15
Stop Loss: $1,260.25
TP Levels and RR: $1,057.04 (2.62)
REASONS FOR THE TRADE
Although this setup looks almost identical to the previous one we took (which was long), the two indicators I am using - Trend Volume RSI Analysis and Multi Time Frame Effective Volume Profile show clear divergence. The up move is no longer supported by the required volume, so I expect a dropdown. The Stop Loss is put at a relatively safe distance and the target is reasonably low. However, should this setup turn out to be valid, I would trial the SL and let it run. I would take only partial profits at the target.
If this setup turns out to be invalid, our previous long is still active and in profit, so we are effectively hedged.
Entry: $1,204.15
Stop Loss: $1,260.25
TP Levels and RR: $1,057.04 (2.62)
REASONS FOR THE TRADE
Although this setup looks almost identical to the previous one we took (which was long), the two indicators I am using - Trend Volume RSI Analysis and Multi Time Frame Effective Volume Profile show clear divergence. The up move is no longer supported by the required volume, so I expect a dropdown. The Stop Loss is put at a relatively safe distance and the target is reasonably low. However, should this setup turn out to be valid, I would trial the SL and let it run. I would take only partial profits at the target.
If this setup turns out to be invalid, our previous long is still active and in profit, so we are effectively hedged.
Trade closed: stop reached
Unfortunately, our trade here was stopped as the price went through our SL and continued for another 2.38%. The overall analysis was correct and the price almost reached our target, but the tight SL kicked us out. This was a hedging trade to the ETH long that we opened the previous day, so practically we shouldn't have suffered a loss.Notes: I know some of you may be wondering why our SL is so close to the entry. A tight SL allows us to have a much better Risk : Reward Ratio (RRR). This means that we can be right less than 50% of the time and still make money than we lose, ending up net profitable. Of course, we need to be much more precise with our entries, but from my experience, the trade off is worth it.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.