EthereumLong
Ethereum Breakout?
Updated
Ethereum looks like it may have a chance to breakout here. We've had a couple of fakeouts at this level before. It's at the top of a very long down channel and the daily has closed above it, but it could still fake out.
Be careful with looking at moving averages at the moment. Yes, they all have their nose pointing to the sky, but Eth has been ranging for many weeks now, so such an assertion is not as valid and you therefore would probably need to be a bit more careful taking a trending style trade on the daily timeframe.
An aggressive trade will be to take the trade on the close of this daily candle, given that crypto, when it truly breaks out, often doesn't look back.
If I was an institution, I might be looking to fade this breakout.
Order cancelled
So the divergence turned out to be a good warning signal not to take this entry right now. I did not enter. Also, the volume is just not there, and we've been range bound since the beginning of May.
Trade what you see, not what you hope to see.
Note
So the next thing to look for, is to see whether a cup and handle forms.
A tip for new traders, get into the habit of framing your ideas around trades in a logic manner, using IF THEN statements.
IF we form a cup and handle below horizontal resistance
THEN we enter just above the breakout level
IF the trade falls back below the breakout level
THEN we take half of our position off the table at level X and the other half at level y
IF the price continues north,
THEN take half of our profits at n and trail the other half with a stop set at a multiplier of p X ATR below.
You can start to monitor how your ideas trade in the real world over time, or even better than that, you can learn to code and start to test your ideas, write yourself indicators based on your parameters etc
Note
(I don't know if I have to clarify this legally, but I'm not a financial advisor,... clearly.)Note
This is the daily chart. Cup and handle forming nicely. There's every possibility of a breakout here. Also, I think it's generally accepted that Ethereum and Bitcoin are correlated, so think about the effects of the increasing interest over at the CME futures, we are VERY net long, but is it tme to be a contrarian?
Conventional wisdom is to set your stop where your trading idea no longer makes sense.
For me, I'd be looking at placing a stop at a 'ahem' safe distance below the handle with a stop entry above the level of the breakout. There will be some looking to fade here. Lets see how it goes. (Check out
Order cancelled
Invalidated. Eth just can't seem to get and stay above the long term downtrend resistance.
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