ETH Forms a Bullish Pennant 👀
Updated
ETHUSD 4hr chart is currently forming a Bullish Pennant.
This is a continuation pattern typically and is formed by an upward sloping trend line along with a downward sloping trend line. Forming Lower Highs with Higher Lows until a point of convergence or break out.
Often this pattern remains valid if fully formed with in 30 trading sessions or less.
To measure the target you simply draw the flagpole and stack it on top of the pennant at the point of break out.
The measure moved would put the target over 2,200 but my target is near 2,100 as there is a bit of resistance in this area and we are in a Bear Market.
Stop loss could be in a few places - 2% below the break out, 2% below lower trend line of the pattern or just below the previous pivot low. Waiting for the break out would minimize/lower risk. Each Stop loss position is ok based on your own risk tolerance.
At 6:1 a bit more risk is acceptable in my opinion but I would never take anything less than 2:1 RR in a Bear Market.
Is this a set up you like or a pattern you trade? Let me know in the comments. 👇🏻👇🏻👇🏻
This is a continuation pattern typically and is formed by an upward sloping trend line along with a downward sloping trend line. Forming Lower Highs with Higher Lows until a point of convergence or break out.
Often this pattern remains valid if fully formed with in 30 trading sessions or less.
To measure the target you simply draw the flagpole and stack it on top of the pennant at the point of break out.
The measure moved would put the target over 2,200 but my target is near 2,100 as there is a bit of resistance in this area and we are in a Bear Market.
Stop loss could be in a few places - 2% below the break out, 2% below lower trend line of the pattern or just below the previous pivot low. Waiting for the break out would minimize/lower risk. Each Stop loss position is ok based on your own risk tolerance.
At 6:1 a bit more risk is acceptable in my opinion but I would never take anything less than 2:1 RR in a Bear Market.
Is this a set up you like or a pattern you trade? Let me know in the comments. 👇🏻👇🏻👇🏻
Comment
After a fake out candle - why its always important to wait for confirmation- we are now trading below the pattern. You could look to cut losses until we trade back inside or above. Stop loss has not hit but came very close.Comment
Follow up - Great set up but there are a few factors here to reflect on in order to improve and consider going forward, or to note in your trading journal1. Trading bullish patterns in a macro bearish trend - How has the coin or commodity responded in the past
2. Consider going short if the pattern breaks to the down side. ( I decided if the pattern broke to the down side to cut my losses and observe, not to open a short
3. Take into account, while this is a bullish pattern and a nice set up, it was formed directly below resistance.
Trades do not always work out in our favor and thats ok. Position size and having a strategy are very critical for this reason.
I will continue to monitor ETH, I like trading it and jumping up to the 4hr we are now forming a new pattern. 👀
What are your favorite coins to trade?
Do you use a trading journal?
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