ETHEREUM (ETHUSDT) DAILY LONG&SHORY TRADE SETUPS 2020/12/30
Updated
MARKET OVERVIEW
TRADES(S) RECAP
Yesterday we had a winning trade! We entered a long @ $703, with Stop Loss @ $690, and price reached a high of $747.50, giving a risk reward ratio of over 3:1, meaning if you risked 1BTC on this trade, you could've made more than 3BTC.
TRADE SETUPS
Below are two potential trade setups. Given the bullish bias, the most likely scenario is "Long Trade Setup #1: Breakout and Continuation", but 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 $748 with force, creating space between the price and the $748 level, falls back down to $748 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 @ $748 and then fall back down.
Trade Entry Confirmation:
1. Price Action: Price breaks above the high of $748 and then rapidly falls below $748, forming a bull trap
2. Candlestick Pattern: A breakout candlestick (candle close above $748) followed by a breakdown candlestick (candle close below $748)
2.1 Ideally breakout and breakdown candlesticks are consecutive candles, but can also have a few candles in between the two candlesticks
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.
Sorry for the late post today, had to go to the hospital. Thanks for your support. 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.
UPDATES: Going forward, I will be adding chart patterns and previous trades onto the the chart. Let me know if there are other things you guys want me to lay out on the charts.
- Price Action: After reaching a high of $748, price retraced to the 200MAs @~$700 (where we took a long), and is now back up consolidating near the highs, giving us a bull bias.
- Chart Patterns: We have an ascending triangle pattern, which typically breaks to the upside, giving us a bull bias.
- Areas of Interest: The area(s) of interest for us is the highs of $748. 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
Yesterday we had a winning trade! We entered a long @ $703, with Stop Loss @ $690, and price reached a high of $747.50, giving a risk reward ratio of over 3:1, meaning if you risked 1BTC on this trade, you could've made more than 3BTC.
TRADE SETUPS
Below are two potential trade setups. Given the bullish bias, the most likely scenario is "Long Trade Setup #1: Breakout and Continuation", but 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 $748 with force, creating space between the price and the $748 level, falls back down to $748 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 @ $748 and then fall back down.
Trade Entry Confirmation:
1. Price Action: Price breaks above the high of $748 and then rapidly falls below $748, forming a bull trap
2. Candlestick Pattern: A breakout candlestick (candle close above $748) followed by a breakdown candlestick (candle close below $748)
2.1 Ideally breakout and breakdown candlesticks are consecutive candles, but can also have a few candles in between the two candlesticks
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.
Sorry for the late post today, had to go to the hospital. Thanks for your support. 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.
UPDATES: Going forward, I will be adding chart patterns and previous trades onto the the chart. Let me know if there are other things you guys want me to lay out on the charts.
Note
Potential long entry here on ETH. This is not one of my typical trade entries, but wanted to call it out because I think it does present a good risk reward opportunity and maybe will make sense for some of you. We went below the ascending triangle but have now closed within it again, indicating that the breakdown was likely a false breakdown to shake out longs, in which case price should continue up within the ascending triangle. For those that trade this kind of strategy, this could be a good entry here.
Note
I want to reiterate that this isn’t one of my well-tested strategies/setups. My well tested strategies have hundreds of backtested and live trades to back them up. This is not one of them. But still a good opportunity so I’m pointing it out. Cheers.Note
The bullish momentum wasn’t sustained and we are retracing a bit. Let’s see if price can hold here and make another move up. A break below, especially a close below, $716 would be trade invalidation.Note
Nice. Price held and moved up. Can take partial/full profits near highs of $748 / around current levels. Can also move sl to entry/in profit. Always secure profits! Can also leave a portion to run in case we have a sustained breakout above 748. Congrats to those who took this trade!
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