ETH Trade Setups 2020/12/22
Updated
Daily ETH Trade Setups
There are two potential trade setups that could develop and we can wait patiently to see if either setup gives us a good trade entry
Scenario 1: False Breakdown at Horizontal Support
In this first scenario, we are waiting for price to hit the horizontal support @~$595 and then bounce back up.
Confirmation criteria for entering a long position:
1. Candlestick: A breakdown candlestick (candle close below support @~$595) followed by a reclaiming candlestick (candle close above $595), ideally breakdown and reclaiming candlesticks are consecutive candles, but also have a few candles in between.
2. Volume: Above average volume (volume above the average volume line) on both breakdown candle and reclaiming candle, ideally the reclaiming candle's volume is a local high
3. MACD: MACD histogram bottoming out, as indicated by the histogram becoming less negative (color changing from red to pink)
Ideally we get all three confirmations above for an entry, but sometimes we might only get 1 or 2 confirmations. The more confirmations, the higher the win probability.
Scenario 2: Rejection at 200MAs
In the second scenario, we are waiting for price to go up to the dynamic resistance zone of the 200MAs and then fall back down. This zone is currently projected to be $630-$635, but could be slightly different once we get to that level based on price action.
Confirmation criteria for entering a short position:
1. Candlestick: A bearish candlestick pattern such as a bearish engulfing candle or a multiple candlestick breakdown (a large green candle followed by multiple red candles that eventually close below the open/low of the large green candle)
2. Volume: Above average volume on the bearish engulfing candle / on any of the multiple red candles that eventually break the green candle (ideally on the candle that breaks)
3. MACD: MACD histogram topping out (changing from dark green to light green
Ideally we get all three confirmations above for an entry, but sometimes we might only get 1 or 2 confirmations. The more confirmations, the higher the win probability.
Please follow for daily trading levels and potential trade setups on Bitcoin and Ethereum. I will be posting trade setups at about this time every day.
There are two potential trade setups that could develop and we can wait patiently to see if either setup gives us a good trade entry
Scenario 1: False Breakdown at Horizontal Support
In this first scenario, we are waiting for price to hit the horizontal support @~$595 and then bounce back up.
Confirmation criteria for entering a long position:
1. Candlestick: A breakdown candlestick (candle close below support @~$595) followed by a reclaiming candlestick (candle close above $595), ideally breakdown and reclaiming candlesticks are consecutive candles, but also have a few candles in between.
2. Volume: Above average volume (volume above the average volume line) on both breakdown candle and reclaiming candle, ideally the reclaiming candle's volume is a local high
3. MACD: MACD histogram bottoming out, as indicated by the histogram becoming less negative (color changing from red to pink)
Ideally we get all three confirmations above for an entry, but sometimes we might only get 1 or 2 confirmations. The more confirmations, the higher the win probability.
Scenario 2: Rejection at 200MAs
In the second scenario, we are waiting for price to go up to the dynamic resistance zone of the 200MAs and then fall back down. This zone is currently projected to be $630-$635, but could be slightly different once we get to that level based on price action.
Confirmation criteria for entering a short position:
1. Candlestick: A bearish candlestick pattern such as a bearish engulfing candle or a multiple candlestick breakdown (a large green candle followed by multiple red candles that eventually close below the open/low of the large green candle)
2. Volume: Above average volume on the bearish engulfing candle / on any of the multiple red candles that eventually break the green candle (ideally on the candle that breaks)
3. MACD: MACD histogram topping out (changing from dark green to light green
Ideally we get all three confirmations above for an entry, but sometimes we might only get 1 or 2 confirmations. The more confirmations, the higher the win probability.
Please follow for daily trading levels and potential trade setups on Bitcoin and Ethereum. I will be posting trade setups at about this time every day.
Note
Price has reached our hotizontal support @ ~$595. Will wait for candlestick, volume, and macd confirmation to open a long position. Stayed tuned so you will get the trade signal should one come up.Note
For those more risk-seeking, can enter long position. fuller analysis coming up in a couple of minutes.Note
Lets break down what has occured.1. Price Action: we have seen price break below support and then reclaim support
2. Candlestick: We have a bullish engulfing candlestick pattern. However, based on my trading history, it is not ideal to have a candle that is completely below support. We prefer to have the breakdown candle that open above support and close below it. We would also prefer to see the reclaim candle close further up above support as opposed to just barely above it.
3. Volume: We have above average volume, which is good. Would be even better if the engulfing candle's volume was higher than the engulfed candle though they are pretty similar
4. MACD: MACD histogram bottomed and turned from red to pink
In summary, out of the 4 things we want to see for an entry, 2 are good (price action and macd), 1 is ok (volume), and 1 is not ideal (candlestick).
For conservative traders, can decide to pass up on this opportunity. For aggressive traders, can decide to go long here but maybe with half or a third of your normal position size as this is a higher risk trade.
Note
For those who decide to enter, can consider below for SL and TP:SL: around local bottom of ~$588-589
TP: Take partial profits along the way, $601, $605, $610, $615, and then leave some for moon ride.
You can also apply your own risk management and profit taking / stop loss rules.
Note
TP1 Reached! Already 1:1 risk reward. Hope you made some profits. Up to you if you want to take some/all profit, move sl up to entry, etc. remember to always book profits!Note
TP2 Reached! 2:1 RRR! Hope you made good profits!Note
Back with access to computer, so sending an update here.This was an amazing trade that delivered great profits! We entered ~$596, with SL ~$589, and it has hit all of our TPs, with price hitting a high of $638, which gave us a 6:1 risk reward, meaning that if you risked 1BTC on this trade, you could've made 6BTC in about 16Hours! I will be posting today's trade setups in a few minutes, so make sure to follow to get the trade setups and entry signals in real time!
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