BTCUSD 12h buying dips, setting targets, resistance and support
I plan to place my bets that we are in the beginning of a parabolic rise of the BTCUSD asset.
Lets sketch a trading plan. The trading plan needs to address the following:
1) When to enter. (just happened I placed the first entry at about $9,300)
2) When to take profits (just happened I took some already at $11,100)
3) When to re-enter, or to add to the position (a.k.a pyramiding. I added some at $10,800, and just re-entered at around $11,300)
4) how much to risk. I suggest risk levels at 5 to 10% of the total trading account equity for leveraged trades. (that what I do - not responsible for your losses, only for my own)
3) where to place a stop loss (if any). or trailing stops (if any).
4) when to exit the trade entirely.
Things we will need to enable the above plan.
1) trading signals. I suggest simply go by using 3 moving averages. ema20, ema50, ema200 looks good (guided somewhat by back-testing to 2018).
2) support and resistance levels. I suggest a Fibonacci trend extension to draw them. I will use the one that assumes March 2020 crash is an unusual sell-off not related to anything important. It is also useful a to be guided by whether the resulting levels correlate with obvious resistance/support lines on the chart. In the case shown in the chart - the -0.236 level of the extension picked the March 2020 bottom, the 0.236 level ($8,968) has served as solid support in the months of June and July, the 0.382 (at $10,538) seems also to nicely coincide with a multi-year resistance horizontal line that has been broken recently (though, not re-tested on longer time frames, and this fact does add some risk to the plan)
Hence is the plan:
1) we define bull market when the price action is consistently above ema200. ("consistently" would mean both ema20 and ema50 are above ema200 for several periods)
(of course, we are still considering fundamentals, news, and sentiments - we are not trading robots. we do better. sometimes we do give in to FOMO, yes. Sometimes we trade on emotions, and sometimes we convince ourselves we are in a bull run, just because we want to be in one, and sometimes we chose to ignore the raging pandemic in its entirety. What I am saying, as humans, we are still better at recognizing patterns and using intuition. And if FOMO is too strong, lets go for it. with an appropriate stop loss.)
2) We will consider taking profits at major resistance levels. - $11,808 ; $13,077, $14,884, $17,185, $23,800. We can also use these as profit taking targets for leveraged trades.
3) to re-enter (or to add to the position) - we will consider points when the BTCUSD touches ema20, and we will double down when it touches ema50. For leveraged longs we will place stop-losses below assumed support levels (at the current moment - its somewhere below $10,500
For spot trading - we will not use any stop loss. or, if you cannot, i mean, absolutely cannot live without some stop loss, and itching to liquidate all BTC- let it be $8,900
4) Apart from our profit targets, we will also consider exiting the trade when ema20 crosses ema50 followed by a touch of ema200. when price action along with ema20/50 is below ema200, we will proclaim it to be the end to the bull market.
Lets sketch a trading plan. The trading plan needs to address the following:
1) When to enter. (just happened I placed the first entry at about $9,300)
2) When to take profits (just happened I took some already at $11,100)
3) When to re-enter, or to add to the position (a.k.a pyramiding. I added some at $10,800, and just re-entered at around $11,300)
4) how much to risk. I suggest risk levels at 5 to 10% of the total trading account equity for leveraged trades. (that what I do - not responsible for your losses, only for my own)
3) where to place a stop loss (if any). or trailing stops (if any).
4) when to exit the trade entirely.
Things we will need to enable the above plan.
1) trading signals. I suggest simply go by using 3 moving averages. ema20, ema50, ema200 looks good (guided somewhat by back-testing to 2018).
2) support and resistance levels. I suggest a Fibonacci trend extension to draw them. I will use the one that assumes March 2020 crash is an unusual sell-off not related to anything important. It is also useful a to be guided by whether the resulting levels correlate with obvious resistance/support lines on the chart. In the case shown in the chart - the -0.236 level of the extension picked the March 2020 bottom, the 0.236 level ($8,968) has served as solid support in the months of June and July, the 0.382 (at $10,538) seems also to nicely coincide with a multi-year resistance horizontal line that has been broken recently (though, not re-tested on longer time frames, and this fact does add some risk to the plan)
Hence is the plan:
1) we define bull market when the price action is consistently above ema200. ("consistently" would mean both ema20 and ema50 are above ema200 for several periods)
(of course, we are still considering fundamentals, news, and sentiments - we are not trading robots. we do better. sometimes we do give in to FOMO, yes. Sometimes we trade on emotions, and sometimes we convince ourselves we are in a bull run, just because we want to be in one, and sometimes we chose to ignore the raging pandemic in its entirety. What I am saying, as humans, we are still better at recognizing patterns and using intuition. And if FOMO is too strong, lets go for it. with an appropriate stop loss.)
2) We will consider taking profits at major resistance levels. - $11,808 ; $13,077, $14,884, $17,185, $23,800. We can also use these as profit taking targets for leveraged trades.
3) to re-enter (or to add to the position) - we will consider points when the BTCUSD touches ema20, and we will double down when it touches ema50. For leveraged longs we will place stop-losses below assumed support levels (at the current moment - its somewhere below $10,500
For spot trading - we will not use any stop loss. or, if you cannot, i mean, absolutely cannot live without some stop loss, and itching to liquidate all BTC- let it be $8,900
4) Apart from our profit targets, we will also consider exiting the trade when ema20 crosses ema50 followed by a touch of ema200. when price action along with ema20/50 is below ema200, we will proclaim it to be the end to the bull market.
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