XVG - Trading on a Bed of Fractals
Updated
Hi there,
this is a trading idea based on the educational post "XVG - Deriving Trends and Channels from a Fractal" i recently made. If you want to know how to mess up a chart with trend lines until it nearly becomes unreadable you should read that post.
That trade idea will be closed when XVG has reached all target levels. If XVG drops beyond this chart we will wait for a comeback. This chart could become partly/totally invalid or added by a new fractal (of comparable size) developing on the chart. There are many ifs and bearing in mind that we are watching on the 1D chart, a lot of time will pass as the chart develops.
Now let's have a look at some Indicators.
RSI
- has overhead resistance since it's high at the start of july
- is on a slight uptrend since it's low at the end of june forming a bullish divergence
- latest local uptrend (blue line) was broken
MACD
- is in an uptrend channel since it's lows at beginning of june forming a bullish divergence
Stochastic
- on a downtrend and loosing momentum since it's high at the start of may
DMI
- ADX is on a downtrend since it's high by the mid of may
- DI+ is in an uptrend since it's low by start of june
- DI- has overhead resistance since it's high by end of june. It's lows imply a shy downtrend
The bullish divergences are indicating a sign of reversal without giving an exact point of time. If the oscillators having overhead resistance and will breakout sustainly establish above them, you will know the time has come. Please take your favorite set of indicators for validation and look into lower timeframes to spot earlier signs of reversal.
this is a trading idea based on the educational post "XVG - Deriving Trends and Channels from a Fractal" i recently made. If you want to know how to mess up a chart with trend lines until it nearly becomes unreadable you should read that post.
That trade idea will be closed when XVG has reached all target levels. If XVG drops beyond this chart we will wait for a comeback. This chart could become partly/totally invalid or added by a new fractal (of comparable size) developing on the chart. There are many ifs and bearing in mind that we are watching on the 1D chart, a lot of time will pass as the chart develops.
Now let's have a look at some Indicators.
RSI
- has overhead resistance since it's high at the start of july
- is on a slight uptrend since it's low at the end of june forming a bullish divergence
- latest local uptrend (blue line) was broken
MACD
- is in an uptrend channel since it's lows at beginning of june forming a bullish divergence
Stochastic
- on a downtrend and loosing momentum since it's high at the start of may
DMI
- ADX is on a downtrend since it's high by the mid of may
- DI+ is in an uptrend since it's low by start of june
- DI- has overhead resistance since it's high by end of june. It's lows imply a shy downtrend
The bullish divergences are indicating a sign of reversal without giving an exact point of time. If the oscillators having overhead resistance and will breakout sustainly establish above them, you will know the time has come. Please take your favorite set of indicators for validation and look into lower timeframes to spot earlier signs of reversal.
Note
Warning: If you decide to make a trade, and in case of negative developments, i strongly recommend to set a stop-loss based on your personal risk-exposure and risk-management. Never ever go all-in or expose to much risk on your hard earned money. But that's completely your personal decision. Do not blindly follow any idea at all but always do your own research (DYOR) before you make an investment. In the end you take the responsibility when you click on "buy" and by then you will be the only one to blame. Holding negative positions (HODL) could -but must not always- avoid losses in longer terms. Loosing and gaining is a daily business in this very special market with it's high volatility. Get used to it and drop your emotions before you trade. I learned it the hard way and i'm still recovering so take my advise, it's free of charge. (:To get the most out of this pattern and to find the best opportunity, we are looking for (an) entry point(s) in the support zone (208-254) where we expect a reversal.
Here are example buy-in targets based on the levels found in the support zone: 208, 220, 229, 238, 254. The deeper you fish, the harder to catch but with a higher reward. You could split your investment to cover more than a single target to maximize your gains or whatever your personal favor is. A conservative approach would be buying in the upper half of the support zone (229-254) with a higher risk exposure when using stop-loss. Agressive would be like 229-208 with a possibility if not catching anything but a low risk exposure when using stop-loss. Make your individual buy-in targets within the support zone based on your personal strategy and risk-exposure. Those levels are just examples. You don't have to use them. Make your own decision but do not be greedy as greed is an emotion which must be left out when you trade.
Take this as an example with a conservative approach.
Capital allocation:
1% of the total capital
Buy-in:
254 (high probability of buying, lower potential of gains, higher exposure of risk when using stop-loss)
Stop-Loss:
10% below extreme support @ 208 = 187 (again, make your own decision but beware of spikes that could drop below extreme support and close your position before the price recovers and reverses. it's all about risk-exposure and risk-management.)
Total Risk:
0.27% of the total capital
Now when talking about sell-target we will look for some levels to take profit. Always take small portions of profit on the way up if the size of your position allows splitting. It's completely ok if you prefer selling the whole position on your very own first target. The more profit you take on the way up, the less you can loose, the less becomes your risk-exposure and the more capital you have for future trades. The market can change quick. The maximum potential of this pattern is 97% profit but that's plain theory (not impossible though). As per example we use a buy-in target of 254 so the potential is "just" 61%. You could also find your own target levels using e.g. fibonacci-tools. It's up to you how much sell-levels you define. For this example i stick to the levels derived by the fractal (pink dotted and levels plus the zone-entry of resistance).
Target 1: 272 (7%)
Target 2: 306 (20%)
Target 3: 342 (34%)
Target 4: 367 (44%)
Target 5: 378 (48%)
Target 7: 393 (54%)
Target 8: 411 (61%)
The profits in brackets are based on a buy-in target of 254. Good luck with your trades and see you soon. Thanks to all the nice people at TV who share their knowledge for free.
Sincerely
Disclaimer: This information is not a recommendation to buy or sell. It is to be used for educational purposes only.
Note
Zoomed in view on the indicators.Note
This is a zoomed in view to see the trend lines acting as support and resistance. Meanwhile we wait for the market to push XVG further towards, and finally into, the support zone. Have your fishing rod and bait prepared!Note
Here is quick update on the current situation of XVG from the "Sir". (:The good news is that XVG reversed exactly at the downside target level. But right now that's the only good news. The bad news is that the who crypto market is declining rapidly, following BTC's current downtrend. The total market capitalization is back to the level of October 2017. That's a big alarm sign! Be cautious in trading. It's not yet sure if and when we see a sustaining reversal in the market. Of course that applies to XVG too. No one can predict the future of the crypto market, it's fate is bound to the fate of BTC. I will cover a look into the oscillators of XVG later, right now i'm short of time.
Again, please take care and be cautious when you trade until we see a global and sustaining reversal. We are in a very dangerous situation with alarm bells ringing all over the place. See you later.
Cheers,
Eddie
Eddie
Disclaimer
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