BitcoinShort
BTCUSD Trade Idea - SHORT AT TOP OF LONG TERM PENNANT - 23/05/20
Updated
Please leave a comment for feedback on my ideas and a LIKE if you agree with this plan and logic.
We have seen a bounce off support levels yesterday in the upward sloping band which tells me that we are seeing a majority of speculators re-entering into the market.
As shown on the chart on around 4th of June we will be coming to a key point where two trendlines meet and a decision has to be made on breaking 1 of these patterns.
I am in favour of the longer-term pattern due to the fact that it has been holding up for a longer timeframe which implies for me that more traders would be trading this trend.
Note: I will be using leverage trading for this trade so there will be a risk for me of losing 10% of my active trading portfolio
ENTRY PLAN
I have set up for a trade to get to this apex point as shown in the trading zones on the chart and then to short at this level.
The Stop Loss trendline I have put in will be just under $450 away from the entry point but it will decline the longer we stay in the trade which minimises the risk the longer the trade is validated.
So to summarise what my plan is:
EXIT PLAN
Things to watch out for if this plan happens in the points to exit the trade and make a profit.
This will be the 5th (or 6th depending on how you count it) that we have tested this resistance from the start of 2018 and failed to break through which tells me that speculators that are bullish are only will to push the price up to this level and then they get overrun by BEARISH speculators that think this is the upper band and sell to buy in at a lower price. Due to this happening quite a few times in this instance (within the last 2 weeks) I think we are going to have a hard drop due to the BULLS getting exhausted.
The first SUPPORT I will look at moving my stop loss will be when the price drops to below 8600 in which I will set it to 9200ish which will lock in some profits for me at worst-case scenario. If this happens I will update the trade idea to put in the new stop losses as we could fall a lot lower with the absolute lowest being 4100ish which is the bottom of the 2-year pennant (if this happens I will look at spot buying as much BTC as I can).
LOSING SCENARIO
If we enter into the trade and then get stopped out I will be highly confident we are going to higher levels in which I will need to formulate a new plan.
FOLLOW ME and let me know your thoughts as I am a new trader and beginning to believe in the power of Technical Analysis.
Maintain or gain
We have seen a bounce off support levels yesterday in the upward sloping band which tells me that we are seeing a majority of speculators re-entering into the market.
As shown on the chart on around 4th of June we will be coming to a key point where two trendlines meet and a decision has to be made on breaking 1 of these patterns.
- Pennant which has been forming over the last 2 years (upper boundary)
- Upward sloping channel from drop 2 months ago from under 4000 (lower boundary)
I am in favour of the longer-term pattern due to the fact that it has been holding up for a longer timeframe which implies for me that more traders would be trading this trend.
Note: I will be using leverage trading for this trade so there will be a risk for me of losing 10% of my active trading portfolio
ENTRY PLAN
I have set up for a trade to get to this apex point as shown in the trading zones on the chart and then to short at this level.
The Stop Loss trendline I have put in will be just under $450 away from the entry point but it will decline the longer we stay in the trade which minimises the risk the longer the trade is validated.
So to summarise what my plan is:
- Wait until we hit the trading zone and not above it
- Confirm a bounce and enter a short when leaving the trading zone
- Set Stop Loss at the necessary level when the trade is entered
EXIT PLAN
Things to watch out for if this plan happens in the points to exit the trade and make a profit.
This will be the 5th (or 6th depending on how you count it) that we have tested this resistance from the start of 2018 and failed to break through which tells me that speculators that are bullish are only will to push the price up to this level and then they get overrun by BEARISH speculators that think this is the upper band and sell to buy in at a lower price. Due to this happening quite a few times in this instance (within the last 2 weeks) I think we are going to have a hard drop due to the BULLS getting exhausted.
The first SUPPORT I will look at moving my stop loss will be when the price drops to below 8600 in which I will set it to 9200ish which will lock in some profits for me at worst-case scenario. If this happens I will update the trade idea to put in the new stop losses as we could fall a lot lower with the absolute lowest being 4100ish which is the bottom of the 2-year pennant (if this happens I will look at spot buying as much BTC as I can).
LOSING SCENARIO
If we enter into the trade and then get stopped out I will be highly confident we are going to higher levels in which I will need to formulate a new plan.
FOLLOW ME and let me know your thoughts as I am a new trader and beginning to believe in the power of Technical Analysis.
Maintain or gain
Note
Looks like we only had a rise to 9300 so it has come to sgort for my trade to activate. I will cancel all my automated trades for this as if we go into the trading zone again it will need to be reevaluated.Will wait for us to stabilise to see where support lies.
Order cancelled
This is the revised trading plan which is still valid 28/5/20
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.