Although price never reach my interesting shorting area on the daily timeframe ($7,500 - $7,900), the current price action has created a bearish curve on the 1hr timeframe indicating a possible short-term trend reversal.
This possible trend reversal is based on the 1hr timeframe (lower timeframe) meaning you need to lower your target expectations, with a smaller position size. That is, you shouldn't have a target of, say, $6,000 or lower. And, you should only risk 0.5% - 1% of your account size if you normally trade 2% of your account size on the 4hr timeframe.
Nothing has changed on the weekly and daily timeframe that indicates the price will reverse at the current price level (from up move to down move). On the weekly timeframe, there has not been one single bearish candle since $4,000.
On the daily timeframe, the immediate support I mentioned previously at $6,800 has not yet been compromised.
On the 4hr timeframe, many are drawing a head and shoulders pattern because that's what the textbook says. Not saying that the h&s was drawn incorrectly but if you look at it from a risk reward perspective, you can see that it has a very poor risk reward ratio. Would you really take the trade based on h&s?
Some people thought that I have missed the shorting opportunity because 'right or wrong' is the only thing they care about. Let's look at it from a risk reward perspective again, even if you made profits by shorting around $7300-$7400, you would have made only 1:1 risk reward. Plus, you would have been stopped out previously at around $6,800. Basically, you have made zero profits.
To sum up, both the weekly and daily timeframe have not yet show much bearish sign. Hence, if you want to take the 1hr short trade, you should understand that the win rate is not much higher than 50% - 60% and you should prepare yourself to get stopped out. But what makes me interested in taking this short trade is the risk reward is higher than 2 (up to 4+ if price can reach the 2nd target).
------------------------------------------------------------------------------------------------------------------------
Past analysis (click & play):
Bought between $5,000 - $5,500. Sold around $6,850 (30% profits)
Bitcoin, perfect call (300% profits)
Entered $8450, sold around $9,800 (16% profits)
Bitcoin, bought between 6.8k - 7.3k (40% profits)
Perfect call on 12k weekly resistance
Bitcoin dropped from 12k to 7k as expected (40% fall)
Bitcoin dropped to 3.5k as expected (40% fall)
Bitcoin, bought $6220 target $8480 (36% profits)
Perfect re-bought target
Education posts:
2618 trade
Top-down analysis
How I draw the trendline
This possible trend reversal is based on the 1hr timeframe (lower timeframe) meaning you need to lower your target expectations, with a smaller position size. That is, you shouldn't have a target of, say, $6,000 or lower. And, you should only risk 0.5% - 1% of your account size if you normally trade 2% of your account size on the 4hr timeframe.
Nothing has changed on the weekly and daily timeframe that indicates the price will reverse at the current price level (from up move to down move). On the weekly timeframe, there has not been one single bearish candle since $4,000.
On the daily timeframe, the immediate support I mentioned previously at $6,800 has not yet been compromised.
On the 4hr timeframe, many are drawing a head and shoulders pattern because that's what the textbook says. Not saying that the h&s was drawn incorrectly but if you look at it from a risk reward perspective, you can see that it has a very poor risk reward ratio. Would you really take the trade based on h&s?
Some people thought that I have missed the shorting opportunity because 'right or wrong' is the only thing they care about. Let's look at it from a risk reward perspective again, even if you made profits by shorting around $7300-$7400, you would have made only 1:1 risk reward. Plus, you would have been stopped out previously at around $6,800. Basically, you have made zero profits.
To sum up, both the weekly and daily timeframe have not yet show much bearish sign. Hence, if you want to take the 1hr short trade, you should understand that the win rate is not much higher than 50% - 60% and you should prepare yourself to get stopped out. But what makes me interested in taking this short trade is the risk reward is higher than 2 (up to 4+ if price can reach the 2nd target).
------------------------------------------------------------------------------------------------------------------------
Past analysis (click & play):
Bought between $5,000 - $5,500. Sold around $6,850 (30% profits)
Bitcoin, perfect call (300% profits)
Entered $8450, sold around $9,800 (16% profits)
Bitcoin, bought between 6.8k - 7.3k (40% profits)
Perfect call on 12k weekly resistance
Bitcoin dropped from 12k to 7k as expected (40% fall)
Bitcoin dropped to 3.5k as expected (40% fall)
Bitcoin, bought $6220 target $8480 (36% profits)
Perfect re-bought target
Education posts:
2618 trade
Top-down analysis
How I draw the trendline
Note
Don't be too bearish guys. As I mentioned, weekly and daily timeframe have not yet show much bearish sign. Now, on the 1hr timeframe there seems to be an uptrend channel building up which might be heading up to retest the $7000-$7050 resistance. If you have already entered the short around $6980, you can keep holding the trade or you can consider to move your stop-loss to break-even. It's really up to you.
But if you have not yet enter, the best way to short is to wait for price to go sideways (like a box) at around $7000 and break below the box (what I taught you in my recent analysis). An example is shown below:
Note
If you have entered the short. You can either move your stop-loss to break-even (if you have not done so), or take some profits if you'd like).
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.
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.