A symmetrical triangle was formed.
In a symmetrical triangle, the breakout direction usually follows the trend, in this is case it is an upward breakout. However, there's a high possibility that it breaks downward. Therefore, wait for the breakout to happen before trading the breakout. Alternatively, we can trade within the symmetrical triangle
Trading Strategy:
Option 1: Trade when the candle closes outside of the triangle.
Break upwards: Take profit at 200
Break downwards: Take profit at 40
Stop loss position: 6% from breakout price
Option 2:
Trade inside the symmetrical triangle, when the price hits the lower trend line.
Place a buy position with take profit when the price hits the upper trend line.
Stop loss position: 6% from the upper or lower trend line.
In a symmetrical triangle, the breakout direction usually follows the trend, in this is case it is an upward breakout. However, there's a high possibility that it breaks downward. Therefore, wait for the breakout to happen before trading the breakout. Alternatively, we can trade within the symmetrical triangle
Trading Strategy:
Option 1: Trade when the candle closes outside of the triangle.
Break upwards: Take profit at 200
Break downwards: Take profit at 40
Stop loss position: 6% from breakout price
Option 2:
Trade inside the symmetrical triangle, when the price hits the lower trend line.
Place a buy position with take profit when the price hits the upper trend line.
Stop loss position: 6% from the upper or lower trend line.
Note
Buy at the next market open since the price had reached the lower trend line. As the market is on the downside these few days and we are going to have a buy position. To reduce risk, buy less.
Stop loss: If the price closed below the trend line.
Take profit: Touch or close to the upper trend line.
Trade closed: stop reached
Had opened the buy position at 102.97. Closed the trade at 90.60 as the price had closed below the trend line.
Loss @ 12.2%. As the position was opened with relatively lesser funds as the market was on a selling pressure. Therefore loss was limited.
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.