Short
Good Risk Reward to Short LTC/BTC
This is good risk reward trade up here to short. That doesn't mean its a guarantee, but you win this trade 15% of the time, you will be profitable. Here is what I like:
1. I like that this has potential to form a typical head and shoulders if it fails to go much higher
2. Notice the volume spikes on the initial move up were much more aggressive. So far the volume on this move up is much lower
3. There is an order block right here on the 4H
4. We are in that pocket between the 60-80% pullback that is usually a good entry (OTE)
I started a position with some orders a bit higher. Wanted to see if we get another reaction before going big. I think if we just march through this area without a pull back and get back to the recent highs, I will close this trade. As an asset that continues to test the same area (.01300) is more inclined to break it. So I won't give this that much room to work. If we get some selling and move down then great. If we punch through that area, I get out. Since I think this has potential to be the last burst before a big move down the risk reward is well worth it.
Target 1 - Range low at .01130
Target 2 - Test breakout at .00980
Target 3 - New lows?
I will take profit at both the first 2 targets and then I'd likely leave some open but as usual it depends on BTC and crypto in general.
Please keep in mind that LTC has been a leader so if it does start to move up, then it could be a good sign for BTC and crypto in general.
1. I like that this has potential to form a typical head and shoulders if it fails to go much higher
2. Notice the volume spikes on the initial move up were much more aggressive. So far the volume on this move up is much lower
3. There is an order block right here on the 4H
4. We are in that pocket between the 60-80% pullback that is usually a good entry (OTE)
I started a position with some orders a bit higher. Wanted to see if we get another reaction before going big. I think if we just march through this area without a pull back and get back to the recent highs, I will close this trade. As an asset that continues to test the same area (.01300) is more inclined to break it. So I won't give this that much room to work. If we get some selling and move down then great. If we punch through that area, I get out. Since I think this has potential to be the last burst before a big move down the risk reward is well worth it.
Target 1 - Range low at .01130
Target 2 - Test breakout at .00980
Target 3 - New lows?
I will take profit at both the first 2 targets and then I'd likely leave some open but as usual it depends on BTC and crypto in general.
Please keep in mind that LTC has been a leader so if it does start to move up, then it could be a good sign for BTC and crypto in general.
Note
So we had a strong run right to the key dotted line and it was met with good selling. Thats the first test. If the LTC bulls are strong they will punch through this area and I will close the trade with only my initial order.
At this point, I now want the bears to prove that they are sitting in this area before I add to this trade. If they cannot hold .01260 today then I will take a small stop loss. There would be too much risk of testing the recent highs and I don't want to hold into that area.
Note
I stopped out of this position. It wicked out and has since gone down, but I would not short it until I see more signs of a weakness. In other words, I needed to see more aggressive selling to add or hold this short. if it finds support here it will go up to .013 or higher.
Note
Even though I was wicked out, I will be observing this. We did have a different chart structure on LTCBTC on binance and we did get a lot of high volume selling in the area.
I'm not in a rush to re-enter but if I see more signs of weakness, I'm open to making another attempt to trade short as I never put in a big position. The wick barely got me and in hindsight it was a mistake to make it that tight considering crypto volatility.
Note
One last thing. I'm also watching BTC and if you follow me, you know I'm looking for $3900 area to add short. If we happen to move up there and LTC doesn't get back above .01260, then that would be another sign of sellers in that area.Note
This is the reaction I wanted to see. I took another small trade short. If we get a bump I will add and then put my stop above that last wck. If that wick falls then I will not try again and this stop will cost me 3.5%. I still think the reward was worth it and the trade is the right idea. Volatility just caught me.
Note
I'm getting out of this trade. LTCBTC is behaving more bullish than bearish. When BTC moves up a small amount, LTCBTC is moving up big. Good volume on todays move back to test .01250 area and I'm not seeing follow through from bears so I will no longer be shorting it.
I think BTC has a good chance of testing $3950 and I believe LTCBTC will either break new highs or test .01300 area if that happens. I still think if we go down, then LTCBTC will end up having a far move to drop, but you need to see signs of selling and distribution and I'm not seeing it yet.
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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.