TNT/BTC LONG - How fractals will help you increase your R
Updated
Hey everyone!
Due to the fact that we have a finite amount of capital, trade selection becomes key.
What trade should we enter if we're following 5 setups that comply with our trading strategy?
All five with the same size? - but doesn't each setup have it's own timeframe and Risk-Reward-Ratio?
That's where it starts getting more tricky. The beast that we are confronting here is the idea of opportunity cost - capital allocation into any endeavor carries such a cost because there is a risk of our analysis being less than optimal.
And that's alright (if you don't punish yourself too harshly on the randomness of trading).
That's why I decided to share this setup on TNT/BTC with the intent of demonstrating this fact. As you can see, the setup is currently active from the biggest price structure and pending to trigger a fractal on a shorter timeframe.
This is great news, fractal patterns generally occur when our assessment of the main trend is correct, however let's go back to the main point here: having missed the main entry, the setup can still give us opportunities to ride the wave until the initial take profit, such as in this case.
But note, we are entering the market at a later stage, which leaves us less time in the market and with a greater Risk-Reward-Ratio if we take the entry and stop loss of the fractal setup (which is a setup by itself with take profit at 1040 sats) while taking the take profit level of the main setup.
In this instance, this approach adds 2R to your capital whilst diminishing the time you are in the market!
Marvelous and worthy to keep in mind for next time.
Take care,
Vlad The Crypto Trader
Due to the fact that we have a finite amount of capital, trade selection becomes key.
What trade should we enter if we're following 5 setups that comply with our trading strategy?
All five with the same size? - but doesn't each setup have it's own timeframe and Risk-Reward-Ratio?
That's where it starts getting more tricky. The beast that we are confronting here is the idea of opportunity cost - capital allocation into any endeavor carries such a cost because there is a risk of our analysis being less than optimal.
And that's alright (if you don't punish yourself too harshly on the randomness of trading).
That's why I decided to share this setup on TNT/BTC with the intent of demonstrating this fact. As you can see, the setup is currently active from the biggest price structure and pending to trigger a fractal on a shorter timeframe.
This is great news, fractal patterns generally occur when our assessment of the main trend is correct, however let's go back to the main point here: having missed the main entry, the setup can still give us opportunities to ride the wave until the initial take profit, such as in this case.
But note, we are entering the market at a later stage, which leaves us less time in the market and with a greater Risk-Reward-Ratio if we take the entry and stop loss of the fractal setup (which is a setup by itself with take profit at 1040 sats) while taking the take profit level of the main setup.
In this instance, this approach adds 2R to your capital whilst diminishing the time you are in the market!
Marvelous and worthy to keep in mind for next time.
Take care,
Vlad The Crypto Trader
Trade closed: stop reached
Shish, that was a bad one.Liked the concept but could not have played out in a worse way.
Onto the next.
Take care,
Vlad The Crypto Trader
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