ETHUSDT (ETHEREUM) DAILY TRADE SETUPS 2020/12/23SHORT TRADE SETUP: False breakout followed by price dump
In this scenario, we are waiting for price to break above the high of $670 and then breakdown for us to take a short position.
Entry criteria for opening a short position:
1. Price Action: Price breaks above the high of $670 and then rapidly falls below $670, forming a bull trap
2. Candlestick Pattern: A breakout candlestick (candle close above resistance @$670) followed by a breakdown candlestick (candle close below $670), ideally breakout and breakdown candlesticks are consecutive candles, but can also have a few candles in between the two.
3. Volume: Above average volume (volume above the average volume line) on both breakout candle and breakdown candle, ideally the breakdown candle's volume is a local high
4. MACD: MACD histogram topping out, as indicated by the histogram becoming less positive (color changing from dark green to light green)
Ideally we get all four confirmations for an entry, but sometimes we might take a trade when we have fewer confirmations. The more confirmations, the higher the win probability, though it also means you miss out on some profitable trades if you're only taking trades when we have all confirmations. It's up to your own risk appetite to decide when you feel comfortable entering. Make sure you practice proper risk management and money management.
If price breaks out above $670 with significant force, as indicated by volume and large size of green candle, we might look to go long on a retest of the $670 level turning from resistance to new support (S&R flip trade). We adapt to the market as market conditions change so that we've always moving with the markets and not against it.
I will be updating this trade as price enters the trade zone, and when we see confirmations for entering a trade, and will then provide stop loss and take profit targets.
MAKE SURE YOU FOLLOW ME SO THAT YOU DONT MISS TRADE SIGNALS AND CAN FOLLOW THE TRADE IN REAL TIME!
DISCLAIMER: I'M NOT A FINANCIAL ADVISOR AND THIS IS NOT FINANCIAL ADVICE, AND I WILL NOT BE RESPONSIBLE FOR YOUR WINS OR LOSSES, DYOR.
