Dear Steemians!
After seeing what happened a few hours earlier I thought I will share how that trade could have been played and what I am waiting for today next!
Earlier today
If you check the 1 hour chart of BTCUSD earlier today the price was moving in an equilibrium pattern, check the higher lows and lower highs in a tightening range. This is a very common pattern, however what gives us opportunity is when this pattern breaks to the upside.
In the chart above you can see 1) as the first resistance break is the first entry opportunity. The confirmation is the 2 when the earlier lower high has also broken. This means we can prepare for a breakout!
Let's check this trade in detail:
- if we entered at point 1) 11709 USD
- if we entered at point 2) 12127 USD
- best exit opportunity was 12717 USD
Profitability was: 1)8,6% and 2) 4,87% in ~3 hours. Of course the exit is the most optimal, but even gaining 70% of the above is a great opportunity!
What's next
What I am currently looking at is the same equilibrium pattern for BTCUSD on the hourly and 15 minute chart:
My entry level would be 12710 USD and I am also considering to play the same bounce on ETH or LTC.
Please be aware this pattern can also break bearish so I am only doing anything if it is a bull break.
Please be aware everything I shared above is just my opinion and is shared only for discussion not as financial advice.
Have a nice weekend!
Great models, I'm wanting to start day trading BTC and LTC but how do you protect against a huge potential up swing?
My fear is taking a small profit on a limit sell order and missing out when the price keeps going up.
Hello, first of all thanks for the feedback I am happy you like it! If you mean missing out on a big up-swing I believe the only real protection is to have a "HODL" position as well :) On the other hand I am not selling these positions ASAP, I only take part of the profit on target (like 30 to 50 percent) and then I let the rest of the position ride a bit with a stop loss. Worst case I only take half profit and the other half is stopped out still above the entry level. With this I am able to take advantage of bigger then expected upswings.
I think you make a good point that you should be waiting to sell until you have made your target, I think FOMO and the exciting of day trading gets the better of people at times. I started dabbling at little bit with LTC so we will see how it goes.
good luck with that!
@Originalworks