BTC confirms breakout exhaustion, will retrace to 21k from 24.3k
Volume is a GREAT trend tool!
As a matter of fact, I got so extremely obsessed with learning how to trade on volume that I spent days upon days going through different setups that seemed to yield consistent rewards. I have spent several days back-testing this method and have come up with very impressive win rates. It so far has beaten every other strategy I have used or seen before.
****IMPORTANT NOTE ON TRADING VOLUME: Due to the fact that exchanges vary, I have decided to use the TRADINGVIEW BTC index as a more reliable way to observe volume..... Because volume is different amongst all crypto exchanges, I highly recommend sticking to either this index specifically, or one off of BINANCE, even if that is not the exchange you're trading with.
The entire premise is fairly simple.
UPTRENDS:
3 swings on an uptrend (3 higher highs in a row) that are made on HIGHER volume at each swing will CONFIRM the trend.
3 swings on an uptrend (3 higher highs in a row) that are made on LOWER volume at each swing will confirm that the trend has exhausted and reversal is imminent.
DOWNTRENDS:
3 swings on a downtrend (3 lower lows in a row) that are made on HIGHER volume at each swing will CONFIRM the trend.
3 swings on a downtrend (3 lower lows in a row) that are made on LOWER volume at each swing will confirm that the trend has exhausted and reversal is imminent.
*CAVEAT
As perfectly illustrated in this example, the trend will not always immediately go in the exact direction it confirms towards. In this case the downtrend was confirmed by 3 swings down, but the price still managed to make a higher high. You CAN play this swing by entering long after price breaks the high with a measured move of the trading range extended from the high.
Price will tend to move apx the same distance as the retracement AFTER the 3rd swing is confirmed. In our case, we measure from the bottom of the 3rd confirmed swing low to the high that we will be making at around 24.3k. We will then apply that full measurement to the bottom of the lowest confirmed 3rd swing down so that we know where our downside target is.
As you can also see, trend exhaustion upward is evident in the higher highs we are making on lower volume. Once we make a new high soon, and volume confirms the 3rd swing higher was on lower volume than the previous 2 highs before it, the trend will be confirmed as EXHAUSTED and reversal is imminent.
It is safe to start a SHORT trade once the 3 high swings are confirmed on lower volume (as I'm expecting).
As a matter of fact, I got so extremely obsessed with learning how to trade on volume that I spent days upon days going through different setups that seemed to yield consistent rewards. I have spent several days back-testing this method and have come up with very impressive win rates. It so far has beaten every other strategy I have used or seen before.
****IMPORTANT NOTE ON TRADING VOLUME: Due to the fact that exchanges vary, I have decided to use the TRADINGVIEW BTC index as a more reliable way to observe volume..... Because volume is different amongst all crypto exchanges, I highly recommend sticking to either this index specifically, or one off of BINANCE, even if that is not the exchange you're trading with.
The entire premise is fairly simple.
UPTRENDS:
3 swings on an uptrend (3 higher highs in a row) that are made on HIGHER volume at each swing will CONFIRM the trend.
3 swings on an uptrend (3 higher highs in a row) that are made on LOWER volume at each swing will confirm that the trend has exhausted and reversal is imminent.
DOWNTRENDS:
3 swings on a downtrend (3 lower lows in a row) that are made on HIGHER volume at each swing will CONFIRM the trend.
3 swings on a downtrend (3 lower lows in a row) that are made on LOWER volume at each swing will confirm that the trend has exhausted and reversal is imminent.
*CAVEAT
As perfectly illustrated in this example, the trend will not always immediately go in the exact direction it confirms towards. In this case the downtrend was confirmed by 3 swings down, but the price still managed to make a higher high. You CAN play this swing by entering long after price breaks the high with a measured move of the trading range extended from the high.
Price will tend to move apx the same distance as the retracement AFTER the 3rd swing is confirmed. In our case, we measure from the bottom of the 3rd confirmed swing low to the high that we will be making at around 24.3k. We will then apply that full measurement to the bottom of the lowest confirmed 3rd swing down so that we know where our downside target is.
As you can also see, trend exhaustion upward is evident in the higher highs we are making on lower volume. Once we make a new high soon, and volume confirms the 3rd swing higher was on lower volume than the previous 2 highs before it, the trend will be confirmed as EXHAUSTED and reversal is imminent.
It is safe to start a SHORT trade once the 3 high swings are confirmed on lower volume (as I'm expecting).
