In the last consolidation breakout I posted I gave a 5 hour window for a breakout. Perfectly in the middle of that, 3 hours after posting, we got the huge drop from 7450 to 6950 on August 4th.
Now we have an even bigger setup for a breakout, with a smaller setup inside it. Our major trend lines converge 12 hours from now (01:00 UTC, 28/08), and our minor trend lines converge 5 hours from now (18:00 UTC, 27/08).
We've set alerts to execute longs if price crosses above the green line and shorts if price crosses below the red line, with these lines set just outside of our consolidation range. If we get a fakeout and price reverses we will be exiting at 6718, the tip of our minor green triangle. Otherwise we will be looking to ride a breakout in either direction for a 2-3 hour period and then re-assess, expecting heavy support/resistance around 6530 and 6890.
Now we have an even bigger setup for a breakout, with a smaller setup inside it. Our major trend lines converge 12 hours from now (01:00 UTC, 28/08), and our minor trend lines converge 5 hours from now (18:00 UTC, 27/08).
We've set alerts to execute longs if price crosses above the green line and shorts if price crosses below the red line, with these lines set just outside of our consolidation range. If we get a fakeout and price reverses we will be exiting at 6718, the tip of our minor green triangle. Otherwise we will be looking to ride a breakout in either direction for a 2-3 hour period and then re-assess, expecting heavy support/resistance around 6530 and 6890.
Comment:
Right as we were posting this we got a large 3 min candle as shown below, that has now put us in a long position. Feels a little early for my liking, possibly a fakeout, but we'll continue to ride this out with the rules above.
Comment:
Fakeout confirmed, dropped back below our 6718 stop loss after entering at 6738.
Price shot up to 6769 and just as powerfully dropped back to just below our low minor consolidation boundary. Volume has spiked on the 5m but we're seeing a lot of resistance around this lower boundary.
We're back to where we started. A cross of the green/red lines will trigger another entry.
Price shot up to 6769 and just as powerfully dropped back to just below our low minor consolidation boundary. Volume has spiked on the 5m but we're seeing a lot of resistance around this lower boundary.
We're back to where we started. A cross of the green/red lines will trigger another entry.
Comment:
We've crossed our buy trigger again at 6737. We're long.
Price shot up to 6784 and is bouncing around again at around 6750. We're actually going to shift our stop loss to 6699.0 based on the amount of support we've seen at exactly 6700.0 (as I've mentioned below in the comments). We want to avoid a series of small losses if we see a series of fakeouts. Even if price drops back into range our bias is now to the long side. We are at risk of the pattern breaking down if price starts ranging just above our breakout zone.
Price shot up to 6784 and is bouncing around again at around 6750. We're actually going to shift our stop loss to 6699.0 based on the amount of support we've seen at exactly 6700.0 (as I've mentioned below in the comments). We want to avoid a series of small losses if we see a series of fakeouts. Even if price drops back into range our bias is now to the long side. We are at risk of the pattern breaking down if price starts ranging just above our breakout zone.
Trade closed: target reached:
In the original post we mentioned the major trendlines converge a 01:00 UTC. After dancing above the trendline for a while, eventually we got the breakout at 00:30 UTC. In that initial post we mentioned that we expected resistance at 6890, which is the red horizontal line on the chart. As you can see price is now hovering around the number.
Price has gone as high as 6963 so this exit could've been timed better, but we're closing our long at 6902 now after entering at 6737.
Price has gone as high as 6963 so this exit could've been timed better, but we're closing our long at 6902 now after entering at 6737.
Comment:
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