BITCOIN SHOW REVERSAL SIGNAL 17 SAT JUNE (for education purpose)
BITCOIN ANALYSIS
1) The downtrend is defined by a parallel channel, where the top of the channel is marked on April 15th, and the bottom is on June 15th.
2) There was a triangle pattern formed, and the price broke out of this triangle after reaching 25,000, down from 30,000. (price trap 25,000 level and come back)
3) Currently, the price action suggests that there is potential for a bullish trend.
Trade Parameters and Risk Management:
1) Portfolio Size: Assume you have a portfolio size of $10,000.
2) Risk Per Trade: It’s recommended not to risk more than 1% of your portfolio on a single trade, which is $100 in this case. This is to maintain mental well-being and ensure sustainability in the long run.
3) Risk-Reward Ratio: The trade has a risk-reward ratio of 4, meaning that for every $100 risked, the potential reward is $400. It’s important to understand that a higher risk-reward ratio might result in a lower probability of the trade being successful.
4) Position Size: The position size for this trade is $2,300, which represents 23% of the total portfolio. This is substantial, considering the portfolio size, and one should be cautious as this involves leverage.
5) Leverage: Because the position size ($2,300) is a significant portion of the portfolio value ($10,000), it implies that leverage is being used. Leverage magnifies both gains and losses, so it’s essential to use it cautiously.
6) Potential Reward: If the trade is successful, the reward is 17% of the portfolio, or $400.
7) Potential Risk: The risk in case the trade doesn't go in the favorable direction is 4.3% of the portfolio, or $100.
This analysis includes using a large position size compared to the portfolio value, and this involves leverage. Traders should be aware that while leverage can amplify profits, it can also amplify losses. It’s crucial to have a proper risk management strategy in place, especially when using leverage.
1) The downtrend is defined by a parallel channel, where the top of the channel is marked on April 15th, and the bottom is on June 15th.
2) There was a triangle pattern formed, and the price broke out of this triangle after reaching 25,000, down from 30,000. (price trap 25,000 level and come back)
3) Currently, the price action suggests that there is potential for a bullish trend.
Trade Parameters and Risk Management:
1) Portfolio Size: Assume you have a portfolio size of $10,000.
2) Risk Per Trade: It’s recommended not to risk more than 1% of your portfolio on a single trade, which is $100 in this case. This is to maintain mental well-being and ensure sustainability in the long run.
3) Risk-Reward Ratio: The trade has a risk-reward ratio of 4, meaning that for every $100 risked, the potential reward is $400. It’s important to understand that a higher risk-reward ratio might result in a lower probability of the trade being successful.
4) Position Size: The position size for this trade is $2,300, which represents 23% of the total portfolio. This is substantial, considering the portfolio size, and one should be cautious as this involves leverage.
5) Leverage: Because the position size ($2,300) is a significant portion of the portfolio value ($10,000), it implies that leverage is being used. Leverage magnifies both gains and losses, so it’s essential to use it cautiously.
6) Potential Reward: If the trade is successful, the reward is 17% of the portfolio, or $400.
7) Potential Risk: The risk in case the trade doesn't go in the favorable direction is 4.3% of the portfolio, or $100.
This analysis includes using a large position size compared to the portfolio value, and this involves leverage. Traders should be aware that while leverage can amplify profits, it can also amplify losses. It’s crucial to have a proper risk management strategy in place, especially when using leverage.
