Hi everyone, in this technical analysis I will share how to trade BTC in this consolidation phase. The price is relatively stable and the volatility per candle has dropped significantly.
Also at 100eyes we can see that way less alerts have been given in the last week compared to the month before. The price moves less fast for any coin at the moment.
I have a few suggestions on how to trade during these moments. Make sure you trade smaller fractions of your portfolio and focus on scalp trades mostly inside the yellow area while you hold your larger positions for trading the breakout.
The reason behind this is that once the consolidation is over, BTC might make a very large move. A move upwards will pull all BTC pairs down immediately. A move downwards often results in a major drop in the entire crypto marketcap and also results in lower BTC pairs.
This is why you'd want to tread carefully and for instance only trade up to 50% of your portfolios worth. This will mean you will have enough money left to trade the larger positions when the actual moves begin.
The second advice is about the duration of your positions. If you enter a trade, do so with the aim to leave the trade within a good few hours or so. Time in the market is relatively dangerous at the moment, but there are great short term scalp opportunities.
The two opportunities that I highlight in the chart above relate to a short position and a long position within the horizontal parallel channel that BTC is in right now.
The channel is roughly between $10,500 and $9,750. Even though these trades are scalp trades only, they still provide a nice 5% opportunity on both ways.
Make sure you set the stop-loss directly outside the channel to minimize risk.
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- Trading Guru
-------------------------------------------------------------- Disclaimer! This post does not provide financial advice. It is for educational purposes only!
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Good ideas in here. I tend to trade longer frames. There are times when I cannot be near a screen and thus allow the market to come to me then look at the decision it makes. Have a look at my decision boxes. Many thanks
Trading-Guru
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@Rule72, I don't really understand it, we both trade on the 1h here right? can you please elaborate?
Rule72
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@Trading-Guru, I use the 1h and other time frames to draw my chart, but try to stay outside of patterns as I do not have the time ifo screen to manage these moves, so I avoid reversion trades inside of current building chart patterns (unless I am quite sure the volatility is going to stay low). I wait for it to enter one of my boxes and see how it reacts. My orders are on the book resting and I will delete one if things do not set up as anticipated. This would give me enough time to follow my plan with little to no market order trading. Just my way and completely appreciate that others might not agree or approach it as I do. With frames, I meant "space on the chart" and see how it could come across as "time frames". All the best.
Trading-Guru
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I’m curious to hear your thoughts! Let’s make use of the fantastic tradingview community and give each other feedback.
Dutifull
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@Trading-Guru, hey man, i took a look. If it closes below 20 day average as seen on this shot with the arrow. I'd go for a short position.
This is however on a short timeframe.
Looking at the daily chart, i'd be looking for an entry for a long position. because we're very close to a big support, this could be a precursor for a big move up.
Something along the lines of this:
Trading-Guru
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@Dutifull, Thanks for this view! Really well explained, what kind of 20 day average are you looking at? I often go for the 21 SMA instead of the 20 SMA because it nicely filters out week-weekend behaviors buy taking an exact multiple of seven. This is something I can highly recommend to improve the quality of your signals