BTC Trend analysis with Donchian and Macaron Tools / SHORT setup
Initial idea: Price seems like it tried to break above 30k twice, and failed, this makes me feel that it needs to grab more buyers from lower prices and come up stronger.
1st chart:
Donchian channel is already broken since 21 Apr at a price of 27983, this sets up the price action wise break needed to go down. Macaron tools are indicators I made to better visualize the trend (Thanks to @Madrid for the heatmap idea.). They are very similar to moving average crosses, but they are not. For the last 4 days it was trying to get full red, and for the last 2, it is. This means both the trend and the price action is already bearish. If you don't want to wait for the 2nd charts setup (basically confirmation), the way to go now is shorting my dear bitcoin.
Entry: Current Price (27700)
Take Profit: 24640 / because that's the latest resistance area
Stop Loss: 30130 / because it's just a bit above the donchian trend
Trailing Stop Loss: Donchian(11, 10) this simply means the highest high of the last 10 bars
2nd chart:
Donchian channel here has a much longer length and thus breaking it is harder, also it has never been broken since the up movement from 19k, highlights the heaviness of it. When it breaks it'll probably be caused by a dump that started before (probably in the 1st setup), thus if it continues to go down we should just ride the wave.
Entry: 26840 / because donchian is at 26919 so if the price continues to go down after hitting that and also breaks 26850, it'll continue (probably, hopefully)
Take Profit: 24640 and (23400/23250) / if you want to be fully safe just close your position at the first tp. If you want to take multiple ones go with the 1st and the 3rd but use trailing stop. You can customize your position however you like.
Stop Loss: 30130 / if it breaks above here the trend will be questionable (it may just hit and come down too, but less probable) so we'll just close the trade
Trailing Stop Loss: Same with the 1st setup, the highest high of the last 10 bars
Thanks to @KivancOzbilgic for the donchian channel indicator.
Since this is my first post here, please give me any feedback you may have. Thanks for reading, happy trading!
PS: I will not be taking the trade because of the CPI announcement tomorrow.
1st chart:
Donchian channel is already broken since 21 Apr at a price of 27983, this sets up the price action wise break needed to go down. Macaron tools are indicators I made to better visualize the trend (Thanks to @Madrid for the heatmap idea.). They are very similar to moving average crosses, but they are not. For the last 4 days it was trying to get full red, and for the last 2, it is. This means both the trend and the price action is already bearish. If you don't want to wait for the 2nd charts setup (basically confirmation), the way to go now is shorting my dear bitcoin.
Entry: Current Price (27700)
Take Profit: 24640 / because that's the latest resistance area
Stop Loss: 30130 / because it's just a bit above the donchian trend
Trailing Stop Loss: Donchian(11, 10) this simply means the highest high of the last 10 bars
2nd chart:
Donchian channel here has a much longer length and thus breaking it is harder, also it has never been broken since the up movement from 19k, highlights the heaviness of it. When it breaks it'll probably be caused by a dump that started before (probably in the 1st setup), thus if it continues to go down we should just ride the wave.
Entry: 26840 / because donchian is at 26919 so if the price continues to go down after hitting that and also breaks 26850, it'll continue (probably, hopefully)
Take Profit: 24640 and (23400/23250) / if you want to be fully safe just close your position at the first tp. If you want to take multiple ones go with the 1st and the 3rd but use trailing stop. You can customize your position however you like.
Stop Loss: 30130 / if it breaks above here the trend will be questionable (it may just hit and come down too, but less probable) so we'll just close the trade
Trailing Stop Loss: Same with the 1st setup, the highest high of the last 10 bars
Thanks to @KivancOzbilgic for the donchian channel indicator.
Since this is my first post here, please give me any feedback you may have. Thanks for reading, happy trading!
PS: I will not be taking the trade because of the CPI announcement tomorrow.