Experimental: short term trading ideas BTCUSD
I am working on shorter term trading strategies, looking for bounces of typically 1% - 3% in BTC off of EMA's, channel boundaries, horizontal or diagonal support/resistance lines, and fib levels. I wanted to document a few to make sure I'm not kidding myself about success rates.
Having seen Bitcoin break out to ATH today, it doesn't make sense to FOMO in long with new capital. We can wait for a retest of the 19,900 resistance which should now act as support if we have truly broken into fresh price discovery. We need to look for the 5 min and 15 min EMA200's rising to provide support, these can provide an extra hint about where the bottom of the retest could be.
We can even try to go short prior to this point, as I think we are in a parallel ascending channel and we will put another high on the top of the channel in the coming hours. In this case we need to look for RSI divergence at the next high, preferably on 5 min, 15 min and 1hr timescales (but the focus here is 15 min). We must acknowledge that the trend on larger timescales is bull, so the short trade is a much more risky scenario.
Neither of these scenarios are guaranteed to happen, we will have to wait and see if subsequent price action supports them in the next hours.
I plan to scale in and out of trades over a range of price levels and use a 1:1 R:R ratio, which may not be to most traders taste, but I think it provides the best protection against stop-hunting wicks which are a risk on these timescales.
Having seen Bitcoin break out to ATH today, it doesn't make sense to FOMO in long with new capital. We can wait for a retest of the 19,900 resistance which should now act as support if we have truly broken into fresh price discovery. We need to look for the 5 min and 15 min EMA200's rising to provide support, these can provide an extra hint about where the bottom of the retest could be.
We can even try to go short prior to this point, as I think we are in a parallel ascending channel and we will put another high on the top of the channel in the coming hours. In this case we need to look for RSI divergence at the next high, preferably on 5 min, 15 min and 1hr timescales (but the focus here is 15 min). We must acknowledge that the trend on larger timescales is bull, so the short trade is a much more risky scenario.
Neither of these scenarios are guaranteed to happen, we will have to wait and see if subsequent price action supports them in the next hours.
I plan to scale in and out of trades over a range of price levels and use a 1:1 R:R ratio, which may not be to most traders taste, but I think it provides the best protection against stop-hunting wicks which are a risk on these timescales.
Comment:
We overshot the top of the channel but have developed into a small ascending broadening wedge on the 5 min with bearish divergence on 5 min thru 1Hr timescales. It’s possible we make a new higher high in this wedge, if so then I’ll check for continued divergence then enter a short. If we break below the wedge then also go short (but with a smaller target). Going short is hugely risky in the current bullish momentum so capital allocated will be small.
Order cancelled:
The bull was too strong, trade entry criteria not met.