BITCOIN (BTC/XBT) DAILY LONG&SHORT TRADE SETUPS 2021/01/03
MARKET OVERVIEW
TRADES(S) RECAP: LATEST 3 TRADES
TRADE SETUPS
Below are two potential trade setups that I would be interested in trading. Regardless of the path that the price takes, I will be monitoring the market for a valid trade entry signal.
Long Trade Setup #1: Breakout and Continuation
To open a long position, we are waiting for price to create a new high, move back down to test previous resistance as support and then bounce back up.
Trade Entry Confirmation:
1. Price Action: Price creates space between the price and the $33.3K level, falls back down to $33.3K and bounce back up.
2. Candlestick Pattern: A bullish candlestick pattern such as a bullish engulfing candle, a pinbar , or a multiple candlestick breakdown (a large red candle followed by multiple green candles that eventually close above the open/high of the large red candle)
2.1 Ideally Engulfing / Break candle has a large candle body with small wicks
2.2 Ideally Engulfing /Break candle closes near the highs of the candle
3. Volume: Above average volume on the bullish engulfing candle, pinbar , or on any of the multiple green candles that eventually break the red candle (ideally on the candle that breaks)
4. MACD: MACD histogram bottoming out, as indicated by the histogram becoming less negative (changing from red to pink)
Long Trade Setup #2: Retest and Continuation (200MAs)
To open a long position, we are waiting for price to retrace back down to test the 200MAs and then continue moving up.
Trade Entry Confirmation:
1. Price Action: Price needs to move back down to the 200MAs @$30.8-31.2 and bounce back up.
2. Candlestick Pattern: A bullish candlestick pattern such as a bullish engulfing candle, a pinbar, or a multiple candlestick breakdown (a large red candle followed by multiple green candles that eventually close above the open/high of the large red candle)
3. Volume: Above average volume on the bullish engulfing candle, pinbar, or on any of the multiple green candles that eventually break the red candle (ideally on the candle that breaks)
4. MACD: MACD histogram bottoming out, as indicated by the histogram becoming less negative (changing from red to pink)
ENTRY SIGNALS
Trade calls will be separated into two categories, official and unofficial. The reason for the distinction is that official entry calls are only for high probability trade setups whereas unofficial calls might have slightly lower probability of winning but positive net profitability due to high risk reward. As I see a lot of traders, do not practice proper risk management and position sizing, I want to protect them from the second type of trades. At the same time, I know there are more sophisticated traders who can take advantage of both types of calls. So this is the solution that I’ve come up with, which is to separate the two trade types into two types of entry calls. Official entry calls will come with detailed entry, stop loss and take profit levels, whereas unofficial trade entries might or might not and will rely a little bit more on the trader themselves to manage the trade. This is one way to distinguish the more experienced traders from the newer ones. If you are unable to enter an unofficial trade entry without those details, then it means that you shouldn’t be taking those trades and should stick only to the official trades.
1. Official entry calls will be posted using “trading active” post type.
2. Potential good trading opportunities that I’m not calling an official entry on will be posted using “comments” post type.
ENTRY CONFIRMATIONS
Ideally we get all confirmations for an entry, but sometimes we might take a trade when we have fewer confirmations. The more confirmations, the higher the win probability, though it also means you miss out on some profitable trades if you're only taking trades when we have all confirmations. It's up to your own risk appetite to decide when you feel comfortable entering a trade. You can also adjust position size based on level of conviction, entering a bigger position when there are more confirmations. Make sure you practice proper risk management and money management.
TRADE MANAGEMENT
I have put in preliminary Stop Loss and Take Profit on the chart, but these will depend on how the entry setup forms, so I will update when we have a valid entry signal.
Stop Loss: We typically put a SL around the high / low of the entry area, though we might adjust based on market conditions such as high ATR ( average true range ) or long wicks.
Take Profit: We typically aim for at least a 2:1 RRR (risk reward ratio), but you can decide to take profits earlier, adjust stop loss as we get into profit, take partial profit, leave a small portion for larger gains, etc. How you want to manage depends on your own risk appetite and what you are comfortable with.
RISK MANAGEMENT / POSITION SIZING
Trading is a marathon, not a sprint. The key is to stay in the game long enough for long term probabilities to play out. Even strategies with 90%+ win rate will have losing trades, so if you go all in one every trade, eventually you will blow up your account. My recommendation is to dynamically change your position size based on the size of the stop loss so that you are risking 1-2% of your total account size on any given trade. This means that if you’re wrong and the trade hitting the stop loss, you lose 1-2% of your account. As an illustration, if your account balance is 1BTC, then the most you should lose on any given trade should be 0.01-0.02BTC. Notice that I didn’t mention leverage here. Because what leverage (3X, 5X,10X, etc.) doesn’t matter here. What matters is the position size that matches up with a 1-2% account balance risk.
HOW TO USE MY ANALYSIS
Every day I post potential areas of interest and trade setups based on the latest market conditions and market structure. Once price reaches one of the identified areas of interest and gives a valid entry signal, I will post the entry, along with stop loss and take profit levels, in real time. No hindsight 20/20 here. Everything is in real time for full transparency and so that you can actually enter the same trades that I'm entering. Some trades only give us a few minutes to enter, which is why it's imperative that you follow me so that you don't miss out. Below are two ways that you can use the analysis that I publish daily:
1. You can integrate my analysis into your own analysis, for example by using it as a starting point, or as confirmation of your own TA, or to identify potential trades for yourself.
2. You follow the trade setups and trade entry signals that I give in real time.
MAKE SURE YOU FOLLOW ME SO THAT YOU DONT MISS TRADE SIGNALS, GET THE LATEST SL AND TP LEVELS, AND FOLLOW THE TRADE PLAY OUT IN REAL TIME!
DISCLAIMER: I'M NOT A FINANCIAL ADVISOR AND THIS IS NOT FINANCIAL ADVICE, AND I WILL NOT BE RESPONSIBLE FOR YOUR WINS OR LOSSES, DYOR.
QUESTION: Would you like me to conduct technical analysis on alts? If yes, please let me know in the comments which alts you’d like me to cover.
- Price Action: There was a ton of volatility in BTC, with thousand(s) dollar movements to the upside and downside. BTC made a new high at $33.3K, retraced back down to $30.3, and now creating a new high as i am typing this.
- Chart Patterns: No significant chart patterns.
- Areas of Interest: The area(s) of interest for us are the previous resistance @$33.3K and the 200MAs at $30.8K-31.2K. Once price reaches one of our areas of interest and gives us a valid entry signal, I will update the trade, so make sure you follow me to get the trade entry signals in real time.
TRADES(S) RECAP: LATEST 3 TRADES
- 2020/01/01: We had another winning trade! We entered long @ $29.1K, Stop Loss @ $28.8K, and priced reached a high of $29469 so far, giving us a risk reward ratio of 1.5:1, meaning if you risked 1BTC on this trade, you could've made 1.5BTC.
- 2020/01/01: We had a winning trade! We entered short @ $29.3K, with a Stop Loss @ ~$29.6K, and price reached a low of $28.6K, giving us a risk reward ratio of 2:1, meaning if you risked 1BTC on this trade, you could've made 2BTC. As this was a false breakout trade, we could've also entered a short on ETH, entered short @ $735, SL $743, price reached a low of $714, giving a risk reward ratio of 2.5:1, meaning if you risked 1BTC on this trade, you could've made 2.5BTC.
- 2020/12/31: We had a winning trade! We entered short @ $29.3K, with a Stop Loss @ ~$29.5K, and price reached a low of $28.8K, giving us a risk reward ratio of 2.5:1, meaning if you risked 1BTC on this trade, you could've made 2.5BTC. As this was a false breakout trade, you could've also decided to enter a short on ETH. Entry would've been $745, SL $749, price reached a low of $725 so far, giving a risk reward ratio of 5:1, meaning if you risked 1BTC on this trade, you could've made 5BTC.
TRADE SETUPS
Below are two potential trade setups that I would be interested in trading. Regardless of the path that the price takes, I will be monitoring the market for a valid trade entry signal.
Long Trade Setup #1: Breakout and Continuation
To open a long position, we are waiting for price to create a new high, move back down to test previous resistance as support and then bounce back up.
Trade Entry Confirmation:
1. Price Action: Price creates space between the price and the $33.3K level, falls back down to $33.3K and bounce back up.
2. Candlestick Pattern: A bullish candlestick pattern such as a bullish engulfing candle, a pinbar , or a multiple candlestick breakdown (a large red candle followed by multiple green candles that eventually close above the open/high of the large red candle)
2.1 Ideally Engulfing / Break candle has a large candle body with small wicks
2.2 Ideally Engulfing /Break candle closes near the highs of the candle
3. Volume: Above average volume on the bullish engulfing candle, pinbar , or on any of the multiple green candles that eventually break the red candle (ideally on the candle that breaks)
4. MACD: MACD histogram bottoming out, as indicated by the histogram becoming less negative (changing from red to pink)
Long Trade Setup #2: Retest and Continuation (200MAs)
To open a long position, we are waiting for price to retrace back down to test the 200MAs and then continue moving up.
Trade Entry Confirmation:
1. Price Action: Price needs to move back down to the 200MAs @$30.8-31.2 and bounce back up.
2. Candlestick Pattern: A bullish candlestick pattern such as a bullish engulfing candle, a pinbar, or a multiple candlestick breakdown (a large red candle followed by multiple green candles that eventually close above the open/high of the large red candle)
3. Volume: Above average volume on the bullish engulfing candle, pinbar, or on any of the multiple green candles that eventually break the red candle (ideally on the candle that breaks)
4. MACD: MACD histogram bottoming out, as indicated by the histogram becoming less negative (changing from red to pink)
ENTRY SIGNALS
Trade calls will be separated into two categories, official and unofficial. The reason for the distinction is that official entry calls are only for high probability trade setups whereas unofficial calls might have slightly lower probability of winning but positive net profitability due to high risk reward. As I see a lot of traders, do not practice proper risk management and position sizing, I want to protect them from the second type of trades. At the same time, I know there are more sophisticated traders who can take advantage of both types of calls. So this is the solution that I’ve come up with, which is to separate the two trade types into two types of entry calls. Official entry calls will come with detailed entry, stop loss and take profit levels, whereas unofficial trade entries might or might not and will rely a little bit more on the trader themselves to manage the trade. This is one way to distinguish the more experienced traders from the newer ones. If you are unable to enter an unofficial trade entry without those details, then it means that you shouldn’t be taking those trades and should stick only to the official trades.
1. Official entry calls will be posted using “trading active” post type.
2. Potential good trading opportunities that I’m not calling an official entry on will be posted using “comments” post type.
ENTRY CONFIRMATIONS
Ideally we get all confirmations for an entry, but sometimes we might take a trade when we have fewer confirmations. The more confirmations, the higher the win probability, though it also means you miss out on some profitable trades if you're only taking trades when we have all confirmations. It's up to your own risk appetite to decide when you feel comfortable entering a trade. You can also adjust position size based on level of conviction, entering a bigger position when there are more confirmations. Make sure you practice proper risk management and money management.
TRADE MANAGEMENT
I have put in preliminary Stop Loss and Take Profit on the chart, but these will depend on how the entry setup forms, so I will update when we have a valid entry signal.
Stop Loss: We typically put a SL around the high / low of the entry area, though we might adjust based on market conditions such as high ATR ( average true range ) or long wicks.
Take Profit: We typically aim for at least a 2:1 RRR (risk reward ratio), but you can decide to take profits earlier, adjust stop loss as we get into profit, take partial profit, leave a small portion for larger gains, etc. How you want to manage depends on your own risk appetite and what you are comfortable with.
RISK MANAGEMENT / POSITION SIZING
Trading is a marathon, not a sprint. The key is to stay in the game long enough for long term probabilities to play out. Even strategies with 90%+ win rate will have losing trades, so if you go all in one every trade, eventually you will blow up your account. My recommendation is to dynamically change your position size based on the size of the stop loss so that you are risking 1-2% of your total account size on any given trade. This means that if you’re wrong and the trade hitting the stop loss, you lose 1-2% of your account. As an illustration, if your account balance is 1BTC, then the most you should lose on any given trade should be 0.01-0.02BTC. Notice that I didn’t mention leverage here. Because what leverage (3X, 5X,10X, etc.) doesn’t matter here. What matters is the position size that matches up with a 1-2% account balance risk.
HOW TO USE MY ANALYSIS
Every day I post potential areas of interest and trade setups based on the latest market conditions and market structure. Once price reaches one of the identified areas of interest and gives a valid entry signal, I will post the entry, along with stop loss and take profit levels, in real time. No hindsight 20/20 here. Everything is in real time for full transparency and so that you can actually enter the same trades that I'm entering. Some trades only give us a few minutes to enter, which is why it's imperative that you follow me so that you don't miss out. Below are two ways that you can use the analysis that I publish daily:
1. You can integrate my analysis into your own analysis, for example by using it as a starting point, or as confirmation of your own TA, or to identify potential trades for yourself.
2. You follow the trade setups and trade entry signals that I give in real time.
MAKE SURE YOU FOLLOW ME SO THAT YOU DONT MISS TRADE SIGNALS, GET THE LATEST SL AND TP LEVELS, AND FOLLOW THE TRADE PLAY OUT IN REAL TIME!
DISCLAIMER: I'M NOT A FINANCIAL ADVISOR AND THIS IS NOT FINANCIAL ADVICE, AND I WILL NOT BE RESPONSIBLE FOR YOUR WINS OR LOSSES, DYOR.
QUESTION: Would you like me to conduct technical analysis on alts? If yes, please let me know in the comments which alts you’d like me to cover.
Comment:
Unofficial long trade entry
Comment:
Reasons why it’s an entry:
1. We retraced close to the previous high of 33.3K. Levels don’t have to be precise price points.
2. MACD history ran bottomed out, we -115 to -99
3. We had a multiple candle break whereby the latest 15min candle closed above the body of the large red candle
Reasons why it’s an unofficial and not an official entry:
1. Pricewise, we would ideally like it to touch and even break a bit below 33.3k before going back up, indicating buying pressure at previous resistance, confirming that resistance has now turned to support
2. Volume wise, it was quite low. We didn’t even have above average volume, let alone a volume peak
3. Candlestickwise, while we did close above the body of the red candle, we would ideally like it to candle a bit above the entire candle, including the wicks.
Aggressive / more sophisticated traders can consider an entry here.
More conservative / beginner traders can wait to see if we get a more ideal setup.
1. We retraced close to the previous high of 33.3K. Levels don’t have to be precise price points.
2. MACD history ran bottomed out, we -115 to -99
3. We had a multiple candle break whereby the latest 15min candle closed above the body of the large red candle
Reasons why it’s an unofficial and not an official entry:
1. Pricewise, we would ideally like it to touch and even break a bit below 33.3k before going back up, indicating buying pressure at previous resistance, confirming that resistance has now turned to support
2. Volume wise, it was quite low. We didn’t even have above average volume, let alone a volume peak
3. Candlestickwise, while we did close above the body of the red candle, we would ideally like it to candle a bit above the entire candle, including the wicks.
Aggressive / more sophisticated traders can consider an entry here.
More conservative / beginner traders can wait to see if we get a more ideal setup.
Comment:
Price properly retesting 33.3K. Let’s see if we can flip previous resistance into new support. If we can, we might get a long signal soon. Stay tuned.
Comment:
Careful, 33.3k doesn’t seem to be holding up. A larger correction might be in the books.
Comment:
If we can close this 15min candle above 33.4K, we will likely have a high probability long trade signal. Stay tuned.
Comment:
Btc long market entry
Trade active:
This is an official trade
Comment:
Entry: as close to 33380 as you can
SL: aggressive below 32.9k, conservative below 32.7k
TP: 33.8k, 34.3k, 34.7k, moon
SL: aggressive below 32.9k, conservative below 32.7k
TP: 33.8k, 34.3k, 34.7k, moon
Comment:
TP1 reached! Congrats to all those who took the trade! Another winning trade adding to our win streak!
Comment:
Price once again below 33.3k and went below our initial stop loss after hitting out TP1. This shows the importance of securing profits as while sometimes trades go to the moon, other times markets will give you some profits and then reverse. Hope you took profits and/or moved stop loss to entry/above entry so that you were able to capture some gains. Will post a new daily post.
Comment:
Now that we’ve retested 33.3 as resistance and gotten rejected, let’s see if we can get a bounce at the 200MAs. If the 200MAs give way as well, then we’re likely seeing a larger correction. 33.3k was resistance turned to support turned to resistance. It’s an important pivot point. We should keep our eyes on it in the near future as it could potentially confirm bullish or bearish momentum and give us another trade entry.
