quantmaven

Ethereum: Risk management 101

BINANCE:ETHUSD   Ethereum
After I called the bottom around 1725, Ethereum bounced back as high as 2200 today. I will be honest I sold all my positions above 1950 today. Why? Because this is simply a risk management move. The price of 2200 is the level where price meets the dynamic resistance of the triangle. We have to keep it real and remember these two points: this triangle has the shape of a descending triangle and we are in a bear market. Here is the smartest way to play this: Sell at the pivot point and wait for a confirmation. If there's an official close above 2200 in the 4h chart, this would make the bull market official so buy again. If price keeps falling and falling then maybe the bears were right and there will be a continuation to the downside and you will be happy you are 100% in stablecoin. It is safer to stay on the sidelines at this price and wait for a confirmation to preserve the large gains made over the last couple days. Maybe it means losing a 2-5% move sure, but it is better to be safe than sorry.
Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.