ETHUSD update: 315 support reached as pin bar appears on this time frame to show a possible double bottom formation. I am long at 321.24 (50% of position size) with a stop at 314 and target of 345 Risk/reward is about 3:1).
The retest of the 315 level has played out as I wrote about in my previous report. And the price action at the moment is showing a bullish reversal formation (pin bar) just above one of the levels I was interested in for a swing trade long. My plan is to buy more if price breaks above 324 to have a full position with the same stop and target (I am going to put most of it for sale around that price and hold onto some to see if it can make a new high).
This trade is most attractive because I can define my risk of only 7 points and a minimum target of the mid 340s because it is reasonable to expect this market to at least attempt to retest the highs. I do not care if it can break higher or not, 3:1 reward/risk is more important.
A break below the 315 level will take this market into the low 300s and possible mid 290s supports where I will look for reversal patterns again if I get stopped out of this trade. I have only half my starting size in order to better manage the risk, so if I lose, I am losing smaller, and if this market takes out the next level 324, I will put on my full position, while taking basically the same amount of risk but with slightly more confirmation.
These entries are not perfect, and one scenario that may unfold is the failed low on a smaller time frame. This is where a double bottom variation can occur just below 315. I will be stopped out if this happens, but if I see the formation that am looking for I will get back in. These type of reversals are the ones that I prefer the most, but appear randomly so I am prepared for that situation as well.
In summary, the 315 support level retest has appeared and I am now long from the 321.24 level with half of my usual position size. The reward/risk clearly makes sense and I am prepared to add upon a break of 324. If the trade stops out, it is small, especially compared to the anticipated target area. I received a few messages yesterday talking about the failure of the fork. These forks seem to be buy the rumor, sell the news. I am not factoring any of that into this trade, I am only focusing on what the chart is telling me now.
Questions and comments welcome.
Comment
⋅
Stopped out for small loss. Waiting for the failed low scenario now for possible reentry.
Buy in $290-300 range as it retests a long term ascending support line on the daily chart
BrunoDanteSampaio
⋅
@rogeac71, will you buy with no confirmation o uptrend?
a_rod71
⋅
@BrunoDanteSampaio, good question. It depends on how candles print and why I think the retracement took place. But, if I have a high degree of confidence, I will enter on a strong signal that the price will respect the support. On the daily chart I am looking at support from either the 117-d EMA (don’t ask me why, ETH just seems to like this) or an ascending support line drawn from lows on 7/16 and 9/15. I ignore the wicks and just use candle bodies.
Hi MarcPMarkets, my name is Ali and I am from Netherlands.... just want to give a shout out and say that your work is fantastic and many people here in my country always look out for it... plz keep posting...
ookgezellig
⋅
@vupufehv, yes, indeed , being also from the Netherland. Thanks for all your analyses, I admire your patience