First Idea Post: ETH breakout above prior support level
Some bullish movement yesterday due to the BTC Segwit 2x suspension. We see the confluence of both a tested horizontal support level and a downward trendline. Breakout with good volume indicates a movement upward to the 330 area and then a possible retracement to test support turned resistance. Looking to close at the target of previous support resistance levels giving me an R/R ratio of 2 which is good enough to jump in.
Trade closed: stop reached:
The price came back to the resistance-turned-support level, hesitated and then blew right through it to my stop-loss. This mostly happened while I was asleep but that's exactly why we place stop-losses.
I risked 3% loss for a 7% gain with a very aggressive entry. If the price was higher I might have been a little more conservative and entered only after confirmation - that is to say, I would have watched the retracement and if it bounced off resistance at 320 with strong volume I may have jumped in. I also took a mental note that RSI was relatively high at entry which did increase the risk some.
Although my stop was reached and I lost 3% in this trade I'm very happy about it as the analysis was correct.
I risked 3% loss for a 7% gain with a very aggressive entry. If the price was higher I might have been a little more conservative and entered only after confirmation - that is to say, I would have watched the retracement and if it bounced off resistance at 320 with strong volume I may have jumped in. I also took a mental note that RSI was relatively high at entry which did increase the risk some.
Although my stop was reached and I lost 3% in this trade I'm very happy about it as the analysis was correct.