(ETH/USD) Potential Intraday Short - CHANNEL & GANN basics

Happy Monday Fellow Traders!

***excuse the balloon overlaps, TV loves to rescale my charts
**The strategy results should be ignored, I built the MASIC-N indicator ages ago and use it as a baseline, not to trade on!!!

Today I had a friend approach me about her selling her ETH at $515 and feeling frustrated that she was missing the rally. This left me feeling inspired, so in today's chart dive we'll be covering four things

• The basics of my channel trade method
  
• The basics of trading Gann fan angles
  
• The basics of Fib levels
  
• A potential intraday short utilizing fib ratios & Gann angles
  

1. CHANNELS
***Note that theres many ways to trade channels, this is my method; everyone changes things to work for them, this is good! Adapt what you learn and make it work for you!

• Major channel range is Major peak to Major low
  
• Minor channel range is Minor peak to Minor Low
  
• Break out range is simply:
  Major channel-Minor channel for Long Entry
  Minor channel-Major channel for Short Entry
  
• The breakout level is taken from the breakout range added or subtracted from the major channel for long/short respectively
  
• Entry is initiated at the close of the second candle outside of this breakout level
  
• Stop Losses are placed at major channel peak or low for long/short
  
• Move stop to break even after price move equal to 50% of breakout range
  

2. GANN FANS (these rules are absolutely imperative!!!)
***These are constantly misused on TradingView, lets set the record straight!
**I've only listed the 1/2, 1/1, and 2/1 angles to simplify things as these are all thats needed for a baseline "loose" Gann fantrade

• price/bar scale MUST BE 1/1!!!!!
  (seriously, if its not 1/1 then you're just drawing lines, not doing a gann analysis)
  
• Pick a Major high or Major Low
  
• Use the trend angle tool to draw 45 deg. angle in direction of trend.
  
• Overlay gan fan with 1/1 line locked to 45 deg. angle
  
• Watch for 1/1 crossover against trend direction
  
• Buy/Sell after close of second candle breaking out from 2/1 line
  

3. FIBONACCI Retraces.

I see people argue about the efficacy of fib levels all the time, stating the ever present "draw enough lines and something will correlate" argument.

So I'll make this one easy:

• These are simply guides NOT guarantees!
  lol
  

4. THE TRADE!!!!

WHY:

• Unsuccesful breakout of 1.618 fib line
  
• Possibly about to close the first bar below Gann fan
  
• RSI below 50 & falling
  
• MACD Bearish Divergence
  
• BTC (used as crypto index) testing 48 EMA
  
• Stochastic RSI below 50%
  

SETUP:

• Enter Short after second bar closes below Gann 2/1
  
• Target 1 @ 1.414 fib level ($623.60)
  
• Move S/L to $625 at breakout below
  
• Will update depending on trend continuation
  

***I really will do my best to update this as i trade ETH daily and will be paying attention to the price moves.

Happy trading folks!
--------------------------------------------------------------------------
DISCLOSURE:
This analysis is meant for educational purposes only. You trade at your own risk!

Austin Doyle
CTO