ETHREUM (ETHUSDT) DAILY LONG&SHORT TRADE SETUPS 2021/01/01
MARKET OVERVIEW
TRADE SETUPS
Below are two potential trade setups. 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 break resistance, move back down to test previous resistance as support and then bounce back up.
Trade Entry Confirmation:
1. Price Action: Price breaks above the high of $759 with force, creating space between the price and the $759 level, falls back down to $759 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)
Short Trade Setup #1: False Breakout
To open a short position, we are waiting for price to break above the horizontal resistance @ $759 and then fall back down.
Trade Entry Confirmation:
1. Price Action: Price breaks above the high of $759 and then rapidly falls below $759, forming a bull trap
2. Candlestick Pattern: A breakout candlestick (candle close above $759) followed by a breakdown candlestick (candle close below $759)
2.1 Ideally breakout and breakdown candlesticks are consecutive candles, but can also have a few candles in between the two candlesticks
2.2 Ideally the breakdown candle has a large candle body with very small wicks
3. Volume: Above average volume ( volume above the average volume line) on both breakout candle and breakdown candle, ideally the breakdown candle's volume is a local high
4. MACD: MACD histogram topping out, as indicated by the histogram becoming less positive (color changing from dark green to light green)
NOTE: For false breakout/false breakdown trade setups, sometimes trading the other pair (eg. trading BTC when the setup is on ETH and vice versa) can be even more profitable if the other pair is looking weaker (for false breakout setup) or stronger (for false breakdown). Some indicators to consider are where the price is relative to the 200MAs, size of recent candles, volume, and overall price action, market structure, and chart patterns.
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.
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.
Feel free to ask any questions, and please let me know how I can improve these daily posts / what you would like me to include in these daily posts, thanks.
- Price Action: As BTC made a new ATH, ETH failed to break above the previous high of $759, showing signs of weakness.
- Chart Patterns: No significant chart patterns.
- Areas of Interest: The area(s) of interest for us is the highs of $759. 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.
- No ETH trades yesterday, though we did have a winning BTC short 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. Trading ETH on a BTC false breakout setup proved more profitable than trading BTC itself.
- Two days ago we had winning trade! We entered a long @$733, with a Stop Loss @ $716, and price reached a high of $759, giving a risk reward ratio of 1.5:1, meaning if you risked 1BTC on this trade, you could've made 1.5BTC.
- Three days ago we had a winning trade! We entered a long @ $703, with Stop Loss @ $690, and price reached a high of $747.50, giving a risk reward ratio of over 3:1, meaning if you risked 1BTC on this trade, you could've made more than 3BTC.
TRADE SETUPS
Below are two potential trade setups. 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 break resistance, move back down to test previous resistance as support and then bounce back up.
Trade Entry Confirmation:
1. Price Action: Price breaks above the high of $759 with force, creating space between the price and the $759 level, falls back down to $759 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)
Short Trade Setup #1: False Breakout
To open a short position, we are waiting for price to break above the horizontal resistance @ $759 and then fall back down.
Trade Entry Confirmation:
1. Price Action: Price breaks above the high of $759 and then rapidly falls below $759, forming a bull trap
2. Candlestick Pattern: A breakout candlestick (candle close above $759) followed by a breakdown candlestick (candle close below $759)
2.1 Ideally breakout and breakdown candlesticks are consecutive candles, but can also have a few candles in between the two candlesticks
2.2 Ideally the breakdown candle has a large candle body with very small wicks
3. Volume: Above average volume ( volume above the average volume line) on both breakout candle and breakdown candle, ideally the breakdown candle's volume is a local high
4. MACD: MACD histogram topping out, as indicated by the histogram becoming less positive (color changing from dark green to light green)
NOTE: For false breakout/false breakdown trade setups, sometimes trading the other pair (eg. trading BTC when the setup is on ETH and vice versa) can be even more profitable if the other pair is looking weaker (for false breakout setup) or stronger (for false breakdown). Some indicators to consider are where the price is relative to the 200MAs, size of recent candles, volume, and overall price action, market structure, and chart patterns.
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.
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.
Feel free to ask any questions, and please let me know how I can improve these daily posts / what you would like me to include in these daily posts, thanks.
