Hello traders and investors. This is a quick ETH update similar in analysis to my last one on BTC.
Pulling up the 4-hour chart, we rely on the Relative Strength Index (RSI) indicator to always give us entries and exits. Factoring in the volatility in ETH trading, we will use 75 and 25 on the RSI as overbought as oversold respectively. For a long scenario, we wait for the RSI to dip below 25 for the FIRST TIME since it had been above 75. And after the FIRST CANDLE closes with the RSI pointing upwards, that close of the candle becomes our LONG entry (long entry = short exit). Likewise with a short entry, we wait for the RSI to go above 75 for the FIRST TIME since it had been below 25. And after the FIRST CANDLE closes with the RSI pointing downwards, that close of the candle becomes our SHORT entry (short entry = long exit). For both these cases although not necessarily, a more cautious trader would want to wait for a 3% retrace before jumping in.
We also use the 120 MA (Moving Average) as our reference indicator. Despite it being a great indicator in acting as support and resistance on the 4-hour chart, it can also expose fake outs and shield us from taking risky (bad) trades. Typically, you SHOULD NOT enter a long when the RSI-pointed entry is MORE than 10% away from the 120 MA. This applies to ENTRIES ONLY, exits remain as previously explained.
Seeing as the last time the RSI went below 25 and first pointed up at the close of $201.7 with the 120 MA at $203.5, we could be looking at another run to the upside. Taking in the 3% retrace, that puts us at $195.8. Therefore, $195 - 201 would be a great opportunity to enter this kind of trade. Cheers.
This is NOT financial advice. Please do your own research and understand trading derivatives has high risk.
Pulling up the 4-hour chart, we rely on the Relative Strength Index (RSI) indicator to always give us entries and exits. Factoring in the volatility in ETH trading, we will use 75 and 25 on the RSI as overbought as oversold respectively. For a long scenario, we wait for the RSI to dip below 25 for the FIRST TIME since it had been above 75. And after the FIRST CANDLE closes with the RSI pointing upwards, that close of the candle becomes our LONG entry (long entry = short exit). Likewise with a short entry, we wait for the RSI to go above 75 for the FIRST TIME since it had been below 25. And after the FIRST CANDLE closes with the RSI pointing downwards, that close of the candle becomes our SHORT entry (short entry = long exit). For both these cases although not necessarily, a more cautious trader would want to wait for a 3% retrace before jumping in.
We also use the 120 MA (Moving Average) as our reference indicator. Despite it being a great indicator in acting as support and resistance on the 4-hour chart, it can also expose fake outs and shield us from taking risky (bad) trades. Typically, you SHOULD NOT enter a long when the RSI-pointed entry is MORE than 10% away from the 120 MA. This applies to ENTRIES ONLY, exits remain as previously explained.
Seeing as the last time the RSI went below 25 and first pointed up at the close of $201.7 with the 120 MA at $203.5, we could be looking at another run to the upside. Taking in the 3% retrace, that puts us at $195.8. Therefore, $195 - 201 would be a great opportunity to enter this kind of trade. Cheers.
This is NOT financial advice. Please do your own research and understand trading derivatives has high risk.
Comment:
Trade closed at $221. Please watch out for my next update. Thanks.