Here's the setup:
- Drawn support / resistance levels on the chart (30m is green, 1h is yellow, 4h is orange, daily is red) The darker the colour, the more potent the level is.
- Black dotted channel is the bear channel, I've extended this to show how the price action movement should look like in the next couple of days, should we stay inside this channel.
- Using EMA10,50 combined with MACD for my lagging oscillators
We can see on the 30M chart that Litecoin surged upwards, gaining 13% in a matter of two hours, breaking the upper bound of the bear channel we've been stuck in, in the past couple of weeks. I can see that there has been a MACD cross as well as EMA cross. However I'm not convinced by the volume pump, it feels very artificial, which could be a pump and dump. Artificial or not, I plan to get in on this long trade!
Because I'm being extra cautious, I will wait for the price to break the bear channel again (because the first time it broke the channel, price whiplashed back down inside) and I will enter then and only then.
Right. Risk Management.
Let's try a TP based on how much I'm willing to lose. If I set my stop loss at the daily support (red line) I am risking 10%, so let's aim for 10% gain to balance it out. 10% gain is around 136.16, so I will take profit from there, and let the price run up to the 4H resistance at 157.
- Drawn support / resistance levels on the chart (30m is green, 1h is yellow, 4h is orange, daily is red) The darker the colour, the more potent the level is.
- Black dotted channel is the bear channel, I've extended this to show how the price action movement should look like in the next couple of days, should we stay inside this channel.
- Using EMA10,50 combined with MACD for my lagging oscillators
We can see on the 30M chart that Litecoin surged upwards, gaining 13% in a matter of two hours, breaking the upper bound of the bear channel we've been stuck in, in the past couple of weeks. I can see that there has been a MACD cross as well as EMA cross. However I'm not convinced by the volume pump, it feels very artificial, which could be a pump and dump. Artificial or not, I plan to get in on this long trade!
Because I'm being extra cautious, I will wait for the price to break the bear channel again (because the first time it broke the channel, price whiplashed back down inside) and I will enter then and only then.
Right. Risk Management.
Let's try a TP based on how much I'm willing to lose. If I set my stop loss at the daily support (red line) I am risking 10%, so let's aim for 10% gain to balance it out. 10% gain is around 136.16, so I will take profit from there, and let the price run up to the 4H resistance at 157.
Trade active:
Entered slightly late as I was disconnected for at least two hours, entered long at 124.6
Adjusted my Risk / Reward Ratio to align with my invalidation (red daily support) and a target take profit level at 139
Adjusted my Risk / Reward Ratio to align with my invalidation (red daily support) and a target take profit level at 139
Trade active:
Well into the trade with 4% gain now, but we are still a bit far from our target take profit of 139, the momentum seems to have slowed down, as we are ranging for the past two hours now.
I will set up a stop loss on my entry level at 124.6 to make sure if a downturn happens, I only lose the transaction fee.
I will set up a stop loss on my entry level at 124.6 to make sure if a downturn happens, I only lose the transaction fee.
Trade closed: stop reached:
Stopped out at break even, 124.6.
Shame that I didn’t sell when I could’ve had profit, but at the same time I didn’t really lose anything but the transaction fees.
Shame that I didn’t sell when I could’ve had profit, but at the same time I didn’t really lose anything but the transaction fees.