NEO has fully completed head and shoulders pattern, meeting its target and bounced off support. (I posted about H&S pattern before in Cryptocurrency chat. No one took it serious, but I traded it and made some nice profits). During the recent bounce it has broken off fallen wedge and is currently in uptrend correction. Holders would love to believe that NEO just hit the bottom to start a new bullrun, however judging by the nature of this bounce I am not convinced. The bottom looks unnatural, it is not V-shape but more like a square-root, which suggests it still has a downward momentum and will be inclined to go lower after completing our corrective wave. Regardless of its future course of action, it is in a short term uptrend right now and it's a nice target for a long setup.
After establishing trend direction we can open a long trade whenever opportunity presents us a dip. Dips are where all the profit is coming from. If your target is correct, you get the target + dip as a profit. Whereas even if your TA is right but you buy at current price, in case the trade goes south you will have that potential dip added to your losses instead. Also rushing a trade promotes creating stop losses that aren't big enough to secure your trade, even if you guessed the direction correctly. Therefore always wait for a good entry and if your are late it's better not to enter the trade. Then again, if dip is too good to be true, it could be a trap. Good dips are bought very quickly. I buy dips on candle close because you never know how low can a candle go. On the other hand, if a candle suddenly smashes the floor and the dip you were waiting for turns into a free fall, you can choose not to trade it. Another way to buy dips is to establish a support trend-line on a short time frame, then place a limit order and adjust it on every candle close so that it sits right on the line. Remember, every trade you are trying to get a good deal, so don't just place an order that will be obviously triggered in a few minutes - that will hardly make you any profit.
Now this is how I will execute this trade. I will measure a trading range from the highest candle close to the dip. Then I will do some magic math with it and set up my profit and loss targets. If another candle closes lower than my dip, I will have an option to recalculate the range and adjust my profit target, if necessary increasing it.
After establishing trend direction we can open a long trade whenever opportunity presents us a dip. Dips are where all the profit is coming from. If your target is correct, you get the target + dip as a profit. Whereas even if your TA is right but you buy at current price, in case the trade goes south you will have that potential dip added to your losses instead. Also rushing a trade promotes creating stop losses that aren't big enough to secure your trade, even if you guessed the direction correctly. Therefore always wait for a good entry and if your are late it's better not to enter the trade. Then again, if dip is too good to be true, it could be a trap. Good dips are bought very quickly. I buy dips on candle close because you never know how low can a candle go. On the other hand, if a candle suddenly smashes the floor and the dip you were waiting for turns into a free fall, you can choose not to trade it. Another way to buy dips is to establish a support trend-line on a short time frame, then place a limit order and adjust it on every candle close so that it sits right on the line. Remember, every trade you are trying to get a good deal, so don't just place an order that will be obviously triggered in a few minutes - that will hardly make you any profit.
Now this is how I will execute this trade. I will measure a trading range from the highest candle close to the dip. Then I will do some magic math with it and set up my profit and loss targets. If another candle closes lower than my dip, I will have an option to recalculate the range and adjust my profit target, if necessary increasing it.