Today let's speak about the current situation on Twitter. First of all, it's important to say that we are not saying "Twitter will do this or that" Instead of that, we will create a future scenario that, IF it happens, we will know exactly how to trade it.
What are we observing right now?
The price is above an ascending trendline tested several times, and we can see a Massive Flag Pattern (115 days) supported on that trendline. The only scenario we are interested in is if we observe a clear breakout of the Flag Pattern. That is our first filter to start thinking in terms of bullish setups.
What's the plan after that?
We will wait for a small correction with the size of the circle you can see on the chart, and we will trade on the new local high after that. Stop loss below the correction. Targets can be below the previous ATH or the Fibo Extension at 90.00
What if this chart does not go as expected?
Very simple, we don't trade
How much money are you going to risk in this future setup IF happens?
We will risk 1% of our capital on the stop loss.
What is the time horizon of the trade, in case everything goes as expected?
60 to 120 days
How accurate these types of setups are?
The accuracy of this type of breakouts is about 45% - 55%, which means that, on average, you will lose half of the time, YES, half of the time. However, if your risk-reward ratio is good enough ( 1 : 2, for example), you don't care about that.
Thanks for reading!!!
What are we observing right now?
The price is above an ascending trendline tested several times, and we can see a Massive Flag Pattern (115 days) supported on that trendline. The only scenario we are interested in is if we observe a clear breakout of the Flag Pattern. That is our first filter to start thinking in terms of bullish setups.
What's the plan after that?
We will wait for a small correction with the size of the circle you can see on the chart, and we will trade on the new local high after that. Stop loss below the correction. Targets can be below the previous ATH or the Fibo Extension at 90.00
What if this chart does not go as expected?
Very simple, we don't trade
How much money are you going to risk in this future setup IF happens?
We will risk 1% of our capital on the stop loss.
What is the time horizon of the trade, in case everything goes as expected?
60 to 120 days
How accurate these types of setups are?
The accuracy of this type of breakouts is about 45% - 55%, which means that, on average, you will lose half of the time, YES, half of the time. However, if your risk-reward ratio is good enough ( 1 : 2, for example), you don't care about that.
Thanks for reading!!!