Test of 4200 - Long BTCUSDT

XBTUSD.P

On the day chart our ichimoku cloud was tested on the 28-29th of Sept and we are now ranging and testing again. This is consistent with Fibonacci Retracement.

If we penetrate through 4200 we should expect support at 4000 (3980 is Ichimoku and 3988 is Fib Ret 0.382). Last time we had such a setup it was the mega rally I expected after sidetracking in the 25-2900 range and as the buy signal came through on Ichimoku and we went north of the cloud, things took off.

Time a long entry on 1-4hr charts as we break up through clouds and RSI/MACD confirms while we get buy signal on day chart as well. We will then rally to test 5000 and possibly beyond.

I will put my buy at 4100, stop loss at 3850. If that deal goes south I will wait until Ichimoku shows we are north of cloud at 4000 and double down stop loss at 3700. Holding period probably 10-14 days if the rally I expect happens. Target is the retracement after testing 5000 onto the Ichimoku cloud where ever that may be at that time, probably north of 5000.

Comment:

On the 4hr we see why Im curious about the 4100 which is the edge of the cloud being tested now-ish.

Comment:

Thats a very weak sell signal and could easily be reversed along the up trend.

Comment:

Nice bouncing off the cloud on the 4hr chart

but still compared to Fib Ret we could have some pullback downside. That said all other time scales show we are on top so the 4150 might have been the bounce level.

Also todays candles is bullish and engulfing the last bearish even though we are still inside the cloud. Could go sideways 1-2 days and then take off. If there's more pullback it will end at 4150, then max 4000.

Comment:

When I saw the pullback last night I decided to liquidate and wait out as the market is going sideways today to decide if it will test 5000 or not. We already reached up there and were rejected twice plus we are a bit over bought lately, so that is why I decided to take home my profits from 4300 when I saw we took off with bull flags all over.

Comment:

If we zoom in on the 30min chart we see reversal and a weak rebounce trying to pull back up. Thats whats been going on all day and the reversal so far was rejected. That is another reason to be careful. We can see this also on MACD and RSI trying to pull the market back to an equilibrium before making up its mind if its bullish or bearish.

Having been rejected twice to reach 5000 (yesterday and the day before but with higher highs) and having had a red candle yesterday, I'm careful and liquidating until 15m and 30m and 1hr charts show clear signs that we will not pull back.

If we pull back it will be to something like 4400 with a pitstop at 4600 to be considered.

Comment:

I liquidate with trailing stop losses always after I see that the market might be reversing. That is what we saw when the 15min chart produced the below. the 15m chart is pretty accurate (as that's the attention span of many a trader haha).

Trailing stop losses makes it possible to hedge against being wrong - that the market continues up; and then closes out the position when its no longer the case.

I'm now waiting for a new long signal be getting through the Kumo and cross over which will happen at about 4810-4820 and we see if I go long again... which depends on thoughts if we go back to test 5000.

Comment:

5min can also be used and we see how the Kumo is rejecting the bulls attempt at getting north of it.

Trade closed: target reached:

The test of 4200 held, I got in at about 4300 and did a trailing stop loss when I saw signs of reversal. I am now waiting a couple of hours to check if 1hr chart (and 15m, 30m) shows bulls or bears as the 1hr is showing a weak bear but the Kumo may bounce it off.

If we hit 4820 it should be ok to long and then we expect test of 5000 again. Stop loss in that case at 4755 as thats a fractal support.