I will do a LONG trade on Ripple (XRPZ18), low risk (tight stop loss), based on the following signals:
Inverted hammer.
Volume decreased to a halt. (incoming breakout)
EMA50 working as support.
Very tight stop loss (low risk, high reward).
We also have a falling wedge pattern, which is bullish and hidden bullish divergence.
Target and stop loss on chart.
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Let me add some more to this analysis... This is only for learning and entertainment of course, the price can go either way and that's why we have a stop loss on every single trade... Let's get started.
XRPZ18 4H Analysis:
- After XRP hit its peak on the 20th November, it started to retrace. - Retrace went as far down as to break below EMA200 (orange) but this was a fake breakout as the price moved back up quickly. Below EMA200 we have EMA300 which is the gray line. - Now, volume is decreasing with bullish signals building up. EMA200 is the next support and we still have EMA300 above our stop loss. - So looking at the uptrend, and the bullish signals mentioned before, we have the probability of the break going up. - For this reason we open for LONG... and in case our trade goes bad, we have a very tight stop loss.