Background:
BTC has more or less followed a steep downward facing channel for the past 2 months. Yesterday we saw a deviation below the channel and a HTF trend line dating back to the 2017 top with a quick reclaim of both. Bullish divergence formed on the 4H chart and the 4H MACD has just confirmed positive.
Strategy:
If the daily close confirms a reclaim of the trend line, I will enter a long on the breakout of the swing high at 37574. Stop loss will be just below the previous day's low at 35716, 1st target will be the top of the channel. After moving SL to BE, 2nd and 3rd stretch targets will be the 21W EMA and the underside of the next HTF trend line respectively.
Early invalidation scenarios:
1) Blowing too far past swing high before confirming the daily close (reducing my R/R), might look for a confirmed retest of the lower trendline and enter there.
2) Bad news out of the Fed FOMC meeting on Wed. would be a 100% close position regardless of PA.
3) 4H RSI confirming below trend line or 50, whichever is lower.
BTC has more or less followed a steep downward facing channel for the past 2 months. Yesterday we saw a deviation below the channel and a HTF trend line dating back to the 2017 top with a quick reclaim of both. Bullish divergence formed on the 4H chart and the 4H MACD has just confirmed positive.
Strategy:
If the daily close confirms a reclaim of the trend line, I will enter a long on the breakout of the swing high at 37574. Stop loss will be just below the previous day's low at 35716, 1st target will be the top of the channel. After moving SL to BE, 2nd and 3rd stretch targets will be the 21W EMA and the underside of the next HTF trend line respectively.
Early invalidation scenarios:
1) Blowing too far past swing high before confirming the daily close (reducing my R/R), might look for a confirmed retest of the lower trendline and enter there.
2) Bad news out of the Fed FOMC meeting on Wed. would be a 100% close position regardless of PA.
3) 4H RSI confirming below trend line or 50, whichever is lower.
Comment:
Got stopped out, in retrospect I should've given SL room to tag the bottom of the channel. FOMC drop wasn't as bullish as I'd hoped so maybe it's for the better