BTC/USD
Swing Trade Setup - Long
No Leverage
Scenario 1:
Price action continues downward from where it is, or makes a higher high within the light blue price range placed at Point C on the light blue harmonic, and reacts off the projected Point D or anywhere within the light blue price range placed beside it:
Entry: ~ 51026.56
Stop Loss: 49660.23
Potential Loss: -2.68%
Target 1: 53481.78
Potential Profit: +4.81%
Risk/Reward Ratio - 1.8:1
Target 2: 56056.00
Potential Profit: 9.86%
Risk/Reward Ratio - 3.68:1
Reasons to Take the Trade:
- A Bullish Shark
- Multiple targets for profit.
- Very tight stop loss to minimize losses
- Potential for Class A Bullish Divergence on the MACD to have developed.
Reasons Not to Take the Trade:
- There's a possibility that the price action will continue upwards and make a higher high, and thus a new Point C, within the price range of 57227.82 - 56452.10 before reversing back downward, which would make the identity of the harmonic in question ambiguous, and instead, you might need to raise your entry to 51740.92 to operate under the assumption that the harmonic is in fact Scenario 2.
** In case of scenario 2, raise your stop loss to break even (51026.56) once the price action begins moving in our favored direction.
Scenario 2:
If the price action continues upwards and reverses within the purple price range projected by the dark blue and purple harmonic's Point C:
Entry: 51740.92
Stop Loss: 50259.69
Potential Loss: -2.86%
Target: 55756.90
Potential Profit: 7.76%
Risk/Reward Ratio - 2.71:1
Reasons to Take the Trade:
- A Bullish Cypher
- A very price pattern completion zone for entry (Point D)
Reasons Not to Take the Trade:
- R/R Ratio is not exactly 3:1, and is thus risky.
- The stop loss of a cypher pattern is above the stop loss of the plotted bullish shark, meaning that if you enter at the PCZ and place your stop based on this specific trade setup, you could be stopped out of the cypher for a loss of 2.86% before the pattern then reversed upwards to complete as a Bullish Shark.
Scenario 3:
If the price action reacts at the PCZ of the light blue harmonic otherwise known as the Bullish Shark, it may trigger the shark's first target, before reversing back downwards.
This is because the Bullish Shark is actually a harmonic created by cutting off one leg of another harmonics, the Bearish 5-0. The Bearish 5-0 is a reversal pattern that could send the price action further downward. Because of this, you should raise your stop to your entry point once the shark harmonic begins moving up from the PCZ. Please Note: If the price action continues upwards and makes a higher Point C while remaining a shark, the projected reversal area for a Bearish-50 charted here will be incorrect. Please keep in mind that the PCZ of a Bearish 5-0 harmonic pattern is 50% of the way through the length of the CD leg, so plot it yourself accordingly if you intend to open a short based on the Bearish 5-0 pattern.
I will provide no targets or stop losses for the Bearish 5-0, as I have never found a solid trade setup strategy for it.
Swing Trade Setup - Long
No Leverage
Scenario 1:
Price action continues downward from where it is, or makes a higher high within the light blue price range placed at Point C on the light blue harmonic, and reacts off the projected Point D or anywhere within the light blue price range placed beside it:
Entry: ~ 51026.56
Stop Loss: 49660.23
Potential Loss: -2.68%
Target 1: 53481.78
Potential Profit: +4.81%
Risk/Reward Ratio - 1.8:1
Target 2: 56056.00
Potential Profit: 9.86%
Risk/Reward Ratio - 3.68:1
Reasons to Take the Trade:
- A Bullish Shark
- Multiple targets for profit.
- Very tight stop loss to minimize losses
- Potential for Class A Bullish Divergence on the MACD to have developed.
Reasons Not to Take the Trade:
- There's a possibility that the price action will continue upwards and make a higher high, and thus a new Point C, within the price range of 57227.82 - 56452.10 before reversing back downward, which would make the identity of the harmonic in question ambiguous, and instead, you might need to raise your entry to 51740.92 to operate under the assumption that the harmonic is in fact Scenario 2.
** In case of scenario 2, raise your stop loss to break even (51026.56) once the price action begins moving in our favored direction.
Scenario 2:
If the price action continues upwards and reverses within the purple price range projected by the dark blue and purple harmonic's Point C:
Entry: 51740.92
Stop Loss: 50259.69
Potential Loss: -2.86%
Target: 55756.90
Potential Profit: 7.76%
Risk/Reward Ratio - 2.71:1
Reasons to Take the Trade:
- A Bullish Cypher
- A very price pattern completion zone for entry (Point D)
Reasons Not to Take the Trade:
- R/R Ratio is not exactly 3:1, and is thus risky.
- The stop loss of a cypher pattern is above the stop loss of the plotted bullish shark, meaning that if you enter at the PCZ and place your stop based on this specific trade setup, you could be stopped out of the cypher for a loss of 2.86% before the pattern then reversed upwards to complete as a Bullish Shark.
Scenario 3:
If the price action reacts at the PCZ of the light blue harmonic otherwise known as the Bullish Shark, it may trigger the shark's first target, before reversing back downwards.
This is because the Bullish Shark is actually a harmonic created by cutting off one leg of another harmonics, the Bearish 5-0. The Bearish 5-0 is a reversal pattern that could send the price action further downward. Because of this, you should raise your stop to your entry point once the shark harmonic begins moving up from the PCZ. Please Note: If the price action continues upwards and makes a higher Point C while remaining a shark, the projected reversal area for a Bearish-50 charted here will be incorrect. Please keep in mind that the PCZ of a Bearish 5-0 harmonic pattern is 50% of the way through the length of the CD leg, so plot it yourself accordingly if you intend to open a short based on the Bearish 5-0 pattern.
I will provide no targets or stop losses for the Bearish 5-0, as I have never found a solid trade setup strategy for it.
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