Bitcoin is in a bullish trend , as tenkan (blue) is over kijun (red) line for more than half of the candles in the last 15 days.
Since the bullish trend , we prepare for a moment to enter a long position. We capture the following signals:
- The price crossed the cloud upwards, and then some more (we are ~2.24% above cloud right now).
- Tenkan is over kijun line.
- RSI is converging with the price.
That gives us confirmation that price is about to get higher.
As we enter a long position, we must set our stop loss to avoid losing too much if our strategy proves to be wrong. We set our stop on 22177 (5% maximum loss) for now. As the price (if) keep rising, we will adjust out stop loss to keep up with the cloud in order to ensure profit.
We will close our position if any of the following occur:
- We reach our maximum loss (5%).
- A fake breakout is detected. This happend if the price goest below the line in the next 20 or some candles.
- Price fails to rise for some time. This happens when the price hasn't moved more than 1% up after like 100 candles (the red area in the plot shows 100 candles area).
- Price breaks down the cloud. If price gets below the cloud with a safety margin like 2.5% below the cloud.
- We achieve 25% profit in the trade.
If any of those things happend, its time to get our profits (or minimize our losses) because there is a considerable chance the price will start or keep getting down from this point.
But even if this happens, we are still set for a bullish trend , meaning we keep watching for a new long opportunity.
As you can see, and this is very important in every trade of mine, I don't try to guess where the market will go, but instead I pick up the signals and react after the market. Sure I will miss the tops and the bottoms, but overall I get more stable profit because I do not gamble.
People might be afraid of opening a long position when BTC already have risen so much. But the way I see it, we cannot (and should not) guess if it will go even higher or start to fall. So I rather stick to my method, and respond to the market, instead of trying to catch the top.
Since the bullish trend , we prepare for a moment to enter a long position. We capture the following signals:
- The price crossed the cloud upwards, and then some more (we are ~2.24% above cloud right now).
- Tenkan is over kijun line.
- RSI is converging with the price.
That gives us confirmation that price is about to get higher.
As we enter a long position, we must set our stop loss to avoid losing too much if our strategy proves to be wrong. We set our stop on 22177 (5% maximum loss) for now. As the price (if) keep rising, we will adjust out stop loss to keep up with the cloud in order to ensure profit.
We will close our position if any of the following occur:
- We reach our maximum loss (5%).
- A fake breakout is detected. This happend if the price goest below the line in the next 20 or some candles.
- Price fails to rise for some time. This happens when the price hasn't moved more than 1% up after like 100 candles (the red area in the plot shows 100 candles area).
- Price breaks down the cloud. If price gets below the cloud with a safety margin like 2.5% below the cloud.
- We achieve 25% profit in the trade.
If any of those things happend, its time to get our profits (or minimize our losses) because there is a considerable chance the price will start or keep getting down from this point.
But even if this happens, we are still set for a bullish trend , meaning we keep watching for a new long opportunity.
As you can see, and this is very important in every trade of mine, I don't try to guess where the market will go, but instead I pick up the signals and react after the market. Sure I will miss the tops and the bottoms, but overall I get more stable profit because I do not gamble.
People might be afraid of opening a long position when BTC already have risen so much. But the way I see it, we cannot (and should not) guess if it will go even higher or start to fall. So I rather stick to my method, and respond to the market, instead of trying to catch the top.
Trade closed: stop reached:
We close our position with a managed loss.
Since the lower border of the cloud raised, we update our stop loss to trigger on 22669 (around 2.5% below the cloud).
That lower our potential loss from 5% to 2.87%.
We keep waiting for the 100 candles mark, when we decide if the position should be kept open or closed.