Bitcoin is a short for me, back down to 41100 area
Just a quick note, I have been in this short position for a bit now already. I'm not saying you can't short from here, what I'm saying is that for the risk adverse it is not the best value position to short from here as price can easily scare you out of position and the stop can have a high impact on your capital.
When it comes to liquidity and reversals, my rule of thumb is this:
1) The reversal must have come from a highly liquid area, meaning old lows/highs (like in this example), current highs/lows, trend lines that intersect with high/low and/or VWAP and VWAP's STD dev bands. That's where price should originate FROM, in one of those areas.
2) When you have those liquidity prone areas figured out, OBSERVE what price does. Does it reverse? Does it keep going? If it does reverse, how STRONG is the reversal? Does it HANDEDLY take out AT LEAST two previous swings AND close above/below them (as in our current case)?
-IF answer is yes to the last question. The low or high that retracement makes is your TAKE PROFIT TARGET.
-IF answer is no, that is not the entry you're looking for. There is still price discovery in motion. Do not take a trade.
3) Now comes the slightly harder part... WHERE TO ENTER? The following rules must apply for position entry.
-Must be FVG or Order Block of the origin of the move.
-THE POSITION ENTRY MUST BE INSIDE ONE OF THE FOLLOWING ICT KILLZONES: LONDON, NEW YORK AM/LUNCH/PM OR LONDON. If price makes a swing into an area that you think may be the order block or FVG outside of a *KILLZONE* timeframe. It is likely not the correct price to enter from.
-If price takes out the high of the origin of the move, that is your stop.
When it comes to liquidity and reversals, my rule of thumb is this:
1) The reversal must have come from a highly liquid area, meaning old lows/highs (like in this example), current highs/lows, trend lines that intersect with high/low and/or VWAP and VWAP's STD dev bands. That's where price should originate FROM, in one of those areas.
2) When you have those liquidity prone areas figured out, OBSERVE what price does. Does it reverse? Does it keep going? If it does reverse, how STRONG is the reversal? Does it HANDEDLY take out AT LEAST two previous swings AND close above/below them (as in our current case)?
-IF answer is yes to the last question. The low or high that retracement makes is your TAKE PROFIT TARGET.
-IF answer is no, that is not the entry you're looking for. There is still price discovery in motion. Do not take a trade.
3) Now comes the slightly harder part... WHERE TO ENTER? The following rules must apply for position entry.
-Must be FVG or Order Block of the origin of the move.
-THE POSITION ENTRY MUST BE INSIDE ONE OF THE FOLLOWING ICT KILLZONES: LONDON, NEW YORK AM/LUNCH/PM OR LONDON. If price makes a swing into an area that you think may be the order block or FVG outside of a *KILLZONE* timeframe. It is likely not the correct price to enter from.
-If price takes out the high of the origin of the move, that is your stop.
