Bitcoin (BTC/XBT) Daily Long&Short Trade Setups 2021/01/20
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MARKET OVERVIEW
TRADES(S) RECAP: LATEST 3 TRADES
TRADE SETUPS
Below are the potential trade setups that I would be interested in trading. Regardless of the path that the price takes, I will be monitoring the market for a valid trade entry signal.
Long Trade Setup #1: Retest and Continuation (61.8Fib)
To open a long position, we are waiting for price to retrace down to test the 61.8Fib and then continue moving up.
Trade Entry Confirmation:
1. Price Action: Price needs to move back down to the 61.8Fib @ $35.4 and bounce back up.
2. Candlestick Pattern: A bullish candlestick pattern
3. Volume: Above average volume on entry candle
4. MACD: MACD histogram bottoming out
STRATEGY TYPES
My strategies fall into three categories:
1. Official strategies are those that have proven to be profitable over a large number of trades
2. Testing strategies are those that have proven to be profitable but the sample size is relatively small
3. Formulating strategies are strategies that are still in development
ENTRY CONFIRMATIONS
Ideally we get all confirmations for an entry, but sometimes we might take a trade when we have fewer confirmations. The more confirmations, the higher the win probability, though it also means you miss out on some profitable trades if you're only taking trades when we have all confirmations. It's up to your own risk appetite to decide when you feel comfortable entering a trade. You can also adjust position size based on level of conviction, entering a bigger position when there are more confirmations. Make sure you practice proper risk management and money management.
TRADE MANAGEMENT
I have put in preliminary Stop Loss and Take Profit on the chart, but these will depend on how the entry setup forms, so I will update when we have a valid entry signal.
Stop Loss: We typically put a SL around the high / low of the entry area, though we might adjust based on market conditions such as high ATR ( average true range ) or long wicks.
Take Profit: We typically aim for at least a 2:1 RRR (risk reward ratio), but you can decide to take profits earlier, adjust stop loss as we get into profit, take partial profit, leave a small portion for larger gains, etc. How you want to manage depends on your own risk appetite and what you are comfortable with.
RISK MANAGEMENT / POSITION SIZING
Trading is a marathon, not a sprint. The key is to stay in the game long enough for long term probabilities to play out. Even strategies with 90%+ win rate will have losing trades, so if you go all in one every trade, eventually you will blow up your account. My recommendation is to dynamically change your position size based on the size of the stop loss so that you are risking 1-2% of your total account size on any given trade. This means that if you’re wrong and the trade hitting the stop loss, you lose 1-2% of your account. As an illustration, if your account balance is 1BTC, then the most you should lose on any given trade should be 0.01-0.02BTC. Notice that I didn’t mention leverage here. Because what leverage (3X, 5X,10X, etc.) doesn’t matter here. What matters is the position size that matches up with a 1-2% account balance risk.
HOW TO USE MY ANALYSIS
Every day I post potential areas of interest and trade setups based on the latest market conditions and market structure. Once price reaches one of the identified areas of interest and gives a valid entry signal, I will post the entry, along with stop loss and take profit levels, in real time. No hindsight 20/20 here. Everything is in real time for full transparency and so that you can actually enter the same trades that I'm entering. Some trades only give us a few minutes to enter, which is why it's imperative that you follow me so that you don't miss out. Below are two ways that you can use the analysis that I publish daily:
1. You can integrate my analysis into your own analysis, for example by using it as a starting point, or as confirmation of your own TA, or to identify potential trades for yourself.
2. You follow the trade setups and trade entry signals that I give in real time.
DISCLAIMER: I'M NOT A FINANCIAL ADVISOR AND THIS IS NOT FINANCIAL ADVICE, AND I WILL NOT BE RESPONSIBLE FOR YOUR WINS OR LOSSES, DYOR.
Please support me by liking, sharing, commenting, and following! Thanks!
Please share your ideas and analysis below so we can all learn together!
Also check out my daily post on Ethereum!
MARKET OVERVIEW
- Price Action: Bitcoin traded in an upwards sloping channel up to $37.8K and then broke down from the channel and currently trending lower after breaking the 200MAs to the downside.
- Chart Patterns: No significantly visible chart patterns.
- Areas of Interest: The area(s) of interest for us are the primary 61.8 Fib @ $35.4. Once price reaches one of our areas of interest and gives us a valid entry signal, I will update the trade, so make sure you follow me to get the trade entry signals in real time.
TRADES(S) RECAP: LATEST 3 TRADES
- 2021/01/19: We had a winning trade! We had a signal from a strategy in the testing stage. We entered short @ $36760 SL @ $37150, price reached a low of $36K, giving us a risk reward ratio of 2:1, meaning if you risked 1BTC on this trade, you could've made 2BTC.
- 2021/01/15: We had a winning trade! We entered long @ $38470 SL @ $37770, price reached a high of $38780, giving us a risk reward ratio of 0.5:1, meaning if you risked 1BTC on this trade, you could've made 0.5BTC. This is our smallest win so far, but a win is a win, and this is the first step on our road back to profitable trades.
- 2021/ 01 /11: We had two losing trade! We entered long @ $35.4K SL @ $34.1K, and we hit Stop Loss. We entered long again @ $33.1K SL @ $31.6K, and we again hit stop loss. In hindsight, should have stepped aside from such a major selloff and wait for markets to stabilize before looking for trade entries.
TRADE SETUPS
Below are the potential trade setups that I would be interested in trading. Regardless of the path that the price takes, I will be monitoring the market for a valid trade entry signal.
Long Trade Setup #1: Retest and Continuation (61.8Fib)
To open a long position, we are waiting for price to retrace down to test the 61.8Fib and then continue moving up.
Trade Entry Confirmation:
1. Price Action: Price needs to move back down to the 61.8Fib @ $35.4 and bounce back up.
2. Candlestick Pattern: A bullish candlestick pattern
3. Volume: Above average volume on entry candle
4. MACD: MACD histogram bottoming out
STRATEGY TYPES
My strategies fall into three categories:
1. Official strategies are those that have proven to be profitable over a large number of trades
2. Testing strategies are those that have proven to be profitable but the sample size is relatively small
3. Formulating strategies are strategies that are still in development
ENTRY CONFIRMATIONS
Ideally we get all confirmations for an entry, but sometimes we might take a trade when we have fewer confirmations. The more confirmations, the higher the win probability, though it also means you miss out on some profitable trades if you're only taking trades when we have all confirmations. It's up to your own risk appetite to decide when you feel comfortable entering a trade. You can also adjust position size based on level of conviction, entering a bigger position when there are more confirmations. Make sure you practice proper risk management and money management.
TRADE MANAGEMENT
I have put in preliminary Stop Loss and Take Profit on the chart, but these will depend on how the entry setup forms, so I will update when we have a valid entry signal.
Stop Loss: We typically put a SL around the high / low of the entry area, though we might adjust based on market conditions such as high ATR ( average true range ) or long wicks.
Take Profit: We typically aim for at least a 2:1 RRR (risk reward ratio), but you can decide to take profits earlier, adjust stop loss as we get into profit, take partial profit, leave a small portion for larger gains, etc. How you want to manage depends on your own risk appetite and what you are comfortable with.
RISK MANAGEMENT / POSITION SIZING
Trading is a marathon, not a sprint. The key is to stay in the game long enough for long term probabilities to play out. Even strategies with 90%+ win rate will have losing trades, so if you go all in one every trade, eventually you will blow up your account. My recommendation is to dynamically change your position size based on the size of the stop loss so that you are risking 1-2% of your total account size on any given trade. This means that if you’re wrong and the trade hitting the stop loss, you lose 1-2% of your account. As an illustration, if your account balance is 1BTC, then the most you should lose on any given trade should be 0.01-0.02BTC. Notice that I didn’t mention leverage here. Because what leverage (3X, 5X,10X, etc.) doesn’t matter here. What matters is the position size that matches up with a 1-2% account balance risk.
HOW TO USE MY ANALYSIS
Every day I post potential areas of interest and trade setups based on the latest market conditions and market structure. Once price reaches one of the identified areas of interest and gives a valid entry signal, I will post the entry, along with stop loss and take profit levels, in real time. No hindsight 20/20 here. Everything is in real time for full transparency and so that you can actually enter the same trades that I'm entering. Some trades only give us a few minutes to enter, which is why it's imperative that you follow me so that you don't miss out. Below are two ways that you can use the analysis that I publish daily:
1. You can integrate my analysis into your own analysis, for example by using it as a starting point, or as confirmation of your own TA, or to identify potential trades for yourself.
2. You follow the trade setups and trade entry signals that I give in real time.
DISCLAIMER: I'M NOT A FINANCIAL ADVISOR AND THIS IS NOT FINANCIAL ADVICE, AND I WILL NOT BE RESPONSIBLE FOR YOUR WINS OR LOSSES, DYOR.
Please support me by liking, sharing, commenting, and following! Thanks!
Please share your ideas and analysis below so we can all learn together!
Comment:
Unless we print a super bullish candle in the next 10min for BTC, this 61.8 fib is likely invalidated and I’ll be shifting my focus to the support at 33.9k
Comment:
#BTC20210120 btc bounced off of the support at 33850. In fact, the green candle after the pinbar had a low of exactly 33850. Prettt crazy how this happens sometimes. Now nearing 200MAs, let’s see if this sets up a short entry or if we break through to the upside and finally shift bias from bear to bull.
Comment:
A close below 35k could be a good short for btc.
Trade active:
BTC Short
Entry 34,942
SL 35,554
TP1 34,636
TP2 34,330
TP3 34,024
TP4 33,718
Entry 34,942
SL 35,554
TP1 34,636
TP2 34,330
TP3 34,024
TP4 33,718
Comment:
TP1 Hit!
Trade closed: target reached:
All targets reached and then some!
