BTC dropped to the range lows on the daily timeframe and bounced at the top of the ascending channel that formed between October and February. While a lot of people were panic selling, I was DCA'ing into long positions with max risk of 5% of account should I hit my stop loss at 58,000.
The 100 EMA on the daily timeframe is around 58,300 and if we go below that, it invalidates my setup and I will take the loss.
I will share more about my DCA strategy and how I manage risk soon. I have developed a system over the last year and it allows me to swing trade on high time frames and I can almost always manage myself out of a trade at breakeven without ever getting stopped out.
I start by calculating the maximum risk I am willing to take. Example: 5% of a 10,000 account = $500 max risk.
I pick 4 ladder entries (in white on the chart) towards the bottom 50% of the range and usually place my 4th one below the range in case support breaks. Each position is 1.5X larger than the previous one which causes the average entry to be pulled down significantly when each ladder fills.
Here is the hard part... the math. It is hard to solve for ladder position sizes at 4 different prices using a 1.5X multiplier so that when they all hit the stop loss it equals $500.
I am building an online tool to crunch these numbers and am testing it now. So far, it's working great for long positions. I will make the site public and share it if anyone is interested. Let me know in the comments if you would like access when it is ready.
The 100 EMA on the daily timeframe is around 58,300 and if we go below that, it invalidates my setup and I will take the loss.
I will share more about my DCA strategy and how I manage risk soon. I have developed a system over the last year and it allows me to swing trade on high time frames and I can almost always manage myself out of a trade at breakeven without ever getting stopped out.
I start by calculating the maximum risk I am willing to take. Example: 5% of a 10,000 account = $500 max risk.
I pick 4 ladder entries (in white on the chart) towards the bottom 50% of the range and usually place my 4th one below the range in case support breaks. Each position is 1.5X larger than the previous one which causes the average entry to be pulled down significantly when each ladder fills.
Here is the hard part... the math. It is hard to solve for ladder position sizes at 4 different prices using a 1.5X multiplier so that when they all hit the stop loss it equals $500.
I am building an online tool to crunch these numbers and am testing it now. So far, it's working great for long positions. I will make the site public and share it if anyone is interested. Let me know in the comments if you would like access when it is ready.
Trade active:
While it is hard to predict what the impact the halving could have on volatility over the next week, it appears the BTC has swept the range lows, stayed inside the bull flag, and held OBV support. Bullish divergence on RSI 1HR confirms RSI reset is complete and we can (hopefully) start moving back towards the top of the bull flag over the next 2 weeks.
I am still holding my 5X long position that I DCA'd into between April 12th and 13th and managed to place my stop loss out of harms way. I did drop half of my position side so that I was risking 2.5% of my BTC margin account instead of 5% when we popped up to $64,500 on Monday. I will sometimes do this when my confidence in the trend direction is low.
Still holding this trade
I am still holding my 5X long position that I DCA'd into between April 12th and 13th and managed to place my stop loss out of harms way. I did drop half of my position side so that I was risking 2.5% of my BTC margin account instead of 5% when we popped up to $64,500 on Monday. I will sometimes do this when my confidence in the trend direction is low.
Still holding this trade