DOGE – POTENTIAL BUY SIGNAL
Elon Musk posted about DOGE last night and it sent DOGE up drastically today. However, I see a strong pattern forming that has the potential to give a strong buy area. The trick with this is that while the buy area is highly likely to bounce up, will it bounce up and then continue down or bounce and continue up? This is where risk management after the fact comes into play.
Most of the analysis on this chart will look crazy, but its some of the more basic tools including Fibonacci Levels, Fibonacci Retracements, Trend Lines, XABCD Patterns, and MACD. Look these up if you are not familiar or want to understand what the indicators are better.
Where price reversed at A (~.056) was an exit for a smaller pattern like this. I have been doing smaller consistent trades using these same patterns.
INVALIDATE: If price goes above C before reaching D then this pattern will be considered invalid.
I love the FIB ratios on this XABCD pattern. The AB leg is 50% of XA which is spot on and adds validity. The BC leg is falls right on the 78.6 Fib which adds more support to this trade. Finally, the 100% Fib Extension of the AB leg lands on exactly the 61.8% of the XA leg. In truth this is a very ideal setup to know there will be a lot of support at that level. Additionally, the “Recent Leg” Fib ratios also line is extremely well giving strong confluence for and entry at 0.3670. If price follows the pattern and the amount of time from the AB leg is equal to the CD then over the next 8 hours we would see a decent fall, but what I find at times is when market slows down the pattern will still complete and be respected even if more time is needed.
I will enter at 0.368
X would be my ideal stop area, but I will use the recent support level marked with the Gold Line at 0.0286. Once my D entry is confirmed and a solid Lower Low is established, I will move my stop up to my entry level and manage the trade from there.
Once concern I have is that if price enters in 8 hours it would be 4am CST. With lower volume at these times price might bounce there but only 23.6% or 38.2% and then continue down. That’s where managing the trade comes in. I will have to set an alert for if price enters the area and a new low is established to wake me up.
I am hopeful that this trade works out like I have been successful with recently. It is almost magical at times to call exact price areas and see price respect it.
(I am not a financial advisor. This should not be construed as financial advice. I simply like to trade and share my ideas. Always do your own due diligence.)
Elon Musk posted about DOGE last night and it sent DOGE up drastically today. However, I see a strong pattern forming that has the potential to give a strong buy area. The trick with this is that while the buy area is highly likely to bounce up, will it bounce up and then continue down or bounce and continue up? This is where risk management after the fact comes into play.
Most of the analysis on this chart will look crazy, but its some of the more basic tools including Fibonacci Levels, Fibonacci Retracements, Trend Lines, XABCD Patterns, and MACD. Look these up if you are not familiar or want to understand what the indicators are better.
Where price reversed at A (~.056) was an exit for a smaller pattern like this. I have been doing smaller consistent trades using these same patterns.
INVALIDATE: If price goes above C before reaching D then this pattern will be considered invalid.
I love the FIB ratios on this XABCD pattern. The AB leg is 50% of XA which is spot on and adds validity. The BC leg is falls right on the 78.6 Fib which adds more support to this trade. Finally, the 100% Fib Extension of the AB leg lands on exactly the 61.8% of the XA leg. In truth this is a very ideal setup to know there will be a lot of support at that level. Additionally, the “Recent Leg” Fib ratios also line is extremely well giving strong confluence for and entry at 0.3670. If price follows the pattern and the amount of time from the AB leg is equal to the CD then over the next 8 hours we would see a decent fall, but what I find at times is when market slows down the pattern will still complete and be respected even if more time is needed.
I will enter at 0.368
X would be my ideal stop area, but I will use the recent support level marked with the Gold Line at 0.0286. Once my D entry is confirmed and a solid Lower Low is established, I will move my stop up to my entry level and manage the trade from there.
Once concern I have is that if price enters in 8 hours it would be 4am CST. With lower volume at these times price might bounce there but only 23.6% or 38.2% and then continue down. That’s where managing the trade comes in. I will have to set an alert for if price enters the area and a new low is established to wake me up.
I am hopeful that this trade works out like I have been successful with recently. It is almost magical at times to call exact price areas and see price respect it.
(I am not a financial advisor. This should not be construed as financial advice. I simply like to trade and share my ideas. Always do your own due diligence.)
Comment:
This entry is still technically valid, however the highest probability for success of this butterfly pattern is when the CD leg is equal to the time it took to complete the AB leg. We are well past that now which, for me personally, starts to reduce the overall strength. I will watch for a few hours to see if active trading hours start to push closer to the entry, but I will reduce my overall risk and look for other Harmonic Patterns, and confluence of other indicators.