BITCOIN (BTC/XBT) DAILY BUY&SELL TRADE SETUPS 2020/12/28
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Market Overview
Bitcoin has pumped massively this month, especially in the past few days. In previous years, Bitcoin has also tended to pump in December in what some call the "Santa Rally". Historically speaking, this rally in December has been followed by a correction in January, so it's important to exercise some caution. In fact, it would be very healthy to have a correction in order for us to set up for another bullish move up. If we continue to go parabolic without a correction / consolidation, we increase the risk of a blow-off top. Personally I'd prefer we have a more sustainable bull market that takes us into 100K+ rather than a short term parabolic move that tops out at $40-50K.
The two main levels immediately significant on the charts that we want to focus on are the new All-Time-High of 28.4K and the 200MAs @ the 26.3K zone. We will be looking for trading opportunities in these two areas, and I've laid out three potential trade setups in detail below
Trade Recap
Yesterday we has a retest and continuation trade where BTC moved down to test the 200MAs and successfully bounced up, giving us a 2:1 RRR winning trade.
Long Trade Setup #1: Retest and Continuation
To open a long position, we are waiting for price to retrace back down to test the 200MAs and then continue moving up.
Trade Entry Confirmation:
1. Price Action: Price needs to move back down to the 200MAs and bounce back up (200MAs currently projected to be 26.3K zone).
2. Candlestick Pattern: A bullish candlestick pattern such as a bullish engulfing candle, a pinbar, or a multiple candlestick breakdown (a large red candle followed by multiple green candles that eventually close above the open/high of the large red candle)
3. Volume: Above average volume on the bullish engulfing candle, pinbar, or on any of the multiple green candles that eventually break the red candle (ideally on the candle that breaks)
4. MACD: MACD histogram bottoming out, as indicated by the histogram becoming less negative (changing from red to pink)
Long Trade Setup #2: Breakout and Continuation
To open a long position, we are waiting for price to break resistance, move back down to test previous resistance as support and then bounce back up.
Trade Entry Confirmation:
1. Price Action: Price breaks above the high of 28.4K with force, creating space between the price and 28.4K, falls back down to 28.4K and bounce back up.
2. Candlestick Pattern: A bullish candlestick pattern such as a bullish engulfing candle, a pinbar, or a multiple candlestick breakdown (a large red candle followed by multiple green candles that eventually close above the open/high of the large red candle)
2.1 Ideally Engulfing / Break candle has a large candle body with small wicks
2.2 Ideally Engulfing /Break candle closes near the highs of the candle
3. Volume: Above average volume on the bullish engulfing candle, pinbar, or on any of the multiple green candles that eventually break the red candle (ideally on the candle that breaks)
4. MACD: MACD histogram bottoming out, as indicated by the histogram becoming less negative (changing from red to pink)
Short Trade Setup: False Breakout
To open a short position, we are waiting for price to break above the horizontal resistance @ 28.4K and then fall back down.
Trade Entry Confirmation:
1. Price Action: Price breaks above the high of 28.4K and then rapidly falls below 28.4K, forming a bull trap
2. Candlestick Pattern: A breakout candlestick (candle close above 28.4K) followed by a breakdown candlestick (candle close below 28.4K)
2.1 Ideally breakout and breakdown candlesticks are consecutive candles, but can also have a few candles in between the two
2.2 Ideally the breakdown candle has a large candle body with very small wicks
3. Volume: Above average volume (volume above the average volume line) on both breakout candle and breakdown candle, ideally the breakdown candle's volume is a local high
4. MACD: MACD histogram topping out, as indicated by the histogram becoming less positive (color changing from dark green to light green)
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.
MAKE SURE YOU FOLLOW ME SO THAT YOU DONT MISS TRADE SIGNALS, GET THE LATEST SL AND TP LEVELS, AND FOLLOW THE TRADE PLAY OUT 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.
Bitcoin has pumped massively this month, especially in the past few days. In previous years, Bitcoin has also tended to pump in December in what some call the "Santa Rally". Historically speaking, this rally in December has been followed by a correction in January, so it's important to exercise some caution. In fact, it would be very healthy to have a correction in order for us to set up for another bullish move up. If we continue to go parabolic without a correction / consolidation, we increase the risk of a blow-off top. Personally I'd prefer we have a more sustainable bull market that takes us into 100K+ rather than a short term parabolic move that tops out at $40-50K.
The two main levels immediately significant on the charts that we want to focus on are the new All-Time-High of 28.4K and the 200MAs @ the 26.3K zone. We will be looking for trading opportunities in these two areas, and I've laid out three potential trade setups in detail below
Trade Recap
Yesterday we has a retest and continuation trade where BTC moved down to test the 200MAs and successfully bounced up, giving us a 2:1 RRR winning trade.
Long Trade Setup #1: Retest and Continuation
To open a long position, we are waiting for price to retrace back down to test the 200MAs and then continue moving up.
Trade Entry Confirmation:
1. Price Action: Price needs to move back down to the 200MAs and bounce back up (200MAs currently projected to be 26.3K zone).
2. Candlestick Pattern: A bullish candlestick pattern such as a bullish engulfing candle, a pinbar, or a multiple candlestick breakdown (a large red candle followed by multiple green candles that eventually close above the open/high of the large red candle)
3. Volume: Above average volume on the bullish engulfing candle, pinbar, or on any of the multiple green candles that eventually break the red candle (ideally on the candle that breaks)
4. MACD: MACD histogram bottoming out, as indicated by the histogram becoming less negative (changing from red to pink)
Long Trade Setup #2: Breakout and Continuation
To open a long position, we are waiting for price to break resistance, move back down to test previous resistance as support and then bounce back up.
Trade Entry Confirmation:
1. Price Action: Price breaks above the high of 28.4K with force, creating space between the price and 28.4K, falls back down to 28.4K and bounce back up.
2. Candlestick Pattern: A bullish candlestick pattern such as a bullish engulfing candle, a pinbar, or a multiple candlestick breakdown (a large red candle followed by multiple green candles that eventually close above the open/high of the large red candle)
2.1 Ideally Engulfing / Break candle has a large candle body with small wicks
2.2 Ideally Engulfing /Break candle closes near the highs of the candle
3. Volume: Above average volume on the bullish engulfing candle, pinbar, or on any of the multiple green candles that eventually break the red candle (ideally on the candle that breaks)
4. MACD: MACD histogram bottoming out, as indicated by the histogram becoming less negative (changing from red to pink)
Short Trade Setup: False Breakout
To open a short position, we are waiting for price to break above the horizontal resistance @ 28.4K and then fall back down.
Trade Entry Confirmation:
1. Price Action: Price breaks above the high of 28.4K and then rapidly falls below 28.4K, forming a bull trap
2. Candlestick Pattern: A breakout candlestick (candle close above 28.4K) followed by a breakdown candlestick (candle close below 28.4K)
2.1 Ideally breakout and breakdown candlesticks are consecutive candles, but can also have a few candles in between the two
2.2 Ideally the breakdown candle has a large candle body with very small wicks
3. Volume: Above average volume (volume above the average volume line) on both breakout candle and breakdown candle, ideally the breakdown candle's volume is a local high
4. MACD: MACD histogram topping out, as indicated by the histogram becoming less positive (color changing from dark green to light green)
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.
MAKE SURE YOU FOLLOW ME SO THAT YOU DONT MISS TRADE SIGNALS, GET THE LATEST SL AND TP LEVELS, AND FOLLOW THE TRADE PLAY OUT 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.
Nota
Potential long entry forming here if we close this 15min candle above the red candle 2 candles prior.Nota
High risk entry for btc as strength of bounce as indicated by candle size, isn’t as big as I’d like. But could be a good place for those DCAing / moving into position to accumulate. Or for those high risk takers. Again, high risk signal!
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Youtube Video Analysis: youtube.com/channel/UCPwR8Rv2YVI7qZIhedX7pQw
Youtube Video Analysis: youtube.com/channel/UCPwR8Rv2YVI7qZIhedX7pQw
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