That is the second installment of my commerce journal, which incorporates accomplished trades on large-cap altcoins XRP and Ether. I’ve discovered that crypto traders are at all times inquisitive about one another’s positions and sometimes these conversations happen in non-public DMs and telegram chats.
The aim right here is to supply some transparency on my buying and selling routine and I hope merchants discover the method of observing every step of each commerce instructional. Buying and selling place sizes have been redacted, however they’re at all times calculated primarily based on a 1% portfolio loss utilizing the cease loss and entry as a information.
Entry: .00002769 Satoshis (sats)
Targets: I set my first goal at .00002933 (sats) which is the primary resistance I’ve recognized for a 6% acquire. My second goal is at .00003085 (sats) which is close to the second resistance at .00003297 (sats) and offers an 11.4% acquire. I’ve set this goal close to the principle resistance on the chart as that is an space the place the worth beforehand had a serious breakdown. My promote order is under it simply in case shorts front-run the road. In whole, this could be a 19% acquire on my XRP/BTC place.
In case the commerce goes stomach up I’ve positioned a cease loss at .00002690 (sats) which equates to a -2.85% loss.
It’s additionally good follow to contemplate the chance to reward ratio when investing, particularly with altcoins given Bitcoin’s present dominance price. The danger to reward ratio measures the distinction between a commerce’s entry level all the best way to the stop-loss and promote or take-profit order.
Evaluating these two offers the ratio of revenue to loss, or reward to threat. For this commerce, it’s roughly 2.08 on the first goal, Four on the second goal and 6.7 on the closing goal.
9/19/19
Normal evaluation
XRP has been in a sustained downtrend for months, which I’ve been publicly sharing on Twitter and watching intently. The worth has flipped a number of ranges of help into resistance on the best way down and the primary signal of a possible backside for me is a bullish divergence. One lastly appeared on each the every day and weekly timeframe (charts pictured under) round Sept. sixth.
XRP/BTC Weekly Chart. Supply: TradingView
Entry concepts
I recognized .00002769 (sats) as a contemporary space of resistance that was created on the XRP drop. My plan was to attend till this line flipped from resistance to help earlier than coming into a commerce, as I want buying and selling on confirmations. XRP value broke by way of this space violently on Sept. 17 and continued up for one more day earlier than violently falling when Bitcoin sharply corrected.
At this level, my alarm went off once more at .00002769 (sats) on the help retest, however the value dumped by way of with pressure as Bitcoin continued to appropriate. XRP bounced again in a short time, leaving a protracted wick under. At this level, I used to be assured to enter a commerce and took the breakout again above resistance on the next candle.
There have been three quick time period targets that I used to be eager about, that are listed above. The primary two had been areas of resistance that had been left behind when the worth dumped. The third was barely under the important thing resistance on the chart (high black line). I selected to set my promote orders barely under this level as a result of shorts usually front-run key areas and I needed to make sure that my orders fill.
XRP/BTC Every day Chart. Supply: TradingView
The way it labored out
The primary goal was hit shortly and I selected to not shut the commerce with a view to see if the realm held as help, which it did. I set a restrict promote order on the second goal (.00003085 sats) for half of my place, which fired not lengthy after.
XRP value almost reached my closing goal, however ended up making a bearish SFP above the earlier swing excessive, which was a sign for me to shut and reevaluate. I took revenue on the rest of my place on the earlier swing excessive on the best way again all the way down to .00003208 (sats) slightly than wait to see if my closing goal would hit.
XRP/BTC Every day Chart. Supply: TradingView
As well as, I observed a transparent bearish divergence forming on the every day chart, in addition to hidden bearish divergence on the weekly. Each signaled to me that it was time to get out whereas I used to be forward and in revenue. On the time, Bitcoin additionally seemed fairly bullish to me and my assumption was that a big Bitcoin value transfer might negatively have an effect on the XRP/BTC pair.
XRP/BTC Every day Chart. Supply: TradingView
The primary promote order elicited an 11.4% revenue and my second order secured a 15.8% revenue. Whole revenue for the place averaged out at 13.6%.
Entry: I hope to catch the breakout from bullish consolidation at .02065 (sats)
Goal: I’ve set my goal at .022229 (sats) which is the earlier swing excessive for a revenue of seven.6%. A cease loss was set at .02044 (sats) for a .98% potential loss and the chance to reward ratio for this commerce was 7.78.
Normal evaluation
Ether has been in a sustained downtrend in opposition to Bitcoin because it’s all time excessive in January of 2018. The altcoin lastly confirmed a transparent reversal sign this month when it fashioned a head and shoulders sample and breaking out on spike in buying quantity.
I’ve been buying and selling Ether aggressively for the reason that center of September and my first commerce was the breakout of the pinnacle & shoulders at .017976 (sats). I closed this place on the backside of the every day help at .021914(sats) which equated to a 23.5% acquire.
ETH/BTC 4-Hour Chart. Supply: TradingView
Entry concepts
Though I’m buying and selling Ether in opposition to Bitcoin, the USD pair gave a stable signal of reversal. Ether value deeply pierced the weekly demand and bounced which resulted in lengthy decrease wicks on a number of candles. The relative power index (RSI) was oversold and fashioned a powerful bullish divergence in opposition to Ether’s spot value, that means the RSI made a better low whereas Ether’s value made a decrease low.
ETH/USD Every day Chart. Supply: TradingView
In the meantime, the Bitcoin pair was cooling off after it’s robust transfer from the underside, and the pairing confirmed indicators of consolidation earlier than one other transfer up. I made a decision to play the breakout of the descending resistance, a sign to me that reaccumulation was probably ending and the worth was able to proceed it’s bullish motion.
With that mentioned, I used to be cautious of the truth that Ether’s value had already moved from oversold to overbought on the every day chart, so I considered this as a scalp play.
ETH/BTC 4-Hour Chart. Supply: TradingView
The way it labored out
The commerce instantly went my manner so I moved my cease loss into revenue and waited. Whereas analyzing the commerce, I revisited the provision zone that was pierced at my first exit and determined to maneuver my take revenue level down a bit under the equilibrium (EQ) of the middle dashed line.
ETH/BTC Every day Chart. Supply: TradingView
Barring an enormous transfer up, I observed that the worth was more likely to kind a bearish divergence with the RSI on the every day chart. I noticed this on a number of massive cap altcoins (together with XRP above), which added help to my concept that the pump was over for the second. Bitcoin was additionally wanting extremely bullish to me, which normally has a destructive impact on the ETH/BTC pair.
I’m glad I did as the worth was strongly rejected from this zone and my take revenue order fired at .022 (sats) for a pleasant 6.5% revenue.
One factor that may be taken away from this expertise is that preserving a journal permits a dealer to backtest and evaluation candle patterns and help / resistance ranges with out affirmation bias. This improves the power to execute and handle future trades.
The views and opinions expressed listed below are solely these of the (@scottmelker) and don’t essentially replicate the views of Cointelegraph. Each funding and buying and selling transfer entails threat. You need to conduct your personal analysis when making a choice.
