Profitable merchants deal with buying and selling like a enterprise and a part of treating your buying and selling like a enterprise includes holding a journal. Whereas everybody has a distinct format and choice, I usually use an Excel spreadsheet to assist with calculations and supply organizational readability.
Crypto traders are all the time inquisitive about one another’s positions and usually these conversations happen in personal DMs and telegram chats. The objective 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 academic.
Buying and selling place sizes are redacted, however they’re all the time calculated primarily based on a 1% portfolio loss utilizing the cease loss and entry as a information.
Chainlink (LINK)
Entry: .00016499 Satoshis (sats)
Targets: .00018564 (sats) for an 11% acquire close to the highest of weekly demand zone and .000224 (sats) for a 26% acquire close to the underside of blue resistance (see chart).
I’ve positioned a cease loss at .00016064 (sats) which equates to a -2.6% loss.
It’s additionally good observe to contemplate the chance to reward ratio when investing, particularly with altcoins given Bitcoin’s present dominance fee. The chance 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 danger. For this commerce, it’s roughly 4.5 at first goal 12.6 on the second goal.
As talked about earlier, place sizes are redacted and every commerce exposing the full portfolio to a 1% danger.
9/13/19
Basic evaluation
LINK caught my consideration on Sept. 9 because it was in a transparent corrective downtrend since hitting an all-time excessive. The blue zone was offering sturdy assist and was successfully the underside of a descending triangle. LINK worth broke down from this zone and retested it quite a lot of instances as resistance earlier than shifting away.
The altcoin then bounced off of the important thing assist at .00016499 (sats) and finally broke down, which grew to become my first space of curiosity to commerce. The inexperienced zone was an space of day by day demand (.00014863 to .00018564 (sats)) and a break under this may be bearish, and sure result in additional worth depreciation.
LINK/BTC Day by day Chart. Supply: TradingView
Entry concepts
If it breaks down right here, the primary attention-grabbing entry could be a breakthrough .00016499 (sats) which might recapture the previous assist. Ideally one want to catch a retest, however being prepared to probably commerce the breakout with a good cease was the thought, as LINK tends to essentially transfer and punish merchants ready for a clear retest.
In hindsight, I want I might have shorted this down as I used to be very assured that worth would drop after shedding the blue zone.
If LINK worth broke the descending trendline it could be one thing of a definitive finish to the downtrend. A break or retest of this space would change into a second commerce.
The way it labored out
By Sept. 19 the commerce proved to be successful. There have been 2 consecutive swing failure patterns (SFP) under the earlier swing low on the backside of the inexperienced vary with tweezer bottoms on the day by day chart.
Swing failure patterns are recognized when worth rapidly strikes to a key swing low (or excessive for a brief), wicks under and closes above. That is an indicator {that a} whale has pushed worth to that degree to search out liquidity to fill their orders and also known as “engineered liquidity.”
LINK/BTC Day by day Chart. Supply: TradingView
This was interpreted as a robust reversal sign and was an indication that LINK was about to pump. A full place purchase order fired as worth broke by the pink line and as talked about earlier than, I selected to play the escape with a preset restrict order.
Promote orders had been set at .000185 (sats) (50%) and .00022 (sats) which was the remaining 50% of the place. I’ve discovered that placing promote orders decrease than the targets helps to keep away from being front-run and this can be a technique I make use of with all my trades.
LINK/BTC Day by day Chart. Supply: TradingView
General the commerce went nice. Each targets had been hit and closed 50% of the place at every goal. LINK appeared to have extra gasoline within the tank however I selected to stay to the plan.
I wasn’t on the lookout for re-entry right now however I might take into account a re-entry with a retest of the pink line, or a break of the descending line talked about earlier. This commerce produced an 18% revenue.
Bitcoin (BTC)
Since topping out at $13,800, Bitcoin (BTC) has been on a little bit of a curler coaster however this doesn’t imply intraday and swing trades can’t be capitalized on. My targets had been set at $9,700 by $10,028 and thought entries had been at $9,367 and $9,321.
The chance to reward was 3.1 for the primary goal and 11.5 for the second goal. A stop-loss was positioned at $9,260 which equates to a 1.14% and 0.65% loss if that area is hit.
BTC/USD 4hr Chart. Supply: TradingView
Basic evaluation
I chart Bitcoin (BTC) greater than another asset, so I’m effectively tuned to its common motion. Importantly, as an American, I don’t commerce on any leveraged alternate since I don’t belief them. This implies I lack the flexibility to quick regardless that Kraken available. I merely don’t belief the provision of margin or the “rip-off wicks” which are usually seen liquidating and stopping out unassuming merchants.
Bitcoin worth has been slowly dropping for days and round Sept 24 it appeared able to fall off of a cliff. That stated, there’s a superb danger/reward for an extended if that is the underside however one would want a good cease.
It is a clear state of affairs of “shopping for assist.” The one concern is that the assist has been examined a number of instances which tends to make it weaker. The nearer to assist the higher entry to tighten up the cease loss. The channel can be unconfirmed on the backside and the resistance on the prime is evident.
The pink line represents a earlier swing low and I would like nothing to do with any candle closes under this line as a result of it’s going to clearly invalidate my premise.
BTC/USD 4hr Chart. Supply: TradingView
Entry thought
The confluence of a key assist from the earlier swing low ($9,321) and the underside of the potential channel represents a do or die level and it is rather straightforward to chop bait with a good cease if this goes the unsuitable approach.
The chance is having a cease loss fireplace and this degree turning into an SFP with only a wick under the pink line. That may be brutal and has occurred many instances. Setting the cease at $9,260 provides about $60 of leeway under the assist for an errant wick.
I made a decision to unfold the orders in a circle and the primary wick down crammed about 70% of the orders and was adopted by a pleasant bounce. I assumed which will have been the top of the dump there, however the remainder of my orders crammed on the pink line.
Not perfect, I might have slightly had the orders all fill on the primary drop. The truth that the value bounced and returned to assist is bearish however I’m sticking to my plan.
BTC/USD 4hr Chart. Supply: TradingView
The way it labored out
The commerce was a complete prepare wreck. That was the quickest that I’ve been stopped out of a commerce in a very long time, in all probability below 5 minutes from the second entry. Bitcoin worth hit the pink line and dumped by it in epic trend.
Clearly this was a completely terrible learn on the chart, however fortunately a good cease loss helped to mitigate losses. This could have been extraordinarily ugly with no tight cease, because it ended up being one of many largest pink candles in latest Bitcoin reminiscence. This commerce led to a lack of 0.9%.
One factor that may be taken away from this expertise is that holding a journal permits a dealer to backtest and evaluation candle patterns and assist / resistance ranges with out affirmation bias. This improves the flexibility to execute and handle future trades.
The views and opinions expressed listed here are solely these of the (@scottmelker) and don’t essentially replicate the views of Cointelegraph. Each funding and buying and selling transfer includes danger. It’s best to conduct your individual analysis when making a choice.
