This BTC trade is a little harrowing, I am long from around 4300 with small size.
It dumped out with large red volume but green buyers have stepped back in and may produce a reversal.
I may have just been too early on the trade rather than wrong outright. I originally had the downward movement marked as an ABC correction but would have done better to wait for a full 5 wave impulse with the end of the impulse marked by large green buying pressure volume.
In any case I am not going to average down even though it is still in my buying area because I am not at all sure that the selling volume is dried up. The big red vol bar on the 24th makes it hard to justify that the reversal is in place.
Regarding managing risk, I have found that scratching trades like this when they come back to break even is really a bad idea and hurts overall robustness.
It is much better to only begin tightening the stop AFTER AND ONLY AFTER the trade is somewhat profitable.
I am using the red linear regression line with wide settings for stop tightening if the trade becomes profitable. The point being that it's really important to achieve full target hits rather than getting taking out by too tight a stop.
Max risk is at 3428 and if it doesn't get stopped there it will probably take a week or more before I can tighten the stop.
It dumped out with large red volume but green buyers have stepped back in and may produce a reversal.
I may have just been too early on the trade rather than wrong outright. I originally had the downward movement marked as an ABC correction but would have done better to wait for a full 5 wave impulse with the end of the impulse marked by large green buying pressure volume.
In any case I am not going to average down even though it is still in my buying area because I am not at all sure that the selling volume is dried up. The big red vol bar on the 24th makes it hard to justify that the reversal is in place.
Regarding managing risk, I have found that scratching trades like this when they come back to break even is really a bad idea and hurts overall robustness.
It is much better to only begin tightening the stop AFTER AND ONLY AFTER the trade is somewhat profitable.
I am using the red linear regression line with wide settings for stop tightening if the trade becomes profitable. The point being that it's really important to achieve full target hits rather than getting taking out by too tight a stop.
Max risk is at 3428 and if it doesn't get stopped there it will probably take a week or more before I can tighten the stop.
Note
Buyers appear to be tricking back, but I'm still not adding until I see a convincing green volume bar.
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Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.