This trading setup outlines a short-term, or scalp, short position on the SOL/USDT pair on the 30-minute timeframe. The logic is fundamentally based on a confirmed market structure shift from bullish to bearish.
Technical Analysis of the Setup Components:
Ascending Trendline Break: The first warning signal is the decisive break of the primary ascending trendline (green line). This indicates a weakening of buyer strength and a loss of bullish momentum.
Change of Character (CHoCH): Following the trendline break, the price failed to create a new higher high. Instead, it formed a lower low than the previous one, signaling a "Change of Character" in the market structure from bullish to bearish. This is a key signal to start looking for short opportunities.
Break of Structure (BoS) Confirmation: By breaking a significant prior support level, the price created a bearish "Break of Structure" (BoS). This move confirms the new downtrend and suggests that sellers are now in control of the market.
Strategic Entry Point: The entry is set at $161.12. This area represents a broken support zone that is now expected to act as resistance (a classic Support-Resistance Flip). Entering on a pullback to this broken structure is a high-probability strategy for joining the new trend.
Risk and Reward Management:
Stop Loss (SL): The stop loss is placed at $162.07, just above the most recent lower high. This is a logical placement, as a price move above this level would invalidate the current bearish scenario.
Take Profit (TP): The take profit is targeted at $156.90, near the next major support or demand zone, making it a reasonable objective for the bearish leg.
Risk/Reward (R/R) Ratio: The setup offers an excellent risk/reward ratio of 4.44 to 1. This means the potential profit is more than four times the potential loss, which is highly favorable from a risk management perspective.
Technical Analysis of the Setup Components:
Ascending Trendline Break: The first warning signal is the decisive break of the primary ascending trendline (green line). This indicates a weakening of buyer strength and a loss of bullish momentum.
Change of Character (CHoCH): Following the trendline break, the price failed to create a new higher high. Instead, it formed a lower low than the previous one, signaling a "Change of Character" in the market structure from bullish to bearish. This is a key signal to start looking for short opportunities.
Break of Structure (BoS) Confirmation: By breaking a significant prior support level, the price created a bearish "Break of Structure" (BoS). This move confirms the new downtrend and suggests that sellers are now in control of the market.
Strategic Entry Point: The entry is set at $161.12. This area represents a broken support zone that is now expected to act as resistance (a classic Support-Resistance Flip). Entering on a pullback to this broken structure is a high-probability strategy for joining the new trend.
Risk and Reward Management:
Stop Loss (SL): The stop loss is placed at $162.07, just above the most recent lower high. This is a logical placement, as a price move above this level would invalidate the current bearish scenario.
Take Profit (TP): The take profit is targeted at $156.90, near the next major support or demand zone, making it a reasonable objective for the bearish leg.
Risk/Reward (R/R) Ratio: The setup offers an excellent risk/reward ratio of 4.44 to 1. This means the potential profit is more than four times the potential loss, which is highly favorable from a risk management perspective.
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.
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.