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Shedding Small Is Key To Lengthy Time period Success


In my fourth commerce journal, I’m updating my earlier Bitcoin (BTC) place in addition to discussing the explanations that I’ve reentered a brand new lengthy place on the identical asset. I’m additionally highlighting a fast loss on Ravencoin (RVN), which dropped alongside Bitcoin. As I typically say, this loss is proof that you just win some and also you lose some. What issues is that you just lose small.

BTC/USD

As talked about beforehand, I took a swing place in Bitcoin on Sept. 26 at $7,914. I exited 50% of the commerce at $8,625. After transferring my stops nicely into revenue and beneath help, I ended out in revenue with the rest of the commerce, at $8,390. This amounted to an 8.9% revenue on the primary half of the place and a 6% revenue on the again half. As a complete, I bagged a 7.45% revenue on the commerce.

I reentered a brand new Bitcoin place on October 16th, at $7,940. 

Establishing the commerce

Entry: $7.940

Targets: $8,395, $8,949, $9,723

Cease Loss: I set the cease loss at $7,834 which is beneath the ascending channel help with a little bit of respiratory room to keep away from a protracted wick or shake out.

Calculating the risk-reward ratio

It’s additionally good follow to think about the danger to reward ratio when investing, particularly with altcoins given Bitcoin’s present dominance charge. 

The chance to reward ratio measures the distinction between a commerce’s entry level all the way in which to the stop-loss and promote or take-profit order. 

Danger/Reward: Goal 1 = 4.38, Goal 2 = 9.7 Goal 3 = 17.16

Entry thought

BTC USD 4-hour chart

BTC USD 4-hour chart. Supply: TradingView

The 4-hour chart reveals a transparent ascending channel on the base of the massive drop from $10,000, generally known as a bear flag. There’s debate as as to whether this qualifies, as the worth has been touring on this sample for longer than can be anticipated from a basic flag. Whereas ascending channels extra typically break down than up, the danger/reward for a protracted place close to the channel backside justified a place with a good cease. 

You learn that accurately – I took a protracted place in opposition to the pattern, even when the worth was more likely to proceed down, which is one thing I typically do when the potential reward is mathematically far larger than the small loss. Additional, value reversals typically start as ascending channels, as there are few methods for the worth to backside out after which proceed up. 

I additionally like taking trades on the backside of ascending channels, as a result of it gives the chance for a good cease that may be moved up with the ascension of the channel over time. Your cease loss naturally reached the purpose of entry if the commerce stays legitimate.

I used to be watching the worth motion carefully and recognized a hidden bullish divergence with the Relative Energy Index (RSI) on the 4-hour chart. The worth was close to the underside of the channel. As talked about earlier, I favor to set orders above the right entry or help, as a result of trades are sometimes entrance run when everyone seems to be watching the identical space. 

As soon as the bullish divergence was confirmed and the worth bounced a bit, I entered a protracted commerce. The picture above reveals the best setups from the underside of the potential reversal at $7,908. Luckily, I managed to enter a bit greater. 

I selected three potential targets, though I plan to exit the vast majority of the commerce on the first goal. The targets are the equilibrium of the ascending channel, the highest of the channel, and the 4-hour provide zone from the start of the transfer down weeks in the past.

Bitcoin value is at present at $8,087 and slowly transferring in the direction of the primary goal. The cease loss is illustrated in crimson on the chart beneath. My plan is to constantly replace this commerce because it develops and I intend to maneuver up my cease loss as warranted.

BTC USD 4-hour chart. Supply: TradingView

RVN/BTC

Entry: .00000415 satoshis (sats)

Targets: .00000518 (sats), .00000588 (sats), .00000892 (sats)

Cease loss: .00000408 (sats) for a possible lack of 1.68%.

Entry thought

Ravencoin (RVN) appeared to have bottomed out in a weekly demand zone that was fashioned across the all-time low at .00000266(sats). The worth confirmed important bullish divergence with the RSI on the every day chart in confluence with the contact on the highest of weekly demand. This was a stable signal of a reversal, however not an space that I used to be considering buying and selling on the time. .00000415 (sats) was the primary key resistance that I wished to see flipped to help, so I used to be on the lookout for an entry on the primary retest of this space after the break. I took the commerce on Oct. 15th, because the help take a look at seemed to be confirmed.

RVN BTC weekly chart

RVN BTC weekly chart. Supply: TradingView

RVN BTC 4-hour chart

RVN BTC every day chart. Supply: TradingView

Including gasoline to the hearth, Ravencoin confirmed important hidden bullish divergence on the 4-hour chart proper on the help line. I took this as a transparent signal of possible continuation up. Essentially the most engaging facet of this commerce was {that a} tight cease was justified and my thought can be rapidly invalidated if I used to be incorrect.

RVN BTC 4-hour chart

RVN BTC 4-hour chart. Supply: TradingView

The way it labored out

Poorly. Bitcoin dropped inside hours of this commerce, and I used to be stopped out with little fanfare. This commerce went south inside 24 hours. I misplaced 1.68% on the commerce however this was far much less as a share of my total buying and selling portfolio. 

The views and opinions expressed listed below are solely these of the (@scottmelker) and don’t essentially mirror the views of Cointelegraph. Each funding and buying and selling transfer entails danger. It’s best to conduct your personal analysis when making a choice.





Source cointelegraph.com

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CryptoCurrencyUSDChange 1hChange 24hChange 7d
Bitcoin8,270.9 0.35 % 3.41 % 8.55 %
Ethereum178.64 0.22 % 3.55 % 5.50 %
XRP0.2538 0.74 % 4.35 % 9.30 %
Bitcoin Cash247.72 0.49 % 8.07 % 15.54 %
Tether1.000 0.23 % 0.02 % 0.07 %
Litecoin56.04 0.33 % 6.29 % 12.01 %
EOS3.170 0.91 % 7.15 % 11.58 %
Binance Coin20.60 0.21 % 1.14 % 4.80 %
Bitcoin SV115.52 0.01 % 7.27 % 14.10 %
Cardano0.04347 0.27 % 4.50 % 0.85 %

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