How Everything Went 100% Right With My $7.3K Long

The sixth installment of my commerce journal options one in every of my finest Bitcoin (BTC) swing trades ever, catching a lot of the 40% transfer that caught many merchants off guard. 

This was a simple commerce for me, filling bids in an space that I used to be anticipating to be close to the potential backside. The complete commerce is immortalized in a twitter thread. After closing this commerce, I opened a brand new one on the retrace, which remains to be energetic.


Establishing the commerce

Entries: $7,390, $7,450 ($7,420 common entry)

Targets: $7,712, $eight,535, $10,000

Cease loss: I set the cease loss at $7,240, beneath the 61.eight% fib and up to date swing low. This could lead to a 2.Four% loss on the place and a 1% portfolio loss. 

Danger / reward: Goal 1 = 1.62, Goal 2 = 6.19 Goal Three = 14.33

Half 1: Catching Bitcoin’s largest pump since 2011

As mentioned in my earlier journal, after a major break down from the bear flag on Oct. 23, Bitcoin value approached a purchase order that I had set in June 2019. There was no rational cause for me to take away this order as doing so could be an emotional resolution based mostly on the current drop. I stuffed my bids at $7,390 within the highlighted zone beneath. 

This additionally amounted to an virtually excellent 61.eight% retrace of the whole transfer from the $Three,100 backside to the $13,800 prime, thought-about by many to be a great entry. 

XBT USD each day chart. Supply: TradingView

Additional, Bitcoin was flashing a bullish divergence on each time-frame starting from the Four-hour to the Three-day time-frame. These divergences ultimately confirmed on all time frames, proven beneath on the each day chart.

BTC USD daily chart

BTC USD each day chart. Supply: TradingView

I doubled down on this place on Oct. 24 after value confirmed a transparent swing failure sample (SFP), wicking beneath a key swing low from months in the past and shutting above. 

That is considered as an indication that liquidity has been engineered by a big occasion, who has seemingly moved priced beneath a sure stage to brush stop-loss orders and fill bids by engaging merchants to go quick. This SFP is proven beneath, each on the each day and Four-hour time frames.

BTC USD daily chart

BTC USD each day chart. Supply: TradingView

BTC USD 4-hour chart

BTC USD Four-hour chart. Supply: TradingView

The way it labored out

Oct. 25th and 26th noticed one of many largest each day strikes in 24 hours within the historical past of Bitcoin, and the biggest since 2011 — a 40% pump. 

All Three of my targets had been hit, that are illustrated beneath. The primary goal was just under the underside of the earlier buying and selling vary, a possible level of resistance. Contemplating the 40% transfer, this was a really early place to start out taking revenue, however I used to be comfy locking in positive factors in an space the place the worth was more likely to stall, if not reverse again down. I offered ⅓ of my place right here. 

BTC USD 4-hour chart

BTC USD Four-hour chart. Supply: TradingView

BTC value moved rapidly via the primary goal, and in a matter of hours had reached the top quality, filling my second spherical of asks at $eight,500. This accounted for one more ⅓ of my place closing.

BTC price

At this level, I didn’t have an actual take revenue set, as I wished to observe value motion for a great place to shut the remaining ⅓ of the place Worth in the end moved above $10,000 rapidly, so I moved a cease loss to only underneath this psychological stage. It was evening time the place I stay, so I went to sleep and awoke “stopped out” at just below $10,000. 

This commerce (alongside an enormous transfer on Tesla) accounted for a big sufficient acquire to meet my revenue quota for the remainder of 2019. As I all the time say, the much less I commerce, the extra I make. 

Half 2: Establishing my new Bitcoin commerce

Entry: $eight,995

Targets: $9,600, $9,809, $10,379.15, $10,943, $12,700… and a few increased!

Cease loss: $eight,775

Entry Thought

As chronicled within the earlier commerce, Bitcoin made an enormous transfer after which started to retrace. For me, the 40% Bitcoin pump was an indication that the draw back was seemingly over for good, and that it was time to proceed searching for lengthy entries. 

On any impulsive transfer, it’s common to see a 50% retrace, a knee-jerk promoting response to an enormous change in market circumstances. For that reason, I used to be eyeing the 50% retrace for an entry. 

BTC USD 4-hour chart

BTC USD Four-hour chart. Supply: TradingView

Worth dropped to the 50% stage, filling my bids for a brand new Bitcoin place. The chart beneath exhibits contemporary areas of curiosity I highlighted for a brand new commerce, together with the swing excessive ($eight,995) on the Four-hour chart, instantly after the transfer down from late September. That is why I selected to set my bids on this line. 

BTC USD 4-hour chart

BTC USD Four-hour chart. Supply: TradingView

The strains drawn on the above chart account for seemingly short-term targets, in addition to space beneath to make use of for cease losses (with a little bit of room beneath for a wick). I’ll proceed to replace this commerce because it continues.

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. You must conduct your individual analysis when making a call.

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