What’s good guys?
I hope everyone is enjoying the good old pump for the altcoins…
For any of my stakers, Check out BSW on Binance.
Ok, so the basis of this chart is to help you understand my logic behind taking a trade. Now, this was a quick scalp, so i hope that you guys can take something from this. All that we discuss is included in this trade I took.
I have shared the other images before (Attached below) so as an exercise, go and explore my entries on the trades I have provided to understand my decision-making process and justify the reason for entry on the chart.
So here goes…
Why did I decide to take a short?
(Refer to the number annotations on the chart)
1) Whilst bitcoin was rising, I was paying attention to the idea that the move up was aggressive…Price had clearly moved away from the 50EMA (1) on the 5m time frame. I was anticipating a retrace.
2) Look below at the volume…Notice how we get one push up (3) then the second push up with mad volume amounts (2)
3) Notice point (4) – Big green vectors, Imbalances are present, buyers paying a premium price, sellers, selling at discount…(Shorts being opened also)
4) Point (5) Notice the volume profile bar…Price was trading above the Point of control and volume was not showing its hand on the attempts going up…Notice how the volume disappears in the volume bar below (2)
5) Can you see point (6)…The high volume area…See this area shows that interest on the way up came in, however, the same interest then forced the price down as the price came back into that range..
Trade was opened at 46507 trade was closed as the first red vector candle closed at 46146…Left some money on the table as it went down a little further, however, in my mind I saw that price had come back into the 50 and I was not going to risk allowing a profitable trade to turn into a loss.
Explore what else you can take from this move…
Frankly, there is not much? All we did was took a trade on the idea that volatility had forced the price higher and then we played the retrace game…Now there may have been many confluences that we could have considered with this trade, yet only a handful was used…
This leads me to the following: When deciding to take a trade, ask yourself…What do you see? don’t make the mistake of what you would “like” to see and trade-off that narrative, you trade what can be seen…If the price is not showing the strength to move up further, then at the point of that conviction you take your trade and assume your risk…
Sounds easily said than done which leads to the idea of confidence. If you are still feeling like you don’t want to trade for the fear of being wrong in the trade, guess what, you will be wrong, that is trading…But the goal is to be wrong as cheaply as possible…
Mad Love
T
