Hello everyone. First of all I would like to remind you that this is NOT AN INVESTMENT RECOMMENDATION, we do these trading analyses to learn together and for fun. That said, let's take a look at how the short trade on the ETH/USD pair is developing for the opening of this new week.
The image below shows a screenshot of the ETH/USD chart at the time of starting this post, so we are going to do the market analysis as if we were in real time.
We must always keep in mind that the cryptocurrency market is very dynamic and volatile, so from one moment to the next the figure can change drastically, in reality strong movements happen quite quickly and are usually best observed in smaller timeframes (15 min - 5 min - 1min).
That is why real-time decision-making carries with it a lot of pressure in execution, and must mainly be supported by an analysis based on a trading strategy to avoid falling into bad decisions, guided by emotions, that cost us extra money in commissions, or make us lose money over trading.
On the 1H chart we can see two quite important levels where the price has reacted so far, these are:
1.- The opening of the 1H candle on Sunday at 18:00 PM
2.- The weekly opening on Sunday at 00:00 or midnight.
We could say that the price is currently resting in the range between both levels, and that liquidity was found to reject or bounce a first attempt of the downward movement in the area of the weekly midnight opening.
Now it is important to look at the weekly economic calendar to be aware of what events or news can give the price a boost. We see that we have some important news that may generate volatility in the rest of the week on the following days:
Thursday, May 30 - 8:30 a.m.
Thursday, May 30 - 10:00 am
Friday, May 31 - 8:30 am.
Now let's see how the price has moved so far in the London session as we write this post to make a real-time decision and manage the trade in the best way.
The price has dropped back to the weekly opening zone, so you could take advantage of the move to take a partial profit of about 30% of the position, with a 3.6% profit so far. Not bad really. Today, Wednesday, May 29, 2024, there is no relevant news that serves as a catalyst in the price, so we can also observe that if the movement is rejected again in the current zone and does not break that level to the downside, we will most likely stay in a range between the referred levels to continue accumulating liquidity in both directions, Both short liquidity and long liquidity at the bottom, and probably perform a double liquidation maneuver (in both directions) on Thursday or Friday taking advantage of the most impactful news.
Considering this new market perspective, it may be interesting and convenient to protect the trade and withdraw the risk of the trade, that is, move the stop loss to the entry point or perhaps to the level of $3900 so as not to lose if the price goes against us first and leave open the possibility of gaining something more if it goes in our favor.
Thus, in the worst-case scenario we are contemplating for this week, we could have achieved 1.1% - 1.2% of the total operation. Remember that adding small profits in trading results in big profits in the long run.
It is also worth mentioning that the management of each trade is a very personal thing. That is why it is so difficult to copy another trader, since his initial approach may not occur in the market, and in the middle of the week he decides something that others do not know, do not see, or cannot copy, and in that case the trader can make money even if he is wrong in his initial set, But with proper management of the operation and risk, you can make a profit from the market. Meanwhile, on the other hand, those who copied the initial trade may end up losing capital if the price goes against their initial idea and they don't manage the trade in the same way.
In conclusion, to be profitable in the financial markets, you need to have your own strategy and develop your own skills as a trader.
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