After the bloodshed that was the sell off in alts many of them have put in reversal patterns, including Ethereum!
Ethereum's Bullish U-Turn Pattern
Yesterday's reversal candle in Ethereum was rather sweet for a couple reasons.
- We broke the 280 level support level only to rally and close above it
- We got a reversal candle that closed near the low of the prior day (above would be ideal but close enough)
- This happen on a large spike in volume.
Basically we got my favorite entry pattern to get long crypto: a bullish u-turn.
The fact that is happened right at a previous support level is why I particularly liked it.
My Gameplan:
Looking at the chart you can see the 280 support line and yesterday's reversal candle. The entry signal was the close of that candle. I was not around for it but got online a few hours later and was able to jump in at 281.
Profit Target:
- The prior top (its more a consolidation) that lines up to the next prior support line drawn at 368.
Stop Loss:
- A break of yesterday's low at 250.
Risk/Reward = 87 potential profit vs. 31 potential loss for a 2.8 ratio.
If there is one thing that I preach as a must on trades is that you need to get a minimum 2 to 1 risk/reward and this ETH setup satisfies that.
Clean and Simple
There are 100's of indicators that you can use, but after 15 years of trading I found price, volume and basic support/resistance levels work best for me. This ETH setup is a nice example of that.
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Disclaimer: All info in this post is my opinion and for informational purposes only
Free e-book: ScaredyCatGuide to Knowing What the Heck Bitcoin Is
Disclaimer: All info in this post is my opinion and for informational purposes only