Namaskar LuckySevenTrader Community:
Recently, #Bitcoin❗ broke below its lower trendline support, indicating a potential shift in momentum. After this breakout, the price quickly encountered a minor supply zone, leading to a rejection and further decline. This setup has provided an ideal opportunity for shorting, and I’ve decided to enter a short trade with a 1:3 risk-to-reward ratio.
Why I Entered a Short Position
Trendline Breakout: The lower trendline had been holding for a while, but Bitcoin’s recent movement below this level shows that bearish momentum may be taking control. A breakdown of such key support often signals further downside potential.
Rejection from Supply Zone: After breaking below the trendline, Bitcoin tested a minor supply zone but faced rejection. This rejection suggests that sellers are active at these levels, preventing further upward movement and increasing the likelihood of a decline.
Trade Details
Entry Point: I entered the trade shortly after confirming the breakout and rejection. This ensures that I’m not prematurely jumping in without proper confirmation.
Risk-to-Reward Ratio: My target for this trade is set with a 1:3 risk-to-reward ratio, meaning for every unit of risk, there’s a potential to gain three. This strategic ratio helps manage risk effectively and increases the potential for profit.
Stop-Loss: To manage risk, I placed a stop-loss above the supply zone. This protects against unexpected price movement and ensures that losses are minimized if the trade doesn’t go as planned.
Trade With Confirmation
If you’re considering trading Bitcoin, remember to wait for confirmation. While this setup looks promising, it’s important to verify that the rejection and trendline break are sustained before entering a position. Look for additional signs like candlestick patterns, volume spikes, or other technical indicators that support the short idea.
Key Takeaways
The Bitcoin market can be volatile, and technical patterns like these offer good opportunities when approached with caution. If the bearish momentum continues, there’s a good chance this short position could reach its target, providing a profitable outcome.
Stay cautious, manage your risk properly, and always trade with confirmation to increase the odds of success.
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