Why you should not trade the breakout of a triangle
Mis à jour
Just a quick reminder of what BTC can do to you, if you're doing the basic triangle thing on the 4h timeframe.
BTC just loves to turn greed into fear, it's one of its main feature. If you are following the simple idea that if btc breaks up from triangle, it's a buy, or if it breaks down it's a sale, you better be prepared to see the price do the opposite of what you think.
I got rekt too many time in the past, with too much confidence in my chart.
I finally figured it was because 95% of the traders would draw the same basic line that I did. But 95% of the traders are losing money...
Straightforward trades are meant to be the losing strategy.
What can we do to take some good trade then : No trade ? Going opposite of what you think ?
No.
What you should do instead, is not drawing triangle. Trade on larger timeframe.
For instance, i shared an idea here :
It is very unlikely, based on history, that this chart is wrong. So the bet that we are going to see new ATH sooner than later is a rather safe one.
Based on that, what is the price I should entry ? Right now ? What is the stop loss ?
Well, now is a very good entry price if you consider a very loose stop loss (@19k for instance) and a TP target around 60k. It might sound crazy, but this simple and straightforward trade has a better chance than the short term trade with the triangle. But you have to stick to the plan. You don't want to be panic selling if btc goes down through all the support lines. The stop loss you chose at the moment you opened your position, is the right stop loss and it remain the right stop loss until the end of time. There's no reason, even if the price action and the news are bad, that the stop loss you chose while you were not being emotional becomes bad.
Be patient. Go against your urge to trade or to find the very bottom. Search on larger timeframes, be confident you're not exposed to basic traps. Trust your initial trade no matter what, never ever sell in a panic.
Overall, finding support and resistance is a better strategy than expecting BTC to follow any trendline. Especially when the monster goes parabolic.
BTC just loves to turn greed into fear, it's one of its main feature. If you are following the simple idea that if btc breaks up from triangle, it's a buy, or if it breaks down it's a sale, you better be prepared to see the price do the opposite of what you think.
I got rekt too many time in the past, with too much confidence in my chart.
I finally figured it was because 95% of the traders would draw the same basic line that I did. But 95% of the traders are losing money...
Straightforward trades are meant to be the losing strategy.
What can we do to take some good trade then : No trade ? Going opposite of what you think ?
No.
What you should do instead, is not drawing triangle. Trade on larger timeframe.
For instance, i shared an idea here :
It is very unlikely, based on history, that this chart is wrong. So the bet that we are going to see new ATH sooner than later is a rather safe one.
Based on that, what is the price I should entry ? Right now ? What is the stop loss ?
Well, now is a very good entry price if you consider a very loose stop loss (@19k for instance) and a TP target around 60k. It might sound crazy, but this simple and straightforward trade has a better chance than the short term trade with the triangle. But you have to stick to the plan. You don't want to be panic selling if btc goes down through all the support lines. The stop loss you chose at the moment you opened your position, is the right stop loss and it remain the right stop loss until the end of time. There's no reason, even if the price action and the news are bad, that the stop loss you chose while you were not being emotional becomes bad.
Be patient. Go against your urge to trade or to find the very bottom. Search on larger timeframes, be confident you're not exposed to basic traps. Trust your initial trade no matter what, never ever sell in a panic.
Overall, finding support and resistance is a better strategy than expecting BTC to follow any trendline. Especially when the monster goes parabolic.
Note
To quote myself "BTC just loves to turn greed into fear, it's one of its main feature."Look at what level we are on alternative.io crypto greed and fear index.
Note
You've been warned here.
Publications connexes
Clause de non-responsabilité
Les informations et les publications ne sont pas destinées à être, et ne constituent pas, des conseils ou des recommandations en matière de finance, d'investissement, de trading ou d'autres types de conseils fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.