Swing Trading, Altcoins & Crypto Friday - 15th October 2021
$BTC $ETH $MATIC $BNB $MRPH $ONE $TEL $Doge
So far this weak is boring for the #Altcoin investors although Bitcoin is consistently moving up towards the 63K-64K zone.
But now few altcoins are showing signs of big momentum and they can fly in the next few days.
Before discussing the trade ideas, let’s learn something about swing trading and the right approach to use a stop loss.
This is our new segment “CM Learning”
Nice name right!
CM Learning - Swing Trading & Risk Management
Many people are approaching #Crypto Market as a quick rich scheme and exchanges are ready to cash in this greed by providing 100x leverage.
The daily dopamine of 24X7 price movements makes it easy to get trapped into high risky leveraged bets and eventually forced to lose it all.
Understanding the Nature of Crypto Market
Cryptocurrencies are the most volatile speculative instruments with nearly no regulations. So you have
7000+ Cryptocurrencies
Prices ranging from $0.00001 to $100000
100X Leverage (Buy $10000 value of crypto with $100)
Supply ranging from few thousand coins to nearly unlimited
Mostly unregulated market
You are trading in the world where someday you wake up and see your crypto is showing 300% gain and on another nice day it’s down 70%.
So you can’t apply the same trading/investing approach with every instrument and you need robust risk management.
Deciding the Time Frame, Leverage, and Stop Loss
For successful trading/investing, you need clarity on your trading style based on the volatility and nature of the crypto:
How long you are going to hold the trade
What should be your stop loss and risk-reward
How much leverage you are going to use based on the stop-loss levels
$BTC or Large Cap Cryptocurrencies are less volatile compared to small #crypto. Many reasons - Volumes-Liquidity, Type of Investors/crowd, Ticket Price, etc.
If you are using a stop loss of 5-7% in a short-term Bitcoin trade, a similar strategy will not work in small crypto and you need a bigger stop loss with less quantity.
Your Risk-Reward completely changes based on the nature of the trading instrument.
So the position sizing will need to be adjusted as per the nature and leverage strategies will work better in Large #Crypto compared to small crypto.
I will explain the right approach to use stop loss, leverage in the next newsletter. Till that lets’ focus on charts.
Existing Swing Trade Updates
Bitcoin & Ethereum
$BTC & $ETT is moving towards their all-time high as discussed in the previous newsletter. 63K-65K will act as a strong resistance and it may take some time to cross this zone.
The trend is super positive but the 63-65K zone in $BTC and 4000-4250 in $ETH is a supply zone so you can book partial profits in your short-term trades only if it shows multiple price rejections near this zone.
Never try to short sell near all-time high zones.
A new entry can be taken once the prices sustain above all-time high.
Binance Coin ($BNB) & Telcoin ($TEL)
In the last newsletter, I have shared the swing trade plan for $BNB & $TEL and both got activated as prices crossed above the given levels.
Holding these trades with the stop loss shared in the last newsletter. Currently, prices are trading below our buying levels but I am expecting it to give a good return. So hold with the stop loss given in the last newsletter.
$BNB
$TEL
New Swing Trade Idea - $MATIC
#Polygon ($Matic) is giving the sign of breakout and I had already tweeted about it on 8th October to add it.
$MATIC can be added at the current price between $1.47-$1.53.
I am not expecting it to go below $1.3.
Our stop loss will be $1.27 on a 30-minute candle closing basis. This means if it sustains below $1.27 for more than 20-30 minute we will exit.
The first target I am expecting is $1.75-$1.8 and thereafter $2.2-$2.4.
Decide the buying quantity as per the risk involved. Here we are taking a risk of $0.25-$0.30 for the minimum potential return of 0.70-0.90.
#Dogecoin
I had already shared the swing trade strategy on $doge. The deep consolidation giving signs of a big breakout. Keep an eye on (use price alert tools) and you can enter once prices sustain above $0.26-0.27. Check the dogecoin trade plan in this previous newsletter
Longterm Crypto Updates
I had discussed the cryptocurrencies which can give multibagger returns (Check Here). For these cryptos, you can’t use 10-20% stop loss.
You need to look at the bigger picture. For a 10X potential crypto don’t check prices at every 10% up or down move.
$MRPH
Consolidation continues in $MRPH. Prices fell and took support exactly at $3.5. Many users have taken the entry near $3.5-$3.6 as I had already posted in advance that its a support zone and you can take entry near $3.5 (check here what I posted)
Now it’s trading around $4.23. Already up nearly 20% from the buying zone posted in the previous newsletters.
$ONE
Deep consolidation continue near all-time high zone
$FTT
It took me 5 hours to prepare this and finally, the long newsletter ended here.
Thanks for reading.
Just wanted to say thanks for sharing the alpha bro keep up the good work, going to enter matic now haha