On the 28 October I entered a trade on Bitcoin. The details of my winning trade are detailed below in the 4 hour chart.
The price action in the chart demonstrates bullish price action. Price had aggressively moved up before starting to pull back. My view of the price action was that Bitcoin was still bullish but I had to wait for an opportunity to enter a trade that meets my entry criteria.
Price was forming a W pattern which is a bullish pattern, with more likelihood of success given that on the higher time frames Bitcoin is bullish. When price broke out and closed after breaking the neckline of the pattern I entered a long trade.
After entry the price continued to the upside until reaching 73,000. Price subsequently pulled back and subsequently the bulls tried to push the price higher and this was rejected and a large bearish candle (along with volume) occurred.
At this point I had the decision to make whether to leave the trade or decide if the information provided was suggesting that price was going to reverse. Based on the information I considered it more probable that price is going to return to the breakout area.
The trade was closed for a modest profit. As I write this and review the charts the price continued to move down, validating my view. Even if this price reverses back to the upside again I am still comfortable that I made the correct decision. It is of course disappointing that the gain I recognised is only a quarter of what it was when price had reached 73,000. That is trading!
My next step is to wait until price returns to the breakout zone and if it does I will look for another entry. If it does return to this zone and continues to the upside, any return to the upside is more probable to have a stronger move to the upside.
Trade Clearly!
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