In today's bitcoin chart analysis I will review our new Long position on the bitcoin crypto.
- Now that the trade is live, how do we manage it?
- What trading tools shall we use?
So YES, Monday morning, at 8am UK time, we had a clear break through our entry price of $10550.
The bitcoin price has traded as high as $10800 and it is currently hovering around $10700.
Our level has not been tested, the lowest bitcoin price since the break has been $10660.
If the price continues to move higher, I will look for an opportunity to raise my stop loss.
Raising our stop loss now would be a premature move because the current Bitcoin ATR for the last 14 days is $650.
For my followers that are new to bitcoin price analysis , I would like to take a moment and explain that ATR stands for Average True Range. It is a trading tool that allows investors to measure market volatility for a set period.
In this particular situation, during the last 14 days, the bitcoin price has been making daily moves of around $650.
Therefore if I was to raise my stop loss immediately, there would be a very high chance that I would be stopped out of this trade
at break even. Yes I would not have lost any money on that trade... but I would not be making any either.
On top of that, based on the current momentum, there is the high probability that the price carries on moving upwards.
So I definitely want of piece of that action.
This is why it is not good to move stop losses too early and why it is preferable to leave enough "breathing room" to accommodate daily market fluctuations.
Personally I will consider moving my stop loss only when the price is at least 1 full ATR away from my entry price AND when a new support ( or significant higher low ) has been established above my entry point.
Until then, I am happy to leave my settings as they are and I will simply monitor the daily bitcoin price moves.
Right now my BTCUSD trade is in the green and that's already a good thing.
All Bitcoin chart analysis and altcoin trading strategies that I post on this site and on my bitcoin trading youtube channel are only the expression of my personal views on the cryptocurrency market. All contents are for informational purpose only and should not be considered as financial advise because I am not a financial adviser