Looking at Trading a possible easy Bull flag pattern on Bitcoin (BTC/USD) today.
In the Daily time frame, we are still in that large ascending channel and we have had a nice bounce off of the bottom of the channel suggesting a move higher.
In the 4-hour chart, there is a bull flag forming. We have an impulsive move up with four bullish candles taking out previous resistance. Accompanying this impulsive move upwards is large bullish volume. These are the two things we want to see when looking for a flag pole.
We then see the price cooling off and taking a breather while it slowly moves downwards which creates the look of the actual flag itself. We have three taps at the top of the flag and four at the bottom. We can see that the price is bouncing off of these two points of support and resistance. Accompanying this cool-off, consolidating period is low volume, which suggests that the price is just taking a breather and the bulls are getting ready for another leg up.
What I would want to see to confirm an entry for this bull flag is the following.
I have highlighted a yellow zone at the top of the flag pole. I want to see price impulsively break this yellow zone and close above it. I also want to see large bullish volume to accompany this impulsive move up. Then, If we see that, I want to see the price retrace back into the flag pole zone before opening up a long position targeting the middle of the daily channel. The price point around this target would be the 25500 level.
This risk to reward (depending on where you place your stop loss) could be a nice 1 / 3 or 1 / 4.
The price always respects the middle of a channel. This is why my target is the middle of the daily channel.
But for me to enter a long position in (BTC/USD), I need all those entry requirements to be met.
So let us see if we get that impulsive break, large volume, and a retrace. If we do, the vortex trader is going long on Bitcoin.
As most of you know, I am a crypto investor. This means I’m a crypto bull. But with regards to trading, I only trade the setups that the charts provide. One cannot jump into a position blindly without having a set of rules and reasons for entering and exiting. If you do this, it’s the same as gambling. But if you follow your rules and only enter positions systematically, then you are following a system that has been proven to be profitable and consistent and in the long run, according to your backtesting, this will yield you positive results.
On that note, I bid you all a great day.
Let’s go Bitcoin!
The Vortex Trader.
Prediction Analysis Overview Table
|Analysis Overview Information||Prediction Analysis information|
|On what market is this position based (Forex, Stocks, Crypto, Indices, or Commodities)?||Crypto|
|What is the trading position identifier (Name and/or Symbol)?||BTC/USD|
|Is this a Short or Long Position?||Long|
|Would this be considered a Short Term, Medium Term, or Long Term trade?||Medium Term|
|As a Short, Medium, or Long Term trade, which best describes the position (Scalping, Day Trading, Swing Trading, or Position Trading)?||Swing Trading|
|What Time Frame chart is the position based on (1-Minute, 5-Minute, 15-Minute, 30-Minute, 1-Hour, 4-Hour, Daily, or Weekly chart)?||4-Hour|
|Depending on the asset, how much do you expect it to move in price or percentage?||From Entry to Target – 4.4%|
|What ratio of risk to reward is this trade/position? Choose your appropriate target(s)||Approximately 3 to 1 Target 2 N/A Target 3 N/A|
|What were the technical analysis tools used? Tick the appropriate boxes;||☒ Chart Patterns ☐ Indicators ☐ Price Action ☐ Support & Resistance ☐ Trendlines|
|From the technical analysis tools and indicators provided, tick the appropriate boxes for the tools and indicators used to analyze the position;||☐ Ascending Triangle, ☐ Bollinger Bands, ☐ Candlesticks, ☐ Channel, ☐ Cup & Handle, ☐ Descending Triangle, ☐ Double Bottom, ☐ Double Top, ☐ EMA, ☐ Fibonacci Retracement, ☒ Flag, ☐ Head & Shoulders, ☐ MA, ☐ MACD, ☐ Order Blocks, ☐ Pennant, ☐ Rounding Top Or Bottom, ☐ RSI, ☐ Symmetrical Triangle, ☒ Volume, ☐ Wedge|
Trading Prediction Success Probability Score
FSP ranks the probability of this trade a 7/10
- Wait for Price to break and close above the yellow flag pole zone
- Then wait for a retrace back into this zone.
- High volume with break
- Low volume with retrace
WATCH OUT FOR
- Wicks into the flag pole zone.
- High bearish volume on retraces
Disclaimer: The FSP probability score is derived from adding and subtracting the positive and negative aspects of the position and is not a definitive sign of how the trade will play out. FSP is not in any way a financial advisor