Steemit Crypto Academy | Course By @ stream4u - Technical: Reverse Strategy | Crypto Prices & Market Source: Review Of COINGECKO.

5개월 전

Hey what's up my friends so in today's task it's all about reversal trading

Before starting the task, I want to apologize to Professor @stream4u because by mistake, this task went off the tag of Professor @fendit.

okay so first and foremost what is reversal so as a reversal trader you are in essence a counter trend trader someone who's trading against a trend trading against current momentum so for example let's say the market is in an uptrend making a series of higher highs higher lows in this uptrend so as a reversal trader what you are doing is to sell into that up trend or for example ifthe market is in the downtrend then as a reversal trader you're looking to buy into their downtrend okay so the first thing i want to share with you is how not be a reversal trader so the first thing to bear in mind is that yes as a reversal trader you're trading against a trend trading against the momentum but it doesn't mean that you should try to catch a falling knife so let's say if the market is dropping day after day like a rock

254CD609-206D-48E5-84A1-B8B267B41D6A.jpeg

you don't want to just blindly enter a trade to click buy just because I'm a reversal trader i buy low and sell high that's foolish right because if you are buying into lows there is no logical place for you to set your stop loss there is no there's no single to that to that downtrend which there's no signs right that that downtrend could be ending soon so as a reversal trader you want to be smart about it and there are few things. I want you to pay attention to so number one is this reference poin yes you are a revesal trader but you must have reference on point on your chart what is reference point so let's say market is let's say in an uptrend right breaking up to new hight single day you breaking out higher and then one fine there is a strong sell off strong pullback in the market than boom the market don't just had sharp sell off over the next two days so if you imagine this right market is in an uptrend followed by a strong pullback are strong sell if you look left of the chat you will now have that swing high

969E7127-979E-48ED-8BD6-C9ADA79A0253.jpeg

that swing high is a reference point on your chart ok so that the first things you need as a reversal trader you want to identify a reference on your chart I'll explain why sortly second thing is once you have the reference point then what you want is for the market to re test that reference point so let's say now the market has after the sell of it started to climb its way back up higher in the uptrend so it's it you know hit higher up over the next few days and then you the reference point the next thing that you're looking is for the price retest that reference and to get strongly

E9674EF6-9709-4225-BEEE-88F100925643.jpeg

so you retest the reference and the it couldn't break out higher but it does is it reverse and lower for the day so what this tells you is the wire aur trains to break up the reference point of the swing higher but it failed to do so there is no follow through there is no more momentum no more buying using the price of higher what happened next is that you know short sellers came to the market uh buyers took profits and the market quickly reversed back and closed lower for the day so this is what i call in essence a false the price tried to break out higher and that is why it is called a breakout so once you have identified a false breakout that's the second thing to look for a false breakout at the reference point the third think is this once you have that false breakout you can now set a proper stop loss compared to earlier where you don't have a refernce point you
don't have a false breakout there is no logical level on your chart to set your stop loos but now that you have your reference point now that you have a breakout you can simply set your stop loss above the highs of the false breakout candle you know maybe 180 above it

62839D39-6A94-43F3-9BF0-9AA2C381C62B.jpeg

so let's say the false breakout the heist is at hundred dollars you can set your stop loss at 105 give it some buffer give and take right if you want to define objectively how much buffer to use the atr indicator for the indicator it's called it stands for average true range measures volatility of the market and they just add that volatility right to the high of the candle okay so next thing once you have your stop loss in place which is above the highs of the reference point above the highs of the false breakout the next thing is that if the market moves in your favor what now where do you take so remember as a reversal trader you're not trying to write the entire new trend in the opposite direction because more most often right what happens is that you get a pullback and then the trend continues and it continues to hit higher so as a reversal trader you want to be smarter about it you don't want to be Greedy so my suggestion is to be Conservative right with your take profit level so where you want to take profit is possibly at the nearest swing low this is a area on your chart where potential buying pressure could come in and push the price higher so if you are selling at the reference high

7F11988B-63C6-485C-906F-1F9A459FBD34.jpeg

you got a good entry don't be greedy with your take profit level right be conservative you can target at the nearest swing low and just capture one swing in the trade and that's it and that's really the the goal of a reversal trader just to just capture that one swing in the market right and just let it be of course there are some of you who wants to be more aggressive in the sense that you want to try to write a new the new trend right when the market reverse and maybe you could be right so again be smart about it don't use your full position and try to write the trend what you want to do is that instead of maybe using a full position and pray that you know you catch the reversal what you can do is to take 50 off your position off the table so maybe 50 at the nearest swing low take some profits off the table and if the remaining 50 of your position on right to see whether the market does revese completey and move into your intended direction so even if it doesn't right at least you book some profits and you could still end up with a small winner on the trade overall so be smart about it don't try to you know thik that you know you are going to catch the reversal right it's the end of the trend because trust me more often than not it's a pullback and then the trend continues higher so be smart when it comes to taking profit so let's do a quick recap to what we have just this discussed today number one as a reversal trader don't try to catch a falling knife don't try to sell into parabolic move instead what you want to look for is number number one a reference point on the chart number two look for a false breakout at the reference point number three you can set your stop loss right just above or below that reference point and number four be Conservative with your targets right because the trend right more often that not will just continue in its intended direction so don't be too greedy trying to you know to write the entire new trend thing is the reversal because what's likely to happen is that the market it uh it breaks out of the highs do a pullback and then continue breaking out the new highs and continue its uptrend so bear this in mind so with that said

Thankyou
@fendit
i wish you good luck and good trading i will talk to you soon

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
STEEMKR.COM IS SPONSORED BY
ADVERTISEMENT
Sort Order:  trending

Hi @toluwalase

Thank you for joining The Steemit Crypto Academy Courses and participated in the Homework Task.

Review Visit Level
Task Remark
Comment
Guidance, Feedback, Suggestions
Grade
Verification (Done, Hold)
First
Completed
First, I would like to inform you that, as you mentioned by mistake, this task went off the tag of a different Professor, still this task is submitted out of schedule. It seems you only provide information on Reverse Strategy, but you could also try to highlight the Reverse Strategy in a graph. The rest of all topics are not attempted.
Try to be more informative and provide all possible details.
Not Applicable as Task Submitted out of schedule, Homework posts should be submitted no later than 11.59pm UTC, on Saturday, May 22nd 2021
Done

Your Homework Task verification has been done by @Stream4u, hope you have enjoyed and learned something new.

Thank You.
@stream4u
Crypto Professors : Steemit Crypto Academy
#affable