This is the second installment of my trade journal, which includes completed trades on large-cap altcoins XRP and Ether. I’ve found that crypto investors are always curious about each other’s positions and typically these conversations take place in private DMs and telegram chats. The goal here is to provide some transparency on my trading routine and I hope traders find the process of observing each step of every trade educational. T
rading position sizes have been redacted, but they are always calculated based on a 1% portfolio loss using the stop loss and entry as a guide.Entry: .00002769 Satoshis (sats)Targets: I set my first target at .00002933 (sats) which is the first resistance I have identified for a 6% gain. My second target is at .00003085 (sats) which is near the second resistance at .00003297 (sats) and provides an 11.4% gain. I’ve set this target near the main resistance on the chart as this is an area where the price previously had a major breakdown. My sell order is below it just in case shorts front-run the line.
In total, this would be a 19% gain on my XRP/BTC position.In case the trade goes belly up I’ve placed a stop loss at .00002690 (sats) which equates to a -2.85% loss.It’s also good practice to consider the risk to reward ratio when making an investment, especially with altcoins given Bitcoin’s current dominance rate. The risk to reward ratio measures the difference between a trade’s entry point all the way to the stop-loss and sell or take-profit order. Comparing these two provides the ratio of profit to loss, or reward to risk. For this trade, it is roughly 2.08 at the first target, 4 at the second target and 6.7 at the final target.9/19/19General analysis XRP has been in a sustained downtrend for months, which I have been publicly sharing on Twitter and watching intently. The price has flipped multiple levels of support into resistance on the way down and the first sign of a potential bottom for me is a bullish divergence.
One finally appeared on both the daily and weekly timeframe (charts pictured below) around Sept. 6th.XRP/BTC Weekly Chart. Source: TradingViewEntry ideas I identified .00002769 (sats) as a fresh area of resistance that was created on the XRP drop. My plan was to wait until this line flipped from resistance to support before entering a trade, as I prefer trading on confirmations. XRP price broke through this area violently on Sept. 17 and continued up for another day before violently falling when Bitcoin sharply corrected. At this point, my alarm went off again at .00002769 (sats) on the support retest, but the price dumped through with force as Bitcoin continued to correct. XRP bounced back very quickly, leaving a long wick below. At this point, I was confident to enter a trade and took the breakout back above resistance on the following candle. There were three short term targets that I was interested in, which are listed above.
The first two were areas of resistance that were left behind when the price dumped. The third was slightly below the key resistance on the chart (top black line). I chose to set my sell orders slightly below this point because shorts often front-run key areas and I wanted to be sure that my orders fill.XRP/BTC Daily Chart.
How it worked outThe first target was hit quickly and I chose not to close the trade in order to see if the area held as support, which it did. I set a limit sell order at the second target (.00003085 sats) for half of my position, which fired not long after. XRP price nearly reached my final target, but ended up creating a bearish SFP above the previous swing high, which was a signal for me to close and reevaluate. I took profit on the remainder of my position at the previous swing high on the way back down to .00003208 (sats) rather than wait to see if my final target would hit. XRP/BTC Daily Chart. Source: TradingViewIn addition, I noticed a clear bearish divergence forming on the daily chart, as well as hidden bearish divergence on the weekly. Both signaled to me that it was time to get out while I was ahead and in profit. At the time, Bitcoin also looked quite bullish to me and my assumption was that a large Bitcoin price move could negatively affect the XRP/BTC pair. XRP/BTC Daily Chart.
The first sell order elicited an 11.4% profit and my second order secured a 15.8% profit. Total profit for the position averaged out at 13.6%. Entry: I hope to catch the breakout from bullish consolidation at .02065 (sats)Target: I’ve set my target at .022229 (sats) which is the previous swing high for a profit of 7.6%.