Trading Plan for the breakout on ARKK - Statistical Approach
Today, we will explain our trading idea on ARKK.
What are we observing right now? The price is inside a descending Wedge pattern (106 days correction), and we are observing possible signs of a breakout happening soon. We can see a clear support zone that the price could not break, so we expect a bullish movement towards the next resistance zone at least.
How are we planning to trade this movement? We are waiting for 4 daily candlesticks, at least on the edge of the wedge pattern. (Currently 3) After that, we will set pending orders above the structure, and we will wait for a new local high for an execution. The optimal scenario would be to see a retest of the white curve.
Ok, but why did we chose 4 daily candlesticks and not 7 or 9? Good question, smart guy. Let's take a look at the next chart
Here we have defined ALL the corrective patterns that were ABC clear structures with a duration higher than 50 days at All-time highs level. The conclusion is that after we have the first breakout attempt, we observe a 4 to 8 days correction (daily candlesticks on the edge of the broken pattern) and a new local high as an execution level has been working really well to provide Great setups with huge risk rewards ratio. OF COURSE, the setup failed several times, this is a statistical approach to taking setups, and we should be open to a new fail here. However, our approach is taking good bets in terms of Win rate and R/R ratio. (this means taking several setups to start observing an edge)
The risk we are planning to take on this setup is 1% of our setup, move our stop loss to Break-Even on the next resistance zone, and we will look for a 1 : 10 R/R
Thanks for reading!
What are we observing right now? The price is inside a descending Wedge pattern (106 days correction), and we are observing possible signs of a breakout happening soon. We can see a clear support zone that the price could not break, so we expect a bullish movement towards the next resistance zone at least.
How are we planning to trade this movement? We are waiting for 4 daily candlesticks, at least on the edge of the wedge pattern. (Currently 3) After that, we will set pending orders above the structure, and we will wait for a new local high for an execution. The optimal scenario would be to see a retest of the white curve.
Ok, but why did we chose 4 daily candlesticks and not 7 or 9? Good question, smart guy. Let's take a look at the next chart
Here we have defined ALL the corrective patterns that were ABC clear structures with a duration higher than 50 days at All-time highs level. The conclusion is that after we have the first breakout attempt, we observe a 4 to 8 days correction (daily candlesticks on the edge of the broken pattern) and a new local high as an execution level has been working really well to provide Great setups with huge risk rewards ratio. OF COURSE, the setup failed several times, this is a statistical approach to taking setups, and we should be open to a new fail here. However, our approach is taking good bets in terms of Win rate and R/R ratio. (this means taking several setups to start observing an edge)
The risk we are planning to take on this setup is 1% of our setup, move our stop loss to Break-Even on the next resistance zone, and we will look for a 1 : 10 R/R
Thanks for reading!
Dagangan aktif
After looking at previous scenarios, we decided to open a setup with a risk-reward ratio of 2 (Break-Even is the horizontal yellow line)
Risk: 1% of our Capital
Nota
We have moved our stop loss to the entry-level. Currently risk-free.
Penafian
Maklumat dan penerbitan adalah tidak bertujuan, dan tidak membentuk, nasihat atau cadangan kewangan, pelaburan, dagangan atau jenis lain yang diberikan atau disahkan oleh TradingView. Baca lebih dalam Terma Penggunaan.
Penafian
Maklumat dan penerbitan adalah tidak bertujuan, dan tidak membentuk, nasihat atau cadangan kewangan, pelaburan, dagangan atau jenis lain yang diberikan atau disahkan oleh TradingView. Baca lebih dalam Terma Penggunaan.