ETHUSD Perspective And Levels: Higher Low Within Triangle Buy.

23 Jul 2017

ETHUSD Update: This market is still gyrating within the previously identified triangle with the only new information being the minor higher low established at 219. I am long at 228.61 with only 10% of my usual size.

Consolidations require a ton of patience and taking a position at the mid point of a consolidation is usually not the most opportune price, but I am making an exception here. The most recent price structure presents a minor higher low which is a sign of strength, and is usually followed by a higher high which should take this market into the next minor resistance zone of 230 to 242 (see previous reports linked to this evaluation). To compensate for the additional risk of buying in the middle of a triangle, I have taken a small position of 10% of my usual unit size. Great thing about these markets is the size is defined by you, not the exchange and this allows for more efficient risk management.

Even though there is a resistance zone just above my buy price, I expect it to be compromised because in strong markets resistances are more likely to break while supports tend to hold. I intend to add to my position IF price breaks 241, and again will only add another %15 to total 25% of my normal position size. Another price I will add is IF price retraces to 224, which is a .618 of the current minor upswing.

Since my size is small, I can afford wider stops and my first point of reference based on the new market structure is 207 so that is where I am out if this market falls apart. I intend to build a position for a swing trade, and I am expecting a move into the 250 to 280 resistance within the coming week so for that reason I am placing a target at 285 for now. Why 285? Because it offers slightly more than 2:1 RR, which is an acceptable starting point. I believe by the time this market gets near 285, I will have plenty of opportunity to adjust higher if necessary.

In summary, higher lows offer attractive buying opportunities because not only do they signal oncoming strength, but they offer a clear reference point to define risk. I have started a swing trade long with a fraction of my usual size to compensate for the additional risk taken this these levels.

Comments and questions welcome.