Breakout strategy, with a real example: $ETH
$ETH tested support at $2,406 today — the low of the last 7 days. In the last 24 hours, the price hit that level ($2,406.11) and is now trying to recover. This is the kind of scenario where a breakout strategy comes into play.
How confirmation works:
1. A breakout isn’t a wick. A 4-hour candle that CLOSES beyond the level counts; a wick that breaks through and comes back doesn’t.
2. If it closes below $2,406, the break is confirmed. But beware of the classic trap: a false breakout. The price breaks through, everyone sells, and the next candle recovers the level. Anyone who entered on the wick gets trapped.
3. Where would a trader place the stop? Educational example: someone trading the break would place the stop on the other side of the broken level (above $2,406, with some room for noise) — and risk only a small fraction of their account. An example, not a recommendation.
The RSI-14 at 22.9 indicates oversold conditions — but oversold isn’t a buy signal. Confirmation matters more.
No confirmation, no entry. 📊
#Ethereum #CriptoVisao
$ETH tested support at $2,406 today — the low of the last 7 days. In the last 24 hours, the price hit that level ($2,406.11) and is now trying to recover. This is the kind of scenario where a breakout strategy comes into play.
How confirmation works:
1. A breakout isn’t a wick. A 4-hour candle that CLOSES beyond the level counts; a wick that breaks through and comes back doesn’t.
2. If it closes below $2,406, the break is confirmed. But beware of the classic trap: a false breakout. The price breaks through, everyone sells, and the next candle recovers the level. Anyone who entered on the wick gets trapped.
3. Where would a trader place the stop? Educational example: someone trading the break would place the stop on the other side of the broken level (above $2,406, with some room for noise) — and risk only a small fraction of their account. An example, not a recommendation.
The RSI-14 at 22.9 indicates oversold conditions — but oversold isn’t a buy signal. Confirmation matters more.
No confirmation, no entry. 📊
#Ethereum #CriptoVisao