If the price bounces back up at the bottom of the triangle (yellow circle) I'll put a buy-stop at the top pink horizontal line. If the price consolidates more (like the orange line). I'll move the buy-stop to be above the last swing high (like the lower pink line).
the inital stop will be under the last swing low, so potentially in the yellow circle if it bounces there.
I'll be moving a stop up under the daily swing lows and if the price moves substantially in one day i'll look at the 4h and maybe 1h to manage the stop. I do this as, often after they have moved quickly up, usually just a pump, they can collapse again.
What analysis i'm doing:
- The price has come to a bit of a halt around a nice rounded number (0.001 - see the red line).
- The market has then tried to start making a move upwards (shown by the left-hand pink arrow). So at this point we can consider the direction marginally more .
- finally we have a consolidation (within the two blue ). This is showing that the market is undecided, but once either side of the market (the bulls or bears) overtakes the other we could see a pop in the price in that direction.
- Usually a consolidation will continue in the current direction and if we force the price to break above previous resistance (the last high) before we buy we are increasing our chance that the market has the pressure needed to take us further.
- Adding to this the moving averages ( - check the indicators for these) have crossed, are mostly green and the price is beginning to hold above them.
What would invalidate this trade:
if the price breaks below the last low (i.e. breaking the triangle) I won't create a buy-stop as it will make the consolidation invalid.
Could be interesting...good luck if you're trading ETH classic!