What's up Guys and Gals, this is a short sale idea for Ethereum
based on 3 prior sharp sell-offs over the last few months. The idea for this trade is based on the market meeting resistance at the 38.2% Fibonacci level (the entry on our potential short trade), and re-testing the 61.8% Fibonacci level (which is our profit target AND potential entry into a long trade). The time-frame to be in this short trade is roughly two to three WEEKS. This is about how long each prior sell-off in the last 3 months took to make their runs, with plenty of opportunities to get out in between. The risk-reward profile on this trade varies depending on where you place your stop, but the example I've provided is a good middle-of-the-road stop (a reasonable 18% loss limit) with an attractive R:R of 1:2. As long as you keep your loss limit under 30%, giving your trade some additional room to breathe is not a bad idea. The benefit of this is insulating your position against the potential effects of breaking news events, while the disadvantage is more risk. Approximated trendlines
and the top of the downward channel
roughly coincide with the 61.8% level, which, to me, adds to the support strength of the price level there as a buying opportunity. With the Gann Fan
, price should theoretically fall faster once it retraces past the 3/1 line. The 3 represents units of movement vertically (price) over the 1 unit of movement horizontally (time), which I also see as added confirmation for this trade idea. If you are just not comfortable selling ETH, I would recommend that you wait for price to come down into the 61.8% level to enter into a long position. Don't forget to check out my long-term Elliott Wave
long trade idea for bitcoin
as well, you won't want to miss it! I'll post an update if North Korea immediately sends price flying and wrecks this trade. Happy Hunting Everyone.