FB on a 25% decline + expected movements + Strategy.
Today, we will look at FB renamed on meta.
Currently, we are on 142 days Draw-Down since the previous ATH and a decline of 25%. From here, we will analyze both bullish and bearish scenarios based on the context we can see now.
Bullish Scenario: The price bounces on the lower trendline of the corrective structure and breaks the inner descending trendline; on a lower timeframe, we look for a corrective structure (1H or 4HS chart), and a new local high after that is the confirmation towards the higher trendline of the corrective pattern
Bearish Scenario: The price breaks the lower trendline of the current corrective pattern, and we observe a bearish movement towards the major support zone at 250.00. That would mean a draw-down of 35%
The key aspect to developing successful setups on any asset is trying to answer these questions:
* What is my current context? We can define it using trendlines, supports, and resistances + Draw-down characteristics, both in terms of time and decline
*Can I find similar situations in the past? Here, it's important to study assets that have a good amount of historical data. We want to find at least 2 situations similar to the current one
*Based on the similar situation I have found, can I see a consistent pattern across them that allows me to trade with a risk to reward ratio equal or higher to 2?
If the answer is YES, we have to define the expected pattern and wait until the market makes the movement we are expecting.
Thanks for reading!
Currently, we are on 142 days Draw-Down since the previous ATH and a decline of 25%. From here, we will analyze both bullish and bearish scenarios based on the context we can see now.
Bullish Scenario: The price bounces on the lower trendline of the corrective structure and breaks the inner descending trendline; on a lower timeframe, we look for a corrective structure (1H or 4HS chart), and a new local high after that is the confirmation towards the higher trendline of the corrective pattern
Bearish Scenario: The price breaks the lower trendline of the current corrective pattern, and we observe a bearish movement towards the major support zone at 250.00. That would mean a draw-down of 35%
The key aspect to developing successful setups on any asset is trying to answer these questions:
* What is my current context? We can define it using trendlines, supports, and resistances + Draw-down characteristics, both in terms of time and decline
*Can I find similar situations in the past? Here, it's important to study assets that have a good amount of historical data. We want to find at least 2 situations similar to the current one
*Based on the similar situation I have found, can I see a consistent pattern across them that allows me to trade with a risk to reward ratio equal or higher to 2?
If the answer is YES, we have to define the expected pattern and wait until the market makes the movement we are expecting.
Thanks for reading!
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