This is how Alts have played out the last few weeks to my perspective and currently.
1. Initial drive up (get people bullish) 2. Sell off into HTF Demand (Sentiment flips bearish) 3. Price gets back above with trapped funds in lock.
Examples attached.
2/4
When you see price move up early in the week and sentiment favoring a certain side its good to zoom out and mark out your untested HTF Demands as we might be engineering liquidity.
Postions build up, market participants chopped within a short term accumulation.
Notes on the chart:
2. Distribution into breakout traders
Breakout traders expecting another leg up are lured into filling the remaining shorts Market Makers might have. Market participants provide liquidity to the market.
Wanted to go over a key topic I find important and that’s knowing when to cut your loses early on a systematic approach
Hard stops are in place to limit your loses and resolute around key levels
1.Long Example
2.Short Example
3.Conclusion
1. Long Example
When looking for longs it’s crucial to find formed demand levels/breakers above your key levels. Stop loss placements are around previous formed swing points.
Closes below key levels are signs of weakness and make for a manual exit.
Notes on the chart
3. Short Example
For shorts you want your key levels above your formed supply/resistance levels. Stop loss placements above previous swing points.