Crypto Academy Season 3: Week 3 || Homework post for Professor @crptokraze ||
Hi everyone and Assalam U Alaikum,
Q. 1. What do you understand about the Concept of Break Retest Break Strategy? Give Chart Examples from Crypto Assets.
Q. 2. Mark important levels on Crypto Charts to trade BRB strategy. Do it for Both Buy and Sell Scenario.
In this section of homework post, I will mark some levels where BRB strategy can be applied. I will show both Buy and Sell setups with the help of screenshots.
Buy setup.
Sell setup.
Q. 3. Explain Trade Entry and Exit Criteria for both Buy and Sell Positions on any Crypto Asset using any time frame of your choice.
Buy Trade Entry Criteria.
Followings are some points that are highly considerable for entering a Buy trade using BRB strategy.
First of all, a resistance level should be broken by an impulsive move to the upwards and there should be a pullback or correction in progress after making a swing high.
This correction is approaching the new support level that was the previous resistance level.
New support level should be retested successfully and the market should resume the uptrend with another impulsive move.
Previous swing high should also be broken by the market price and it should move upwards.
When previous swing high is broken successfully, then buy trade should be entered.
Sell Trade Entry Criteria.
There should be an impulsive move downwards and it should break a strong support level which should have been marked on the chart. Then the market should make a swing low.
After the establishment of Swing low, market should make a pullback and it should retest the new Resistance level which was previous Support level.
On the successful retest of the new resistance level, market should rebound and resume the downtrend with another impulsive move.
Then the market should break the previous swing low and continue its move downwards.
Soon after the break of previous swing low, trader should enter the sell trade.
Buy Trade Exit Criteria.
First of all, stoploss should be placed immediately after the trade has been entered because it is a kind of security to save the trader from big loss.
If the market goes opposite to the setup, it means that it was a fake breakout and the trader should exit the market.
Stoploss should be placed just below the old resistance level that has been broken and now it is new support level.
Takeprofit should also be placed according to the trader's strategy. At least it should be 1:1 ratio, it means takeprofit should be equal to stoploss. It can also be 1:2 means double than Stoploss. But as recommended by the Respected Professor, it should be 1:1.
When any of these levels are hit, the trade will automatically be closed.
Sell Trade Exit Criteria.
Stoploss is very important for every trade and it should be placed immediately after the trade is entered to safeguard the capital of trader.
Stoploss should be placed just above the old support level and new resistance level.
If the market goes against the analysis of the trader and it breaks the old support level and new resistance level, then it should be considered as a fake breakout and trader should exit the market.
Takeprofit should be at least set at the ratio of 1:1. This ratio can be increased upto 1:2 but it is not recommended too early.
When any of these levels of stoploss and takeprofit will be hit by the market, the trade will automatically be closed.
Q. 5. Place 2 demo trades on crypto assets using BRB Strategy. You can use lower timeframe for these demo trades.
In this section, I will place 2 orders on a demo account using BRB strategy. Below is a buy trade setup found on BTCUSD in M15 time frame chart. The price has broken a resistance level and retested it successfully. Then it has broken previous swing high and I have taken this buy entry. I have mentioned the area with green circle where this trade has been taken. I have placed stoploss and takeprofit with the ratio of 1:1 which have been mentioned in the screenshot below.
Below is another buy entry at the break of previous swing high. I have circled in green the break of previous swing high and here I have entered s buy trade. It has been found on ETHUSD with M15 time frame. Takeprofit and Stoploss has been placed with the ratio of 1:1.
Conclusion.
Break Retest Break is yet another Price Action strategy and I have learned this strategy from this lecture. Price action has its own importance in trading world and to find out good entries at the right time, it is possible through BRB strategy.
I have found this BRB strategy very interesting one. It is a usual practice that on the retest of broken support or resistance level, if any price action signal is found, traders tend to enter the market immediately. But it is bit different as entry is taken at the break of previous swing high or low.
Thanks for such an informative lecture on this wonderful price action strategy and I will surely apply it on my trading.
Thanks in anticipation.