Steemit Crypto Academy Season 3 Week 3:-Break Retest Break (BRB) Strategy to Trade Continuation

vhenom (63)in SteemitCryptoAcademy • 3 years ago (edited)

INTRODUCTION

Hello guys it's the 3rd week of the steemit crypto academy. This season is going on well and swift. This week assignment is the continuation of last week course. This week course is about Break Retest Break Strategy (BRB). In this assignment I will be explaining how to use this strategy to trade continuous trend in the market structure.

What do you understand about the Concept of Break Retest Break Strategy?

This is a basic strategy for trading. We believe that we can only buy and sell at support and resistance respectively but a breakout can occure that's where we use this particular strategy (BRB). It doesn't matter if our resistance is very high or very low as we can use the Break Retest Break strategy to trade.

We don't have to worry about how we are going to use this strategy. It can be used for trading at support and resistance. Because the market structure has different trend. When it's a downward trend , we use the support level Break Retest Break strategy but when it's an uptrend, we use the resistance level Break Retest Break strategy.
Let me explain how to go about it and I will also show reference with a chart.

Break Retest Break at resistance level

At this level the market structure is in an uptrend so the price will break resistance and it will create s higher high swing point then Retest the resistance it just broke creating a support level then it will break the resistance above it. The trend continues like that until the trend reverse. That how to use Break Retest Break strategy at the resistance level.

If the market price has created a swing high point and it Retest previous resistance if it fail to break the resistance above it then the market trends might reverse and it will break the support lower.
Below is an image illustrating the BRB at resistance level.

Break Retest Break at support level

At this level the market structure is in a downtrend that is price is falling. The price will break support and create a lower swing point then it will Retest the high support it just broke then will break the lower support. The strategy is just simple for every support it breaks it create a swing point (lower low) then Retest support before breaking another support (lower low). The trend continues until it fails to break lower support level and the trend will reverse.
Below is an image illustrating BRB at support level.

Mark important levels on Crypto Charts to trade BRB strategy. Do it for Both Buy and Sell Scenario.

Here its just like experimenting all point stated above. I will mark all the level on a btcusd chart using my metatrader4 app. But before that let me explain those points in just few words

Resistance point: this is a high point in the market. Basically price either reverse or breakout at this point. When a new candle stick in an uptrend become same price with a previous high candlestick.
Support point: this is a lower point in the market trend. Price will rebonce or breakout when it gets to a support level. When a new candlestick in a downtrend becomes same price with a previous low candlestick.
Swing points: This are the higher high / lower low point in the market structure. The point at which the market reverse it's trend.
Retest points: this are the higher low and lower high point in the market structure. The point from which the market bounce back to its normal trend.
Take profit points: this is only applicable when we are trading. This is the point that we set to close our trade at s profit if the market trend goes as we predicted
Stoploss point. This is the point they we set to stop further loss when we open s trade. The take profit and stoploss point are also known as Exit Point
Entry points: As the name implies this is a point we enter the market. We either buy or sell. No all apps can take both entry positions or I will say it depends on the type of trade. For spot trader, they only buy to enter the market and sell to exit the market. But for future traders the can use the buy and sell to enter the market.
Breakout point: this are the point where the market trends breaks from a support or a resistance points.

I think those are all the points needed for this strategy. Bellow is an image illustrating the above stated point/ positions

Explain Trade Entry and Exit Criteria for both Buy and Sell Positions on any Crypto Asset using any time frame of your choice

I will be explaining trade entry and exit point for both buy and sell order. Using my metatrader4 app I can place a buy and sell order.

Entry Criteria for buy positions
To place a buy order using the BRB strategy you have to consider the following steps
Firstly the market must be in an up trend before we consider buying then you will mark our resistance point and wait for the price to cross it. When the price cross the resistance point you marked, you also marked a swing point then wait for the price to retest that resistance point you marked. When the price retested the resistance level, you also wait until It breaks the swing high point after it crossed it you place your buy order. That the signal for the buy order when using BRB strategy.
Bellow is an image illustrating the above stated steps.

Entry Criteria for a Sell Order
To place a sell order, you first considered the market trend before knowing which trend am trading. To sell the price must be approaching support level after considering this, you mark your support level then wait patiently for price to cross once the price crossed the support level and created a swing high, you wait for it to retest the support level and bounce back to the normal trend. Now the last step before you place your buy order you wait for the price to cross the swing high. After cross it we can then place a sell order.

Exit Criteria for Buy Order
Firstly after placing a buy or a sell order, we should create a stoploss and a takeprofit to avoid loss and close our positions before the trend closes. Because sometimes our signals might be wrong and we will make more loss if we do set a stop loss.

Now after we have placed a buy order, we will set our take profit and stoploss in the ratio 1:1 meaning for every 5$ profit there will be a 5$ risk on it. We will place our stoploss at the resistance where the price retested and bounce back. The our take profit will be calculated by pipes so the conditions for the ratio 1:1 will be met. That will be our exit point.
Bellow is a screenshot illustrating what I just said

Exit Criteria for Sell Order
After placing our sell order the next thing is to create a stoploss and a takeprofit in the order of 1:1. Some expert can sell 2:6, 3:8. And other risk to reward ratio. But for beginners it's advisable to use 1:1. We set our stop loss at the support level then calculate the take profit by pipes so the conditions for our risk- reward ratio will be met. That will be our take profit/ exit positions.
Bellow is a screenshot illustrating what I just said

4 - Place 2 demo trades on crypto assets using BRB Strategy. You can use lower timeframe for these demo trades.

I will be using the btcusd and ethusd chart for this part of the lesson. I will place two trade for buy order and sell order on Ethusd and btcusd chart.
For the buy order.

Firstly I monitored the market trend, when I noticed the price is approaching resistance I marked the resistance point.
Then I wait patiently for the price to cross the resistance point. After it has crossed the resistance point I them aim to mark a swing high point.
When the price reversed I marked my swing high point then I still observe the market.
The market retested the resistance level and bounced back. This is a good sign for me the I wait until it crossed my swing point
After it has crossed the swing point I placed my buy order.
After placing the buy I set my stop loss and take profit then wait for the trade to execute it self.
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For the sell order

Firstly I monitored the market trend, when I noticed the price is approaching support, I marked the support point.
Then I wait patiently for the price to cross the support level. After it has crossed the support level I them aim to mark a swing low point.
When the price reversed I marked my swing low point then I still observe the market.
The market retested the support level and bounced back. This is a good sign for me the I wait until it crossed my swing point
After it has crossed the swing point I placed my sell order.
After placing the sell order I set my stop loss and take profit then wait for the trade to execute.)

![IMG-20210712-WA0077.jpg](

CONCLUSION

The BRB strategy helps in trading continuous trend in the market structure.
It is used to trade both resistance and support levels. It shows us that we can still trade after resistance and support. Because most people thinks that resistance and support are the exit and entry point respectively but the BRB strategy makes me believe that we can trade with breakout.
While trading with the BRB strategy we have to consider all the points stated in this lecture.

CC @cryptokraze

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