No, its not the type of bread you're thinking of! :)
BREAD versus Bitcoin has been in decline and appears to be forming a rounded bottom and showing signs of a potential reversal to the upside.
If you look at the chart on the 4 hour, price has recently made a HIGHER HIGH that forms a right shoulder to an inverted head and shoulders pattern.
While I do not normally trade H&S patterns on their own, if this pattern coincides with a break out pattern then the probability of a successful trade is higher. In a volatile market, break out patterns can be to very profitable. In particular during a bull run where profit targets are often smashed straight through and smaller breakout patterns occur on the smaller time frame to increase position size.
Reasons why I will be enter a long position using a STOP-LIMIT order:
- Breakout triangle forming at base of consolidation zone
- Tight squeeze with previous failed breakout attempts to the upside
- Inverted head and shoulders pattern
- High return on investment (44%) with 4:1 risk/reward
With a 4:1 risk/reward ratio, you can be a very profitable trader that only wins 50% of trades! If the trade goes in the opposite direction, I will take a small lose and look for the next opportunity.
You can follow this trade at: https://goo.gl/BzQX2F
If you like to see more Trade Analysis posts, please let me know.
Disclaimer: This is only my opinion, make of it what you wish. It is not financial advice.