Fresh swing trade strategy on Solana

On the daily timeframe, SOL has established equal highs and lows, indicating a large range, while Bitcoin has formed lower lows and lower highs, creating a classic bull flag pattern. 

Given the lack of a major positive catalyst, we must respect Bitcoin's structure and apply similar rules to Solana, projecting potential downside. This approach will allow for a more calculated swing trade on SOL, considering the risk-to-reward (RR) ratio.

Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.

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The playbook 

Here's to take the trade.

Setup 1: Scale-in strategy

Objective: To scale into a SOL position by splitting the risk across key levels: $130, $120, and $110. 

Hypothesis 

The idea here is to manage risk by entering at multiple levels as the price draws down, leveraging the potential for a bullish rebound. This strategy acknowledges the possibility of a significant drawdown, especially considering the wick that formed at $110 on August 5.

The play

• Initial entry: Start with a smaller position at $130.
• Scale-in: Add to the position at $120 and then again at $110.
• Risk consideration: Given the bullish conviction, if the price moves closer to $110, consider increasing the margin or utilising more leverage to gain more exposure.
• Stop loss: A 50% drawdown would place the liquidation level around $66-$65, which should be acceptable if you're taking a 2x leveraged position. However, expect substantial drawdown risk, especially at $110. 

Leverage & margin 

Consider using 2x leverage initially. As the price drops and you...