Finding those opportunities, well, that’s the easy part; that’s one of the perks of being a Cryptonary member.
The challenge, however, is that most people fail when it all comes down to taking profits. Yet, taking profits is critical in capital preservation and portfolio growth in the crypto market.
Today, we go back to the first principles of taking profits. And more importantly, we share clear profit-taking strategies on three of the most exciting trades in the market.
As an extra, we dissect a successful trade to help you understand how and why it worked out! Ready for profits? Let’s dive in!
TLDR 📃
- The general market will continue to rise. Some altcoins will surge, and some will not.
- Cashed out 20% gains from our RUNE symmetrical triangle breakout trade - there's a lesson on taking profits.
- We’re switching things up again with a shorting opportunity on GMX if it retests resistance.
- AAVE is in a year-long descending triangle, awaiting breakout, but ALGO provides a low-risk, high-reward upside.
Disclaimer: Not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results. “One Glance” by Cryptonary sometimes uses the R:R trading tool to help you quickly understand our analysis. They are not signals, and they are not financial advice. Any capital-related decision you make is your responsibility and yours only.
Why was the RUNE trade successful? 🤔
Last week, we presented a long opportunity on RUNE. We identified a symmetrical triangle that was about to break out. For context, please check the trade here and return to continue reading! Here’s an updated chart of RUNE 👇
As you can see, the trade was successful, and the token reached our expected target of $2. That’s a 20% gain in three days 😎
But why did it work? Let’s start by dissecting how we structured our trade:
1️⃣ The setup
The first thing that makes a trade good is its setup. Put simply, we must look for price patterns, key levels and indicators to compile multiple confluences that point in a single direction. In this instance, we spotted a symmetrical triangle that was about to break out. Here’s a clear visual of how it looks on the chart 👇
Then, we checked RUNE’s volumes by using the Volume indicator. As you can see, there was a steady increase in volumes and a slight bump after the breakout. Volumes are vital in breakouts because high volume provides the sustaining momentum that pushes the price to reach its target faster.
2️⃣ Risk management
After identifying the setup, we started looking for key levels. We wanted RUNE’s price to break out above $1.67 because it further confirmed that the upside could continue. So, that $1.67 level became our entry. Target? We used the previous high of $2, where sellers took over control, as a final take-profit level for our trade. As for the stop loss, it was up to your risk appetite. We decided to place it 6% under our entry level in case the price retraces under support. And there you have it… A simple yet effective trade with downside risk limited to 6% of our dedicated capital while offering us a potential gain of 20%. This RUNE trade perfectly exemplifies why taking profits is always important. We can see how the price started to retrace to the downside after reaching our target, which means waiting for higher levels would’ve resulted in lost gains. As target practice, you can start dissecting your trades to learn more from your wins and losses. This exercise will further develop your ability to master emotions and take profits when necessary.Up or down, it doesn’t matter - we’re still making money 💰
GMX just presented us with a short opportunity…
After losing the $37.50 - $40.50 region as support a few weeks back, GMX saw a lot of selling pressure. But the story recently changed when Bitcoin’s price started to pick itself back up. Now, the asset is headed back to that $37.50 - $40.50 region to retest it as resistance.
There are two ways this can go 👇
1️⃣ GMX reaches the $37.50 - $40.50 region and fails to break resistance. As a result, more selling will commence.
2️⃣ GMX reaches the $37.50 - $40.50 region and successfully closes a weekly candle above $40.50. As a result, this will invalidate the trade.
For now, all we do is observe - but as soon as GMX reaches our expected region, here’s a simple idea on how to structure this trade:
Entry: $37.50 - $40.50
Exit: 50% at $30.80, the rest at $28 and lower prices.
Stop loss: $42 (or lower, depending on risk appetite)
By applying this simple strategy, we’d reduce our risk by closing half of our position and leaving the rest for our final TP. As for the stop loss, it should be as low as possible, given how the current market is on the rise, and we’d be trading against the general trend.
We’d look into this setup only if the market starts to retrace once GMX reaches our expected region of $37.50 - $40.50.
🚨NOTE: Not to be replicated without reading the disclaimer! This is not financial advice. Any decisions you make are entirely your responsibility!
This trade is over one year in the making ⚙️
Remember AAVE? Our expectations are playing out nicely.
We’ve identified a descending triangle that has respected its levels thus far. Now, the price is headed for another test of the upper channel, where we expect a rejection, followed by more ranging inside the pattern.
In case you don’t know, descending triangles are usually bearish continuation patterns. After a fall, the price ranges and forms a pattern until it eventually breaks the bottom side and continues the bearish trend.
However, AAVE has been in a downtrend for ~850 days with little upside movement, and for the past ~460 days, its price only consolidated inside the pattern. In our view, this might be an accumulation zone.
This higher timeframe play will likely extend over the next few months. The only requirement for its success is going to be a bullish BTC. We will update you with any important changes to AAVE’s price and share our plan to tackle this opportunity when the time arrives.
In the meantime, this one’s worth a watch 👀
Major upside in store for ALGO 🐂
We covered ALGO a month ago, highlighting this huge accumulation region. For context, check this.
ALGO’s current situation is simple to understand - its price ranges inside a major accumulation region between $0.09 and $0.1450. Given that this region is wide, we expect considerable consolidation for the rest of the year.
But here’s where it gets exciting - accumulating here decreases the overall risk as we’d be buying at support. This setup works for investors and traders alike, as both perspectives will be invalidated by ALGO dropping under this region.
The upside? Well, we’re talking about 160% - 180% in gains over several months. That’s a pretty good deal to us, and we’d categorise this one as a low-risk, high-reward investment/trade.
Where is the general market headed? 🧭
Short answer - UP.
The last two weeks have brought back the bull. Support held nicely, and the chances of a move higher have increased exponentially. But we’re not expecting a straight path to the upside.
Bitcoin’s price action will most likely be choppy, making it hard for anyone to determine whether it can sustain higher moves. We recommend looking at the higher timeframes to make the situation less foggy.
What you see in the image above is Bitcoin’s weekly timeframe. The only event that can invalidate a move to $28,750 is a loss of $25,150 as support.
Can that happen? Absolutely.
Will it happen? Unlikely.
We’re acting based on probabilities here, so we’ll say there’s an 80% chance of Bitcoin holding $25,150 as support and actually reaching $28,750. What do we do if the market rises?
We take profits.
Cryptonary’s take 🧠
Opportunities are endless. Even during the most boring market cycles in the industry, there’s still that one opportunity that breaks the odds.Where do most people fail? They find the opportunity, but they get emotional and avoid taking profits. As a result, their success instantly becomes a failure. One of the easiest ways to survive and thrive in crypto is to take profits. We recommend trading to increase capital to invest in your long-term portfolio, especially in the current market. On Monday, we will publish a pro report where we’ll also be going over Bitcoin’s correlation to Gold and how it can impact its price action in the short term. Stay tuned!
Action points 🎯
- As a trader, you should reanalyse all your trades often. Understanding why some trades work and some do not will help you differentiate the winning setups from the losing ones.
- Never trade against the general trend. While we did present a short opportunity on GMX, it is merely a plan B in case the market starts to reverse. This way, we’ll capitalise on the downside.
- Got more questions? Hit us up on Discord in the “🌎・general” channel!
Cryptonary out!
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