Cryptonary’s trades: BNB & CAKE trade setups & risk management approach

Here are the topics we'll cover today:

• BNB - short trade
• CAKE - short trade

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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BNB

Let's start with BNB. We've structured a BNB short setup with a clear plan and disciplined risk management. The stop-loss for all three positions is set at $755, with staggered entries to capitalize on potential upside before the move plays out.

• First entry: $650
• Second entry: $680
• Third entry: $710

This gives an average entry of $680, with a strong risk-to-reward ratio of 4.97, making this a high probability, especially as we may see some further upside leading into Wednesday's FOMC meeting.

Risk management & position sizing

• Given the nature of this setup, risk should be kept tight and controlled.
• A reasonable allocation would be 1% per position, totalling 3% of your future account at full exposure.
• This ensures you're not overcommitted and allows room for adjustment if the trade develops further.

Considerations

• The first entry at $650 has a wider stop-loss, giving better flexibility and improved risk-to-reward if the price pushes higher before the move plays out.
• If the price reverses earlier, we still capture part of the move and lock in profits accordingly.
• Squeeze exposure: The goal here is to capitalize on swings that aren't immediately obvious to the wider market, allowing us to position early and avoid chasing prices.

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CAKE

Some of us are starting to build up a short position on this one (started very small). CAKE is the BSC chain's main DEX. Essentially, it is a beta play for BNB, as shared above. Same thesis.

• If BNB goes higher, CAKE is likely to outperform BNB.
• If BNB goes lower (our bet), CAKE is likely to go lower.

CZ (the founder of Binance) is pushing the BNB ecosystem by pushing memes and AI, but frankly speaking, the chain is slow and more expensive than SOL or L2s. There hasn't been any innovation there for years, and we believe the market wants something to ride on. CAKE has already printed 90% + in the last few days but zoomed out; the chart looks bearish and in a downtrend.

Here is the game plan:

• The price is approaching the local downtrend and I (Abror) started scaling it into short on CAKE, but the main orders (in size) are put in the red box between $3-$3.5.
• Our thinking is that there needs to be room for error because we have a FED meeting on Wednesday and any dovishness from Powell can push BTC to $88k and CAKE can break the downtrend and head into the red box.
• Therefore, you need robust risk management, don't risk more than 3%-5% of your portfolio after all your orders are filled. Invalidation is if BTC reclaims $91-93k, if not experienced, put your stop loss above $4, but start small and average down on the way up. The idea is to have enough dry powder to run the short without getting liquidated and catch the mean reversion and the broader market correction we are expecting in the coming weeks/months.

That is it from us.

Peace!

Cryptonary, OUT!