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Top-down-analysis is KING, and I'll show you why
BTC-trade breakdown ๐๐งต
Top-down-analysis is KING, and I'll show you why
BTC-trade breakdown ๐๐งต
During a top-down analysis, you work your way down from the highest timeframe, to the lowest.
You want each timeframe to confirm each other, this way you form your bias and you make your trade-idea stronger.
You want each timeframe to confirm each other, this way you form your bias and you make your trade-idea stronger.
BTC 1-week timeframe:
On the weekly timeframe, we see a sweep of the low followed by a range reclaim. We also see a breaker pattern formed, which has been hit beautifully and triggered a bounce.
Weekly timeframe is thus bullish.
On the weekly timeframe, we see a sweep of the low followed by a range reclaim. We also see a breaker pattern formed, which has been hit beautifully and triggered a bounce.
Weekly timeframe is thus bullish.
1-Day timeframe:
On the daily timeframe, we see that the uptrend structure is still intact, with price making higher lows and higher highs. We also see that a daily breaker has occurred, where we may expect a bounce.
Since the higher TFs are bullish, we look for a long here.
On the daily timeframe, we see that the uptrend structure is still intact, with price making higher lows and higher highs. We also see that a daily breaker has occurred, where we may expect a bounce.
Since the higher TFs are bullish, we look for a long here.
1-hour timeframe:
On the hourly timeframe, we see that we have broken below the range, and we are currently testing a demand zone. In this demand zone, we see a 3-dives pattern, which is a bullish pattern.
Because of the demand zone + 3-dives, we should expect a bounce.
On the hourly timeframe, we see that we have broken below the range, and we are currently testing a demand zone. In this demand zone, we see a 3-dives pattern, which is a bullish pattern.
Because of the demand zone + 3-dives, we should expect a bounce.
For the execution of the trade, we zoom in to the 15min timeframe.
At the 15min TF, we see that the previous high is broken, thus creating a higher high and a BOS (break of structure).
At the 15min TF, we see that the previous high is broken, thus creating a higher high and a BOS (break of structure).
We now have the following confirmations:
- Weekly bullish
- Daily breaker support
- 1h demand zone + 3-dives pattern
- 15min break of structure (higher high)
- Weekly bullish
- Daily breaker support
- 1h demand zone + 3-dives pattern
- 15min break of structure (higher high)
The setup is then as follows. This is an aggressive entry based on the top of the AOI. You can also look for FVGs or Demand zones within the AOI for a more accurate entry.
Price hits the top of the AOI perfectly, and bounces towards the target, which is fixed 2R.
This is a great example of how all timeframes confirm each other, and of trade execution at lower timeframes. In my opinion, for every trade you make, you should check if all timeframes confirm each other, and if they do, it greatly increases your chances of a successful trade.
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