High probability intraday bullish trade: 5 minutes candles above daily, weekly and monthly CPR

BTCUSD Coinbase
5 minutes chart of BTCUSD Coinbase

In the above 5 minutes chart of BTCUSD we can see weekly CPR is above monthly CPR, and daily CPR is above weekly CPR, and 5 minutes candles consolidated for sometime above the daily CPR and later we can see a intraday upwards bullish rally after range breakout and a pull-back.

Daily, Weekly and Monthly CPR

When analyzing the relationship between daily, weekly, and monthly Central Pivot Ranges (CPR) and their respective positions relative to the price action, traders can gain insights into market sentiment and potential future price movements. Let's break down the scenario where the weekly CPR is above the monthly CPR, the daily CPR is above the weekly CPR, and the candles are above the daily CPR.

Interpretation of the CPR Levels

1. Weekly CPR Above Monthly CPR:

   - This indicates that the weekly market sentiment is more bullish than the monthly sentiment. The market is showing a strong upward momentum on a shorter-term basis compared to the longer-term trend.

2. Daily CPR Above Weekly CPR:

   - This shows that the daily sentiment is even more bullish than the weekly sentiment. There is strong buying pressure in the very short term, suggesting a continuation of the upward trend.

3. Candles Above Daily CPR:

   - When the price candles are trading above the daily CPR, it indicates immediate bullish sentiment. Buyers are in control, and the price is likely to continue moving upwards in the short term.

Combined Interpretation

- Overall Bullish Sentiment: The alignment of daily, weekly, and monthly CPR levels in an ascending order (daily above weekly above monthly) signifies a strong bullish sentiment across different time frames. This suggests that the market participants are optimistic about the price moving higher.

- Potential Continuation of Uptrend: Since the price is above the daily CPR and the daily CPR is above the weekly CPR, it indicates that the upward momentum is strong. The alignment across multiple time frames suggests that the price is likely to continue its upward trajectory.

- Support Levels: Each CPR level (daily, weekly, and monthly) can act as a support level if the price retraces. Traders often look for buying opportunities when the price pulls back to these levels, expecting the support to hold and the uptrend to resume.

Trading Strategy

Given this bullish alignment, a trader might consider the following strategies:

1. Buying on Dips:

   - Look for pullbacks to the daily CPR levels as potential entry points for long positions. The daily CPR levels should act as immediate support.

2. Trend Following:

   - Enter long positions when price action confirms a continuation pattern (e.g., a breakout above a recent high) above the daily CPR, targeting higher levels or the next resistance zones.

3. Setting Stop-Losses:

   - Place stop-loss orders just below the daily CPR or the recent swing low to protect against unexpected reversals. This ensures that the risk is managed in case the market sentiment changes.

4. Multi-Time Frame Analysis:

   - Continuously monitor the alignment of CPR levels across different time frames. Any shift in the position of these levels (e.g., daily CPR falling below weekly CPR) might indicate a potential change in trend or sentiment.

Conclusion

The alignment of daily, weekly, and monthly CPR levels provides valuable insights into market sentiment and potential price action. When the weekly CPR is above the monthly CPR, the daily CPR is above the weekly CPR, and the candles are above the daily CPR, it indicates a strong bullish sentiment across multiple time frames. Traders can use this information to devise trading strategies that capitalize on the prevailing uptrend, while also managing risk effectively.

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