Steemit Crypto Academy Season 3 Week 3 (Homework for @crytocraze)Break Retest Break (BRB) Strategy

ckole (68)in SteemitCryptoAcademy • 4 years ago (edited)

It's another beautiful time to participate in this wonderful homework. I wasn't chanced to participate in the second homework, but I did the first, however, I read through it and got the whole info about the previous lecture. This week's lecture is all about break retest strategy. So what's the strategy all about? In this homework, I will answer the four questions asked by our professor @cryptocraze, so stay with me as I unleash the little I understand from the lectures

Question 1

What do you understand about the Concept of Break Retest Break Strategy? Give Chart Examples from Crypto Assets

The concept of BRB is mainly based on support and resistance. To me, I see these levels as the main point where the break and retest strategy rely on. And most times, the BRB, happens after what we call the consolidation period, or when a channel is formed. The support and resistance level tends to be rigid like a rock but they can be pierced, and welcome penetration when there is a full force of price action

The image below displays the explanation of BRB in an uptrend and downtrend manner using a crypto chart.

From the above image, the price broke the resistance and there was a bearish trend and later a retest before another break.

The concept is very straightforward if it can be mastered.

Resistance or support level is created from the zig-zag movement of an asset price
Price goes up and down maintaining the resistance or the support point (I call the support and resistance rigid level or consolidation)
Eventually, the rigid level is broken, and the price pulls off and we start seeing the BRB taking place. That's how it goes on and on.

Question 2

Mark important levels on Crypto Charts to trade BRB strategy. Do it for Both Buy and Sell Scenario

The important levels to trade BRB on any crypto chart are

1 Support level

2 Resistance level

3 Breakpoint

4 Retest

5 Swing point

Let's shortly explain these levels, and show them in a crypto chart

Support level

Support level is seen as the main, and important level below the price action. We believe that when the price of an asset reaches or approaches these level, it mostly reverse in the opposite direction, but there are some times it breaks through

Resistance level

This is the opposite of support because it works in an opposite direction. It is also the key level above the price action. When the price of an asset reaches or moves close to this level, it's mostly rejected and there's always a reversal. However, the price can break the resistance level and find its way uptrend more and more

Break point

The breakpoint occurs when the price refuses to respect the support or the resistance level. This is where there's an agreement between the bears or the bulls. If the market has been respecting the levels and reversing, the point where the price forcefully exceeds and break the support or resistance level is called the break point

Retest

This is also an important level that must be noticed when using BRB. When the price of an asset breaks either the support or resistance level, the reversal back to that level is called retest

swing level

We have the swing high and the swing low. When the price of an asset moves higher to a peak and retrench t o a lower point, which is important to hunt reversal. The sing low is the opposite of swing high

Showing the levels explained

The important levels to trade BRB in a sell scenario

The important levels to trade BRB in a buy scenario

Question 3

Explain Trade Entry and Exit Criteria for both Buy and Sell Positions on any Crypto Asset using any time frame of your choice (Screenshots Needed)

It's important to understand the kind of market condition where a break and retest strategy functions. And also, it's paramount to know the rules and how the market condition function before knowing how to place a trade and exit at the right time

I prefer using a three-wave price structure to enter or exit a trade if only I'm using the BRB concept. Why I mostly wait for this signal is because we traders use multiple tools to identify an entry and exit point, but in a case where we decide to go one way without confirming with another strategy or indicator, we need to be extra careful and patient to do the right thing, because the market always act as if it's friendly, but when you delve into it, you might see the other side of it

The first rule is to identify a trend. We must have a glimpse of the fact that a market is going either boolish or bearish

Secondly, we should be able to draw the areas of support and resistance

Be patient to see the pullback and retest level before making a decision

And finally look for an entry point with regards to the direction of the trend

I will answer this question based on these four points on the graph I'm showing below.

First and foremost, I identified the graph as a bearish pattern trend because the direction of the movement already signifies a bearish movement, however, that is not enough. I still need to initiate the second step. However, From the image I'm analyzing, when the price of the asset broke the resistance level, It's an indication that the bears are taking the lead

The second step I followed was to draw the resistance point to ascertain whether my analysis is correct or on-point whatsoever

After that, I had to closely check out for pullback (broke) and retest level

The entry and exit point criteria using 1h time frame in a bearish trend I noticed the support level and watched closely. When the price of AVAX broke the support level, I waited to see a retest. From the image, the support level was broken at 0.04408, and retest at 0.04325 (The white line shows the point). The second break went further down to 0.04260, and retest again. But the good thing is that retest didn't exceed the first level where the break started from the support level. This was when I was assured to get an entry point between 0.04400, and 0.04350, and put my exit point somewhere around 0.4300

Question 4

Place 2 demo trades on crypto assets using BRB Strategy. You can use a lower timeframe for these demo trades

I used 1-minute time frame to monitor the price action and placed a buy when I saw the green light. It was a short movement I used to place my trade because it seems difficult to quickly act using the BRB with one minute time frame but I was fast to use the strategy because I don't want to miss the opportunity. I set my stop loss at 1.8055, and take profit at 1.18076 and I entered the trade at 1.18062 (which is the yellow line I drew) when the long break (green candlestick) broke well beyond the resistance level after the first break. If I wasn't conversant with the BRB, I would have missed the point to put my stop loss. As we can see in the image, My top loss was placed a little below my resistance and after I took my profit, the next break went past my stop loss. Everything happened so fast because it was a 1-minute time frame. If I hadn't acted fast, it would have been another story. Below is the proof of the trade I made and the profit

Conclusion

The BRB strategy is a unique strategy that can work wonders if properly monitored. It cut across the main things that determine the price movement of an asset, talking about resistance and support (mainly). The only thing needed in the BRB strategy is to create time to watch the movement of the candlesticks, and when the BRB lines come into play, action should be taken immediately and we should be conversant of the time to exit as well. All thanks to @cryptocraze for his wonderful lectures. I enjoyed the BRB strategy. At least, I can trade with it if I don't feel like using any indicators

Bravo!

Thanks for reading.

This is ckole the laughing gas. One love

Cc: @cryptocraze

#cryptokraze-s3week3 #cryptoacademy #brb #strategy #nigeria #cryptocurrency

4 years ago in SteemitCryptoAcademy by ckole (68)

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cryptokraze (72) 4 years ago

Dear @ckole

Thank you for participating in Steemit Crypto Academy Season 03 and making efforts to complete the homework task. You got 6.5/10 Grade Points according to the following Scale;

Criteria	Grade Points
Presentation Style	2/2
Content Quality	1.5/2
Originality	1.5/2
Relevance with Topic	1.5/2
Practical Approach	0/2

Key Notes:

In question no 03, while explaining the trade entry criteria for buy position, you have marked buy entry earlier. We wait for the 2nd break and then enter. Price has not broken the new swing point yet.
In the last question, I wanted to see if students picked this strategy. You have not placed trade on crypto asset and used forex chart. It is wrong as well.

We appreciate your efforts in Crypto academy and look forward for your next homework tasks.

Regards
@cryptokraze

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ckole (68) 4 years ago

Your review is very right prof. I already marked myself before your review. I gave myself between 6-7 scores. I know my weak point, so I'm grateful for the wonderful and truthful comment. Looking forward to the next assignment. One love

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