SEC S18-W6 || Mastering the Break Retest Break (BRB) Strategy.

Hope you all are doing well and good and enjoying the best days of your life. This is me @shahid2030 from Pakistan and you are here reading my post. You all are welcome here from the core of my heart.

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This is my participation in a contest SEC S18-W6 || Mastering the Break Retest Break BRB Strategy organized in SteemitCryptoAcademy by @crypto-academy.

To identify potential entry points, we have a popular trading technique called the Break Retest Break. It works on the bases of the price action of a financial asset. The principal concepts here are support and resistance levels, which are key areas where the price tends to reverse or pause. Let me explain how BRB strategy works and how we can apply it to trading the Steem token.

Understanding the BRB Strategy

Initial Breakout: Breakout happens when the price of an asset moves through a key level, either support or resistance. Example; the market break it's current resistance, it means their is a shift in market sentiment from bearish to bullish.

Retest or Pullback: After the initial breakout, we mostly see the price retraces or come back to the broken level. This pullback we consider a test to see if the previous resistance (now acting as support) holds. The retest is always to confirms the strength of the breakout.

Continuation of a trend: If the price is able to hold successfully retested level and then moves away from it in the direction of the initial breakout, it's a confirmation of continuation of the new trend. This is the best entry point with us.

Applying the BRB Strategy to Trading the Steem Token

1) Identify Key Levels ( Support and resistance )
Use all the previous and historical price data of Steem and identify significant support and resistance levels. We can do great prediction of price movement, if able to find these levels concisely. Through resistance and support we can find out which trend we are in, and can also find out best entry and exit points.

2) Monitor for Breakouts ( especially initial break)
Always notice Steem’s price to break through a significant resistance or support level. It's easy for us to identify it using various technical indicators; moving averages, trend lines, Fibonacci retracements and many other.

3) Wait for Retest
Restest is already explained above, it's a kind of price retracement. This is the confirmation of trend either uptrend or down trend and we call it the best entry zone. Look for confirmation through bullish or bearish candlestick patterns, increasing volume, or other technical indicators.

4) Entry and Exit Points
Enter the trade once the price confirms the break again. For Long position it would always happens after the formation of new support. For short position it would be made after the breakage of strong support.

5) Stop-Loss & Take Profit
For Long position place stoploss slightly below the new support level. For short position place stoploss slightly above the new resistance level.

Taking profit is UpTo you. Try to manage risk reward ratio, use some other technical indicators too for more accurate trades.

Example of BRB Strategy Applied to Steem Token

Let's suppose STEEM has a resistance of $0.40 (key level). The price goes up and break this resistance level (first break through). Let suppose it reaches $0.45. After hitting $0.45 the price come back to the new support and old resistance level (retest). The price grow again, it's the confirmation of uptrend ( continuation). It reaches $0.43, $0.47, $0.50 and so on.

Now the question is what should be our entry and exit points and where should you put stoplosss and take profit?. Our entry point should be somewhere $0.42 after retest, stoploss should be at $0.38 level and take profit should be at $0.55 or $0.60 level; it depends on your risk to reward ratio or profit and lost management.

BRB strategy in crypto often use for finding best entry or exit zones. We find the direction of market using various indicators and other technical factors. Let me explain how we can apply it to trading the Steem token.

Technical Indicators

Support and Resistance Levels
Support and resistance are too crucial things in crypto trading. Finding it can give us best future prediction. Try to find support and resistance for multiple time frames; one day, 4 hours, and 15 minutes time.

Moving Averages
Use moving averages, which helps the best to identify the trend direction. Most famous moving averages are 50 days and 200 days moving averages. Combination of these two give us death crossover and Golden crossover, which are too much effective in technical analysis.

Volume
Track volume spikes as they often accompany breakouts.

Relative Strength Index (RSI)
It's a too much easy and authentic technical indicator. RSI is all about oversold and overbought condition. 70 or abobe it is overbought and 30 or below it is oversold zone.

Bollinger Bands
These can help identify the volatility in the market and also indicates potential breakouts by showing the price range.

Fibonacci retracements
This is the best technical tool, which shows us the best retracement levels in the market. Finding real retracement levels are the most tough job in technical analysis.

Market Conditions

Trend: Identification of trend is too much important to know the market well. We should determine if the market is in an uptrend, downtrend, or sideways consolidation. We must know that the BRB strategy works best in trending markets.

Volatility: It's obvious that higher volatility always lead to more significant breakouts, so assess the market’s volatility.

News and Events: Being aware of what's happening globally is too much important. We must be be aware of any fundamental news or events related to Steem that might impact its price.

Entry Criteria

Breakout
Find the authentic and most confirmed breakouts, it could be breakout of resistance or support level. Go for trade accordingly.

Retest
Always confirm retest after the breakout. This is the place where we take entry in the market. retest is the confirmation of the new trend ( up or down trend).

The BRB (Breakout-Retreat-Bounce) strategy involves identifying the exit points too based on specific price movements and various patterns. Let's me explain here the conditions too.

Exit Criteria for a Profitable Position

Profit Target: Set a predefined profit target based on your risk reward ratio. It must be at least 1:5 according to me. You may use some best technical indicators to find best entery and exit positions. Once you find it, you can exit the position when this target is reached.

Breakout Confirmation: Once breakeven is confirmed, we decide our trade's position. Now the question is what should be our exist point?. If the price continues to move in the direction of the breakout with strong momentum and volume, we maintain the position. We get exit when signs of weakening momentum appear (e.g., decreasing volume or bearish reversal patterns).

Technical Indicators: Using of technical indicators is good strategy. Every technical indicator have it's own analysis methodology, some give best retracement levels, some give overbought or oversold zones, some show us trading volume etc. Use them in combination and find your best exist zone where you can gain maximum profit.

Exit Criteria for a Losing Position:

Stop-Loss Levels:
Initial Stoploss Always set an initial stop-loss level below the key support level. You may also put it at a certain percentage below the entry price. You should exit the position if the price reaches this stop-loss level to limit losses.

Trailing Stop-Loss: We can use thrilling stoploss option too. We move our stoploss according to the market movement. Here our stoploss is not at fix position. Here we protect our profit UpTo certain limit or put our stoploss at entery point so no loss happen.

False Breakout: We come up sometime with false break out too. We should exit the position if the breakout fails and the price retreats back below the breakout level. It's the indicating of a false breakout. This scenario suggests our breakout was not sustained and the position should be closed to avoid further losses.

Bearish Patterns: Bearish patterns are also our exit zones. We should exit our position if bearish patterns such as a double top, head and shoulders, or bearish engulfing candlestick pattern form, indicating potential downside reversal. Here we can use technical indicators too

First of all for finding BRB for Steem token we should Identify it current price range. If we look for it's one month data, steem is ranging between $0.17 to $0.33 and in last seven days it's price is ranging between $0.17 to $0.20. We can find our entery and exit point, stoploss, take profit between these ranges. But let me mention it here that, it is for short term or mid term traders, for long we look a too old price data.

I will use one hour chart of STEEM/USDT pair to find it's BRB.

First I have tried to find out trend lines of STEEM on one hour time frame. We see STEEM is in upward trend. You may notice some false break out here too, but steem price respect that trend line. So first thing we get here that we will go for long position, because we are currently in uptrend.

On Fibonacci we are trading currently at 0.23 level which is consider a crucial one, but the most crucial levels are the three golden levels, which are 0.38, 0.5 and 0.61. I think price will retrace at least to 0.38 level. So for a short term we may see STEEM coming down.

Stochastic also shows we are in overbought region. Overbought mean we might see a retracement at this point and price may go down. But the trend line is a strong support, I am sure Steem price will respect it.

Now I have used some indicators so I will show my entry and exit point and what should be our stoploss and take profit.

Entry point: Our entry point I will keep 0.19, we have golden level of Fibonacci there (0.5). Price must go up if break the above two golden levels. If price come to this place it will be in oversold condition on stochastic too. Oversold mean buying signal. Plus we can see a trend line near that Position. My take profit or exist will be at 0.21 level. I will put stoplosss below trend line, somewhere at 0.185.

BRB strategy works on certain key principles for managing risk. What I am using here for the best result, let me mention all one by one.

Risk Management Techniques

Position Sizing: We should determine the amount of capital to allocate for each trade. We select a portion of of total capital. A common rule is to risk only a small percentage of your total capital on any single trade, typically 2-3%.

Diversification: This is the most best and my favorite option. In diversification we put our Portfolio in different coins, rather than just one. It helps creating more profit opportunities. On the other hand if only in one project/coin our lost and profit will only depends on it.

Risk/Reward Ratio: Our profit must be more than our lost at any trade. It means if our TP is hitted it should give more profit than the lost, if stoploss is hitted. Minimum it should be 1:2, for me I keep it at least 1:4.

Regular Monitoring: Must monitor and keep eyes on market conditions and your portfolio. Make your strategy and keep positions based on market changes and your performance.

Use of Leverage: You can buy big trade even with small amount, but must be aware of it's risk too. You must be ensured that you understand the risks and use leverage conservatively.

Setting Stops and Limits for Steem Token Trades

Stop-Loss Orders: In stoploss we have two options: Percentage-Based Stop-Loss and below Support Levels. In percentage base we place stoploss at a fix percent. For example, if you buy Steem at $1.00, you might set a stop-loss at $0.90 (10% below the entry price).

In below the support level we place stoploss, because it's a key level. Our stoploss should be below it, if it is crossed it's mean trend reversal.

Take-Profit Orders: Here we have the same phenomena; either putting it according to the percentage level or near resistance level.

Trailing Stops: Thrilling stop concept is also too good, I have already explained it above, but let me repeat it again that, it's meaning moving your TP or SL according to Market situation

This is all about my blog for today, hope you guys have enjoyed reading it. See you soon with a new amazing and interesting topic, till take care.