Analysing ADA/USDT using the top-down analysis

Hello dear friends, welcome once again to my blog. Today I want to go into trading in the financial market. Here in this content, I will be sharing with you all my trading strategies which I applied to the ADA/USDT pairs.

I have always emphasized the top-down analysis approach when it comes to trading the financial market. So in this trade, I applied it. I analyzed the market using the 4H timeframe and entered the market using the 30M timeframe.

My strategies are very simple, firstly, I ensure I'm trading with the trend I.e I'm not counter trading meaning I'm not trading against the trend at the moment. From the chart above, you will notice that the trend is an uptrend. Before this time, the trend was a downtrend but we had a CHoCH.

With the CHoCH, you can see that the trend is moving bullish. I took the key support and resistance level which is respected on the 4H, 1H and 30M timeframe into consideration. I waited for the price to go up and then retrace and I placed a buy right above the middle line which acts as a dynamic resistance.

When a resistance is broken as seen above, we place a buy order because that signifies trend continuation. So I waited for the resistance to break above then I placed my order. My take profit on the other hand is seen above which is the next resistance line.

At the moment, I only used a very little stop loss because the margin of the trade is also very little since I missed out on the earlier movement of the trend. I was supposed to enter the trade from the very beginning but since I missed out I had to wait for a retest which happened in the next resistance zone and after the breakout, I was able to place my order.

The setup is looking good on both the 4H and the 30M timeframe and if the trade goes as predicted, there will be much gain from the trade as it follows most of the rules required for it to be successful. From the little analysis I have made here, you will agree with me that trading the financial market is very easy and simple.

You should always use proper risk management strategies as you can see from my chart. The stop 🚫 loss of the trade is right below the dynamic resistance level which turned support after the breakout and the take profit is at the next resistance level. The ratio of the trade can be seen as a 1:6 risk-reward ratio.

This means I'm ready to lose 1% of my capital and earn 6% of it if the trade goes against me or in my favour. We wait to see how the trade plays out as we only predict and the market may be controlled by other things like news and others but in the aspect of technical analysis, I expect the trade to go my direction.

I hope you all have learnt something new from the technical analysis carried out on ADA/USDT today. You can locate your chart as well and then try to see the levels which I have marked and try carrying your analysis on other pairs as well. If you have any issues or challenges, please drop a message in the comment section of this post.

Disclaimer: ^{This post is made as an education and not investment advice. Digital asset prices are subject to change. All forms of crypto investment have a high risk. I am not a financial advisor, before jumping to any conclusions in this matter please do your research and consult a financial advisor.}