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The EOSIO platform is one of the most promising projects right now when it comes to crypto investments in both the short and long term horizon.
The platform, which looks to provide solutions for online hosting, storage, and computing, has done great work in developing a strong project that boosts its token’s value.
Thanks to its features such as RAM purchasing and ownership stake ratio with its coins, the EOS cryptocurrency is hugely popular for day trading also!
Advantages of Trading EOS
As I said previously, EOS is a great option for traders of all timeframes. Why is that?
Well, the coin is quite liquid, which makes day trading a suitable trading style. Lower timeframes such as the 15m work well for price action analysis and day trading this coin.
On the other hand, long-term traders can also greatly benefit from the fundamental values of this coin.
That’s because block.one - the developers of EOS - have made an agreement with the organization Everipedia, to make information available in countries like Iran, which have blocked Wikipedia’s access. This would be done through the Everipedia’s fork.
This project, which has already raised $30 million for Everipedia, could quickly position EOS as one of the most important shares to hold in the upcoming years.
How To Trade EOS With Price Action
The EOS cryptocurrency is one of those altcoins that enjoy huge liquidity compared to others. This makes the coin easily tradeable on short-term and intraday timeframes.
Now, let’s look at a real-world example of using price action to trade EOS on the 15-minute chart.
There, we can easily spot a classic head and shoulders pattern.
How do you trade it?
Well, let’s see what details we can find on this chart.
The standard rule is to wait for the H&S pattern to be confirmed. That happens when the neck is broken and surpassed. Therefore, in this case, we can place a pending SELL-STOP order at 5.4400.
The black line on the above chart represents the “averaged” neck of the head and shoulders pattern. Sometimes this approach works better than drawing sloping trendlines and is particularly useful for traders who are not big fans of angled lines.
When it comes to exit points, we can place the S/L at the shoulders, which is a bit conservative for a head and shoulders pattern, but it is appropriate if there is enough conviction that the price will not retrace that far if the pattern will be successful.
The T/P, in this example, can be placed at 5.4200 which was an important support price level.
Sure enough, it would set us up for a nice profit of 200 points!
Here’s yet another trade, which was actually a real trade we took, also using a chart pattern. This time, the pattern was a double-top:
Following the standard rules once again, we get this:
We took a short position when we saw that the support for the double top pattern has been broken (at 5.6000). As per the trading rules for the standard pattern, we placed our S/L right at the top (5.6200)!
Lastly, we placed our T/P well below the entry level. To be precise, we set the T/P twice as much as the S/L, which is a fairly common practice - even though using fixed RRR (Risk-Reward-Ratio) is not recommended generally. In this situation, however, the fixed RRR was possible since we saw strong bearish pressure kicking in the market.
Of course, it was also possible to exit based on Price Action - but in the end, the exit here would be at a similar price level (5.5600). As you may spot, we could’ve gone much more aggressive and scored a bigger reward, but still left the trade with 400 points in the pocket!
As you can see - simple Price Action patterns and techniques are highly profitable in any market, and EOS is not an exception. - See you here with the next profitable trading strategy.
Take care and trade well!
