(Partial video transcript)
This week’s trading opportunity
This week’s “Trade of the week” is to go long Bitcoin. The reason is that last week we managed to close above resistance we’ve been seeing since the beginning of February, as you can see on my chart in the video. And that positive close last Wednesday does mean that probably that resistance area has been broken through now. Since then, we’ve come off on these geopolitical events happening in the Middle East.
But I’ve got the distinct impression that, once again, people are becoming more interested in cryptocurrencies. And, therefore, I’d like to go long Bitcoin around current levels at $67,750, with a stop-loss below the early February low here at $60,090, and an upside target around the previous resistance area where we sort of traded sideways, as you can see in December on the video’s chart, around the $88,000 mark.
Previous weeks’ trading outcome
Now, last week, as you may know, we stood aside because of what happened with regards to the Iran war. And there’s just so much volatility, it was very dangerous to put a trade on.
But the week before that we went short EUR/GBP. And I can show you here on my chart that we nearly got stopped out but our stop placement was above the December highs. So it was well placed because, you can see, we got quite close to the stop, but we didn’t get stopped out before the currency pair declined as I expected it to. And now it has hit our downside target, this horizontal line here, as you can see. So that was, I think, £0.8650. So on this trade we made about 3% profit.
Analysis of this year’s weekly trades so far
Now this year so far, I haven’t done well at all. I’ve been wrong four times and I’ve only been right twice. But despite that, we are only down to around 2.5% year-to-date (YTD). And that’s why it’s so important to only risk 2% of your capital per trade, and also to make sure that your potential reward is much greater than your initial risk.
So if you get a 3%, 4% or 5% profit, and you’re risking 2% every time, you only need to be right about half the time and you still make a nice double digit profit by the end of the year, or you should do so. So that’s our approach with “Trade of the week”. And, as I say, so far we’re still down slightly, but it’s looking better than it did last week.