Crypto Academy / Season 3 / Week 8 - Homework Post for @cryptokraze | Trading Sharkfin Pattern

in hive-108451 •  4 years ago 

Understanding of Sharkfin Patterns. Give Examples


BTC-USDT pair (15 minutes) from Binance, edited with InShot app

Sharkfin Patterns are a group of another trading strategies that we can apply in our market performances by looking for the formation of a quick and clear movement of price and then a sudden reversal that draws the form of a V. For sure we can see them in any of these possibilities:

🔼 V shape pattern: When price goes downtrend quickly but suddenly rises practically at the same level where it was before this fast behavior.


V Shape in the BTC-USDT pair (15 minutes) from Binance platform

🔽 Inverted V shape pattern: When price goes uptrend quickly but suddenly drops practically at the same level where it was before this fast behavior.


Inverted V Shape in the BTC-USDT pair (15 minutes) from Binance platform

Notice a huge volume of transactions during the creation of these V shape patterns due to the reaching out of liquidity levels that used to be supports or resistances, depending of the case.


Implementation of RSI indicator to spot Sharkfin patterns

The use of the Relative Strength Index (RSI) in the chart with default settings (14 length and 70/30 of limits' bands), will help a lot the filter we need to do of several fake signals that might show these market patterns...we must see a clear spike that was drawn out of the zone's bands, accompanied of course of a sudden movement derived from the price behavior:

🔺Uptrending example

During the watching of price, we have to look for a spike's creation in the RSI indicator line during the V Shape Pattern formation at the oversold zone that is located between 0 to 30 in the scale of this oscillator. When the mentioned line gets below of the 30 band but then goes quickly above of it by entering to the colored zone of RSI as a spike's figure, we can consider this as our signal confirmation to ensure a valid Buy Entry.


V Shape in the BTC-USDT pair (15 minutes) from Binance platform with RSI indicator

🔻Downtrending example

During the watching of price, we have to look for a spike's creation in the RSI indicator line during the Inverted V Shape Pattern formation at the overbought zone that is located between 70 to 100 in the scale of this oscillator. When the mentioned line gets above of the 70 band but then goes quickly below of it by entering to the colored zone of RSI as a spike's figure, we can consider this as our signal confirmation to ensure a valid Sell Entry.


Inverted V Shape in the BTC-USDT pair (30 minutes) from Binance platform with RSI indicator

Also, take a look at the following example of V shape that was formed by the bars but without enough strength to keep going at the desired direction, so it tends to range and invalidate our setup's for a profitable operation, compared with those ones that have a good impulse from areas that are outside of the bands (oversold and overbought areas).


V Shape in the BTC-USDT pair (30 minutes) from Binance platform with RSI indicator


Trade entry and exit criteria to trade Sharkfin Patterns

🔺Uptrending sample

When we notice an evident creation of a V Shape Pattern with a sudden falling of the price, then a quick growing that surpasses practically the same level of the beginning of these pair of movements, we can expect a Sharkfin Pattern in this opportunity.

At this point,we need to confirm this behavior with the RSI indicator displayed in the chart already, by waiting for the location of its line over the oversold area (below 30) then a quick reversal that make it going clearly above of this level (and drawing a spike) to ensure enough impulse for our buy setup, no matter if we're having already a Sharkfin Pattern because it might be invalidated by a fake signal.

Once we obtain these conditions, it's the perfect moment to set a Buy Entry with a Radio Reward of 1:1 to make a Sell Exit and guarantee a good profit from it... That is an equal amount of profit in front of assumed risk. The Stop Loss must be located below the swing low point made out by the V Shape Pattern if prices takes an undesired direction.


V Shape Sharkfin Pattern in the BTC-USDT pair (15 minutes) from Binance platform

🔻Downtrending sample

When we notice an evident creation of a Inverted V Shape Pattern with a sudden raising of the price, then a quick falling that surpasses practically the same level of the beginning of these pair of movements, we can expect a Sharkfin Pattern in this opportunity.

At this point,we need to confirm this behavior with the RSI indicator displayed in the chart already, by waiting for the location of its line over the overbought area (above 70) then a quick reversal that make it going clearly below of this level (and drawing a spike) to ensure enough impulse for our sell setup, no matter if we're having already a Sharkfin Pattern because it might be invalidated by a fake signal.

Once we obtain these conditions, it's the perfect moment to set a Sell Entry with a Radio Reward of 1:1 to make a Buy Exit and guarantee a good profit from it... That is an equal amount of profit in front of assumed risk. The Stop Loss must be located above the swing high point made out by the Inverted V Shape Pattern if prices takes an undesired direction.


Inverted V Shape Sharkfin Pattern in the BTC-USDT pair (15 minutes) from Binance platform


Placing trades based on Sharkfin Pattern strategy

☑️ Validated Trade

Making an eagle eye over the price behavior of KAVA-USDT pair from Binance (3minute), I've noticed the formation of a Inverted V Shape (Sharkfin Pattern) after a sudden raising of value then quick dropping of it, so I confirmed the location of RSI indicator on the value of 72,9700 and a later cypher of 60.7299 which means the leaving of overbought territory, creating a spike in the line.

Made a Sell Entry of 7.0310 with a Stop Loss of 7.0756 located over the swing high point of Sharkfin Pattern and a profit of 6.9864 for a 1:1 Radio Reward, which was validated thanks to the consequential Downtrending of the market.


Details of trade setup that was made for this example with KAVA-USDT pair pair from Binance

Unvalidated Trade

Making an eagle eye over the price behavior of KAVA-USDT pair from Binance (3minute), I've noticed the formation of a Inverted V Shape (Sharkfin Pattern) after a sudden raising of value then quick dropping of it, so I confirmed the location of RSI indicator on the value of 71.9327 and a later cypher of 64.9814 which means the leaving of overbought territory, creating a spike in the line.

Made a Sell Entry of 6.6853 with a Stop Loss of 6.7777 located over the swing high point of Sharkfin Pattern and a profit of 6.5929 for a 1:1 Radio Reward, which was unvalidated thanks to the consequential Upwntrending of the market.


Details of trade setup that was made for this example with KAVA-USDT pair pair from Binance


👷🏻‍♀️>>~•Alegn@•~>🎶

The photographies belongs to me and they were taken by a Xiaomi Redmi7A cellphone camera in Venezuela.

*** See you in next post *** 📝

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