Trading Spotlight — Cryptocurrency Litecoin ($LTC)
Today’s trading spotlight deals with the cryptocurrency Litecoin, which is probably known by most crypto enthusiasts/traders. Litecoin has been trading in the opposite direction compared to the overall crypto market in recent days, as it had quite a big bounce off of lows recently. In the last days it went from the $60s all the way to the low to mid $80s. The daily chart below shows the recent advance in Litecoin.
As everything depends on the overall market (at least to an extent) I would also watch that for decision making. So always have Bitcoin and Ethereum in mind when trading Litecoin. There are also two options to trade these, which are similar to my last trade plan on Cream Finance (https://medium.com/@niklas.schomaker/trading-spotlight-cryptocurrency-cream-finance-cream-b535a129dd2d). There is the Long and the Short option to play Litecoin. In the 5 minute chart below you can see my short term lines of interest.
The last line is what I would consider short term support and this can be used as a risk level when trying to play this on the Long side. Establish a Long position with an average between the middle and the lowest line and set a stop loss below the line. It also happens to be the Volume weighted average price (VWAP) of the 5 minute chart, representing the average price at which a position was established. So average entry price of ~ $78.50ish with a risk at $77.50 ish. The goal here would be somewhere at $80 or above. If this can really get movement, it might break the previous high at around $84.
For a play on the Short side I would either wait for a spike, which is basically the Long strategy above, but go Short if it found a top OR take a Short position as it fails the lowest line/VWAP and join the downtrend. In the first case, wait for a lower high and use that as a risk level. In the second case use the lowest line of interest or VWAP as a risk level.
I hope this helps you get an idea of my plans for this crypto and how I would trade it. Also has Litecoin in comparison to previous covered cryptocurrencies a lot more daily volume, so it is easier to establish larger $ amount positions and still get out with not too much slippage. Just as a side information.
If you got any questions regarding my plans or how I determine where to go Long/Short, feel free to write it in the comments, I will be happy to help out. I also appreciate comments if u think differently about the plans and I am happy to discuss.
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Have a good day!
Niklas
This is not financial advice, it is for educational purposes only!
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