I know what you’re thinking. Probably something along the lines of “8%….I could do that too if I wanted”. I’m sure you could, but here’s how I did it with BODEGA and why 8% in a market like this is actually a big deal.

The trade could’ve made me over 20% if I didn’t double down, but we’ll get into that towards the end. The real question you should be asking is what tipped my hat off to buy BODEGA, and how can we continue to replicate this week over week making a 10% gain here and an 8% gain there during this volatile sideways market.

I did no fundamental analysis for this trade (I have previously looked into the Bodega project before even making videos on it). All I did was let the chart do the talking and I think some other CNTs are starting to wake up as well.

A Break Out Of Stage 1 (30 & 40 Week Moving Average)

Step 1 to this beautiful plan was finding a Cardano native asset that was breaking out above its 30 week moving average. We know this to resemble the break out of stage 1 signifying the potential for a stage 2 rally. All I had to do was filter through every CNT on TapTools to find one with this setup.

30 week moving average should be above the 40 week moving average. Price should be breaking above 30 week moving average. Volume on the breakout should be higher than previous weeks by a good margin.

After looking through charts long enough, you will eventually realize this beautiful problem that many new crypto charts have…..NOT ENOUGH DATA. This makes it really hard to even look at a weekly chart. Below, LENFI has a ton of weekly data, but BODEGA isn’t quite that seasoned yet in comparison. I worked around this by molding Stan’s recommendations to our modern crypto environment.

You have two options to work around limited chart data. Use a smaller timeframe or adapt the larger timeframe’s moving averages to your current chart data. 

To execute the first scenario, you could simply move to a daily chart where moving averages of 50, 150, and 200 are recommended. Using this setup, you could’ve identified a significant change in trend as BODEGA crossed above its 50 day MA while simultaneously moving above a horizontal resistance.

Another way you could’ve adapted to limited chart data is by using the 30 & 40 week moving averages typically used on a weekly chart and applying them to the daily BODEGA chart. I actually did it this way, and find this to be a pretty interesting parallel as old ways work under new market conditions. You can see below how as that 30 day moving average crosses above the 40 day, BODEGA became bullish for a good trade.

Navigating Stage 2 Uptrends & Protecting From Losses

After we realize that BODEGA is on the move, and we add in to the trade, the two next best things we can do are protect our capital and let the trade ride. After a couple days of movement upward, I was in solid profit on this trade. First thing I needed to do was protect my capital and set a stop loss on Minswap at my break even point. This allows for BODEGA to basically fail the outbreak, go lower, and I still wouldn’t lose any ADA.

The second thing I did was have patience and let the trade ride. I actually had to let the trade ride for over two weeks as more and more daily candles pushed upwards in green momentum. As price continued upwards, I slowly moved my stop loss up only letting myself risk a 10% drawdown.

For example: I bought BODEGA at .212 ADA. As price moved up to .27 ADA, I moved my stop loss up to .24 ADA. This allowed me to have a trailing stop loss of about 10% and guarantees that even if the trade shifts momentum quickly, I still make some profit.

You can call this the easier part of the winning trade. You’ve already identified the entry point and made the trade, now you just sit back and make sure to protect your capital above all else.

Adding To The Position And Making Some Mistakes (That Cost Me 10%)

8% isn’t a bad profit for like maybe two weeks of work (and it isn’t really even work to be honest). But 8% pails in comparison to the fact that I was up over 20% on this trade. If I was even better I could’ve been up over 50% at one point.

So what did I do wrong (or could’ve executed better):

1. Buying earlier: I was a little late to the party buying at 0.212 ADA. I would have much rather bought at 0.18 ADA or maybe at 0.2 ADA.

2. Doubling Down: As price made its first retracement daily candle from 0.29 ADA to 0.26 ADA, I went ahead and locked in a 10% profit by selling half my BODEGA stack. As price wicked above 0.30 ADA, I had a buy order out there for BODEGA in case price action continued higher. As this order got filled, I also set a stop loss for 10% of that buy at around 0.27-0.28 ADA. As you can see below that stop loss was filled forcing me to close all positions.

Overall, I am pretty happy with this trade, and this method of adopting stage analysis to small cap crypto projects in the Cardano ecosystem. I will continue to mold this idea to play some other small cap projects that I see setting up in this same manner.

As with all things, this takes patience and timing and feel, and the best thing is that I didn’t lose any money to play around. I still think BODEGA can be a great buy and I am actively watching it on the daily chart to see if a new base forms around 0.22 ADA. If so, I will repeat the same trade over and over again, this time hopping in at a better time and not doubling down.

Some other projects that have similar charts and could possibly setup like this (although no guarantees just yet) are below:

NVL looks like a very early stage 1 (although the weekly chart isn’t showing as much confidence as the daily).

This memecoin has been rising consistently building a stage 1.

Thanks for reading even as the market is crumbling under our feet.

Dawson