Another week, another beautiful trade. Now is the time to be practicing your investing as the rest of the market is asleep at the wheel. This turbulent environment has been a blessing in disguise as I have had more time to read, learn, and experiment, and I want to share with you amazing people how I traded NVL for a profit last week that is currently still rolling gains.

As of writing this, I am in about a 30% profit with a stop loss at about 20% profit. This makes me feel easy and calm knowing that if price flips downward, I will lock in the 20% gain, and if price continues much higher (which I am doubtful of right now), I will keep printing return.

But how did I do this and how can you replicate it?

Identifying The Winning Setup: Stage Analysis

I initially start (and I do this on a daily/weekly basis) by combing through the entire CNT (Cardano native token) market looking for assets that have been in a stage 1 accumulation zone after a stage 4 decline and could be ready for somewhat of a stage 2 breakout.

If all those words sound like weird gibberish, read this.

I have found that stage analysis, when applied to small crypto markets, can be a profound way to catch swings in altcoins. As I was filtering through the opportunities within Cardano, NVL caught my attention. It had my attention for the past 2-3 weeks as it rose from its local low at around 0.78 ADA up to around 0.9-1 ADA.

This rise showed me that NVL was doing a few things counter to its previous history and the rest of the CNT market. NVL was pushing above its 30 & 40 day moving average for the first time in 155 days. This seemed significant.

It wasn’t just significant that it broke above, but that it also held the moving averages and continued durably grinding slowly higher. You will notice a large down sloping trend line connecting previous breakout attempts of NVL along the moving average. I decided this would be my resistance point for a breakout buy for a few reasons:

1. Price was holding the 30 day SMA signaling a shift in trend

2. The moving averages were horizontal and not trending downward

3. Down sloping resistance look like the stage 1 base breakout trend line

As you can see above, NVL did break out from the trend line moving higher over the next few days. I put my buy of 250 ADA in at 1.05 ADA for NVL (right where the blue price signal is) catching that breakout as quick as possible. As I made this trade, I also put a stop loss on the position at .98 ADA for NVL giving me a risk of about 6-7% for down side loss if the trade didn’t pan out. This would protect my total capital if needed.

Over the next few days, as price continued higher, I simply moved my stop loss up to keep within about a 10% distance from the current price to guarantee I won’t lose money on the trade. As of today, NVL is sitting at about 1.38 ADA, I am in about 31% profit, my stop loss is sitting at 1.26 ADA securing a 20% profit, and I am waiting to see what NVL decides to do. The price could build a new base above the 1.26 ADA area and then head higher, it could drop drastically, or it could stall out sideways. The market will tell me what to do.

Risks Of This Trade And How I Changed My Game Plan To Navigate Them

With every trade or investment you take, there are risks associated. This is one area that I think I have become much more aware of over the past few months. Some key risks prevalent in this NVL trade were:

1. Lots of overhead resistance, which we still haven’t broken through at the 30 & 40 week SMA

2. Lower volume than desired indicating not as strong of a breakout

3. Turbulent market showing uncertainty which can lead to whipsaw action

All of these risks were accounted for before the trade and mitigated through a patient stop loss regiment. A few things I did to counter these risks were:

1. Use a consistent stop loss initially very tight at 5-7% of the trade to limit downside on the breakout

2. Move said stop loss up as new resistance levels were formed to guarantee profits around 10% below price

3. Patience with the entry point - not rushing to enter but letting the market show me that something real is happening here

4. Understanding key overhead resistance on a weekly level (like the below chart) that can cause problems for consistent gains

Future CNT’s With The Same Potential Setup

Just as this CNT came into a good buy zone, so will many more. Like waves on the ocean and wind in the trees, there is always another opportunity. I don’t know if these below charts will follow the same pattern, but they are resembling some similar setups, and I am watching them on a daily basis.

If the chart setups fail. I will simply discard the ideas for now.

XER:

• Solid stage 1 base formation that broke out a bit and is retesting the moving avg

• Decent volume on breakout followed by smaller volume

• Be patient and wait for further confirmation of breakout without being too eager

• I am targeting 0.01015 as a good buy point with a stop loss under the 30 day MA

AGIX:

• Broke out of a 170 day downtrend building and breaking out of a stage 1 base

• Big downward trend line that has been broken to the upside

• Price over 30 & 40 day SMA and SMA is horizontal (not downward)

• Waiting to see if price retests MA or starts to head higher

• I might buy at about 0.36 ADA with a stop loss around -10% or less

If you want to read further on this topic, this is the book I recommend and follow:

Thanks,

Dawson