Polygon Trade Alert - MATIC Setting Up For A Potential Rally!
Breakout Trading
One of the most effective trading strategies is that of a breakout trader. Searching the charts for signs of resistance areas being broken has often proven to be a rather effective strategy for many traders, as well as myself. Support and resistance are two very key aspects of trading, regardless of the strategy. After an extended period of realizing lower lows, Polygon (MATIC) has finally broken above what was previously resistance.
For this move to become a trading opportunity, we need to see this level being retested and, eventually, flipped into support. This will ultimately set the stage for a solid long opportunity. One of the most attractive aspects of opening long positions during the initial stages of a bull market is “trade security”. In other words, even if the market moves against your trade, eventually, it will move in favor of it.
This is due to the bias being predominantly bullish over an extended period. Furthermore, opening a long position with the additional confluence of a breakout, and even better… a breakout confirmation, increases the probabilities of success quite substantially. The greater the confluence, the better. It increases your odds and, in many ways, is a self-fulfilling prophecy.
It appears somewhat likely that a confirmation or rejection of this breakout is likely to be confirmed within the next few days. It’s definitely worth keeping an eye on. Referring to the screenshot above, I would be looking at the horizontal yellow line as my initial target. Polygon is likely to face resistance at this point.
A scenario such as this often provides an initial opportunity to realize profits. Once that level of resistance has been conquered, traders can again look at re-opening or adding to their existing positions. That is the safest way to navigate a trade… always pay attention to the next level of meaningful rejection or support, depending on if you are going long, or short.
Final Thoughts
As I mentioned, the initial stages of a bull market provide great opportunities for long traders. Corrections are often just that… merely corrections, prior to a continuation higher. If you consider this dynamic in reverse, it’s similar to going short at the peak. In other words, opening a short position at $65K in 2021 would have initially seen your trade entering a losing streak as BTC moved higher to approximately $69K. However, this was momentary.
The price then continued to correct all the way to $15.8K, making it an extremely profitable trade. Even if long positions enter a period of loss at current levels, it is unlikely that they continue in that direction. The long-term trajectory is now bullish, and bearish moves essentially don’t have much-staying power.
Anyway, these are merely my thoughts. I am definitely keeping an eye on Polygon at these levels. It seems rather likely that a reversal is in play and could offer some really profitable trading opportunities. All the best, catch you next time!
Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.
