#tradingplan #breakouts #priceaction #CryptoStrategy #RiskManagement
Most losses come from chasing the first green candle. This simple “3‑candle test” forces patience, confirms real participation, and keeps entries aligned with trend.
Why this works
Strong moves show follow‑through, not just a single impulse.
Volume and structure across three candles filter out news spikes and thin‑book wicks.
How to apply it
Setup
Timeframe: 1h for active traders, 4h for swing entries.
Level: Prior weekly high (or clear range top) is your line in the sand.
The test
Candle 1 — Break: Close above the level with volume ≥ 120% of the 20‑period average.
Candle 2 — Hold: Next candle must close above the level again. Lower wick into the level is fine; body must hold.
Candle 3 — Follow‑through: Makes a higher high vs Candle 1 close and finishes green or small‑red with higher low.
Only if all three conditions pass:
Enter at or just after Candle 3 close.
Place stop below the lowest wick of Candles 1–3 (structure stop).
If any step fails, stand down and re‑alert. No partial entries.
Position management
Add-on: After a clean retest that forms a new higher‑low on the same timeframe.
First take‑profit: Trim 25–30% at the nearest supply zone or measured move equal to the height of the broken range.
Trailing stop: Move under each successive higher‑low; never widen stops.
When to skip even if the test passes
BTC dominance spiking while BTC is red (broad risk-off).
ETH/BTC rolling over if rotating into alts.
ETF flows printing a second consecutive red day.
Best pairs to use it on
ETH and liquid leaders (SOL, LINK, strong L2 tokens).
Major DeFi perps with steady volume.
Avoid illiquid mid-caps unless volume is clearly expanding.
Checklist to paste on your chart
Level marked? Prior weekly high/range top.
Volume on Candle 1 ≥ 120% 20‑MA?
Candle 2 closes above level?
Candle 3 makes higher high and holds?
Stop = lowest wick of 1–3.
Alerts set for retest and first target.