BTC/USD Forex Signal - 8 February 2018

Yesterday’s signals produced a short trade from the bearish pin candlestick which rejected the descending trend line at about the time of the New York open. This trade could still be open and has given a maximum reward to risk profit so far of almost 2 to 1. If still open, it looks as if it could be in danger, as the recent price action is quite bullish and threatening to break above the descending trend line.

Today’s BTC/USD Signals

Risk 1.00% per trade.

Trades can be taken at any time before 5pm Tokyo time.

Long Trade

  • Long entry after a bullish price action reversal on the H1 time frame following the next touch of $6,811.

  • Put the stop loss 1 pip below the local swing low.

  • Adjust the stop loss to break even once the trade is $200 in profit by price.

  • Take off 50% of the position as profit when the trade is $200 in profit by price and leave the remainder of the position to ride.

Short Trades

  • Go short after a bearish price action reversal on the H1 time frame following the next touch of $8,912, $9,508, or the bearish trend line shown in the chart below currently sitting at about $8,267.

  • Put the stop loss 1 pip above the local swing high.

  • Adjust the stop loss to break even once the trade is $200 in profit by price.

  • Take off 50% of the position as profit when the trade is $200 in profit by price and leave the remainder of the position to ride.

The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

BTC/USD Analysis

Yesterday I highlighted the impulsive nature of the bullish move and the medium-term bearish trend line at about $8,500 which was likely to be a severe test for Bitcoin bulls. I thought that if the price could break above this level it would be a bullish sign. In fact, the price did continue to rise, but was unable to break the trend line. The price now looks to be making a new attempt at the trend line, which should continue to be pivotal. If the price can now get established above the trend line, it will be a significantly bullish sign. The recent 25% recovery in price over the past few days has shown there seems to be life in Bitcoin yet, I was probably wrong to write it off as likely to deflate still further in my forecast a few days ago.

BTCUSD

There is nothing due today concerning the USD.

Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment. Learn more from Adam in his free lessons at FX Academy.