BTC/USD Forex Signal - 8 May 2019

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Yesterday’s signals would have produced two long trades from bounces at support: the first one lost, the second one would still be open and in floating profit at the time of writing.

Today’s BTC/USD Signals

Risk 0.75% per trade.

Trades must be entered prior to 5pm Tokyo time Thursday.

Long Trades

  • Long entry at a bullish price action reversal on the H1 time frame following the next touch of $5,667 or $5,513.
  • Put the stop loss 1 pip below the local swing low.
  • Move the stop loss to break even once the trade is $50 in profit by price.
  • Remove 50% of the position as profit when the trade is $50 in profit by price and leave the remainder of the position to run.

Short Trades

  • Short entry after a bearish price action reversal on the H1 time frame following the next touch of $5,950 or $6,171.
  • Put the stop loss 1 pip above the local swing high.
  • Move the stop loss to break even once the trade is $50 in profit by price.
  • Remove 50% of the position as profit when the trade is $50 in profit by price and leave the remainder of the position to run.

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.

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BTC/USD Analysis

I wrote yesterday that the price was respecting technical levels which made it attractive to trade, topping earlier that day at the resistance level of $5,950.

I was ready to take a bullish bias if the price made a strongly bullish bounce at the nearest support level of $5,777. It did so and produced a small move up for a few hours, but the price quickly turned around and made that a losing trade. However, the lower support has continued to hold.

It is worth noting that despite the general continuation of the bullish situation, a short-term bearish double top was made precisely at my resistance level identified at $5,950.

A move down from here to the second support level at $5,667 looks quite possible, but I would be ready to take a bullish bias if there were a strong bounce there. I would also consider taking a short trade if there is another test and convincing rejection of $5,950.

btcusd

There is nothing important 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.