BTC/USD Forex Signal

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Bitcoin: Weakly bullish above $8,173

Last Thursday’s signals produced a losing long trade from the bearish rejection of the resistance level at $8,095.

Today’s BTC/USD Signals

Risk 0.75% per trade.

Trades must be taken prior to 5pm Tokyo time Wednesday.

Long Trade Ideas

  • Go long after a bullish price action reversal on the H1 time frame following the next touch of $8,125 or $7,754.
  • Place 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 Trade Ideas

  • Go short after a bearish price action reversal on the H1 time frame following the next touch of $8,458 or $8,893.
  • Place 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 last Thursday that I would wait until the $7,750 level was reached before deciding whether to get involved here, but additionally I would be prepared to take a short-term short trade from a bearish rejection of $8,095 especially if that was confluent with a rejection of the trend line. The short from $8,095 and the trend line was a good call as it did give some profit, the problem there was that it didn’t quite come off the first time, so taking only the first set-up would have resulted in a loss.

The action of the days since Thursday has produced a more bullish picture, with the price not even making it to the key long-term supportive area at $7,750. The price turned, breaking above the formerly effective bearish trend line, and establishing a zone of new higher support based at $8,173. As long as $8,125 survives a test from above and produces a bullish bounce, it would make sense to take a weakly bullish bias later once that happens.

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There is nothing of high importance due today concerning the USD.

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy