BTC/USD Forex Signal - 22 October 2019

Adam Lemon

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.

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.

btcusd

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

About the Author
Adam Lemon

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

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