BTC/USD Forex Signal: Bullish Consolidation

Adam Lemon

BTC/USD: Long-term bullish trend

Yesterday’s signals were not triggered, as none of the key levels identified were reached.

Today’s BTC/USD Signals

Risk 0.50% per trade.

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

Long Trade Ideas

  • Long entry after a bullish price action reversal on the H1 time frame following the next touch of $12,288 or $12,105.
  • Put the stop loss $50 below the local swing low.
  • Adjust 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 ride.

Short Trade Idea

  • Short entry after a bearish price action reversal on the H1 time frame following the next touch of $14,058.
  • Put the stop loss $50 above the local swing high.
  • Adjust 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 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

I wrote yesterday that the former resistance level at $13,218 had been invalidated and the price had room to rise all the way to $14,058 before hitting another obvious resistance level. However, I also noted that the price was just moving up slowly and had been for a few days.

I still think it makes sense to look for a long trade, which might be found after a deep retracement to $12,288 or alternatively after a breakout to a new high above $13,368. The breakout method is probably safer, so I will be happy to enter a long trade if get two consecutive hourly closes above $13,368 provided the price is at a level which is not too close to the next resistance level at $14,058.

A bearish reversal at $14,058 might also be a good short-term short trade if the reversal is very strong.BTCUSDRegarding the USD, there will be a release of Durable Goods Orders at 12:30pm London time followed by Consumer Confidence data at 2pm.

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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