BTC/USD Forex Signal - Thursday, Dec. 20

Yesterday’s signals produced a short trade from the bearish engulfing candlestick structure which rejected the resistance level at $3,925, but this did not fall far enough to reach break even so resulted in a losing trade when the action turned bullish later.

Today’s BTC/USD Signals

Risk 0.75% per trade.

Trades may only be taken before 5pm Tokyo time today.

Long Trades

  • Long entry after a bullish price action reversal on the H1 time frame following the next touch of $3,593, $3,450, or $3,274.
  • Place 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 run.

Short Trades

  • Short entry after a bearish price action reversal on the H1 time frame following the next touch of $4,055 or $4,374.
  • Place 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 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 yesterday that the picture had become more bullish still, with another strong move and a break above former resistance. We saw the price holding up quite firmly and new higher support levels. I was ready to take a bullish bias here if we had gotten a retracement back down to about $3,600 followed by a strong bullish bounce. This wasn’t a bad call as the price eventually made a low at $3,637 just a little above that before making another strongly bullish movement up to the $4,000 area.

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