So today we are going to do something a little different. Normally, our standard intraday strategy dictates that we enter on any volatility in the bitcoin price at a breakout of our predefined key levels. We place a stop just the other side of our entry, and set and forget the trade. Recent action has been a bit flat, however, and so for today’s session we are going to widen out the range and play on the movement we see between support and resistance. So, with this said, here are the levels we are watching for today’s session, alongside a note about our predefined risk strategy going forward. First up, take a quick look at the chart.
As the chart shows, action in the bitcoin price throughout last night’s Asian session was pretty weak. One downside break aside, BTCUSD failed to register any dramatic change, and we enter today’s European session just a few pips below where we closed out yesterday. The levels we are watching today are in term support at 242.30, and in term resistance at 248.18. These two levels define today’s range.
We will look for price to reach support, and correct to the upside (i.e. bounce from support) to put us long towards in term resistance at 248.18. On this trade, a stop loss somewhere around 240 will leave us plenty of room to avoid a spike down through support, while also ensuring our risk remains smaller than our potential reward.
Looking the other way, if price reaches resistance to the upside, we will look for a downside reversal from this level to signal a short entry towards support. Once again a stop loss is required here, and somewhere around 250 flat looks to be a comfortable placement form a risk management perspective.
Charts courtesy of Trading View