As far as rough days in the market go, this has been one of the worst. We noted in this morning’s bitcoin price watch piece that the action we’ve seen over the last few days in the market had been a bit difficult to trade. Sideways action dominated, and the only real movement we saw were spikes in and out of the ranges we defined. We have managed to pull a couple of profitable trades out of this sort of action, but only by keeping our targets extremely tight and maintaining some even tighter risk management principles. Well, today we tried to do the same, but things haven’t worked out as well as we’d hoped. Price broke through our predefined resistance level shortly after we published our first analysis and this gave us a long entry signal. We got in long towards a tight upside target, but almost as soon as we entered, price reversed and we traded back within range to take out our stop loss. Price then did pretty much exactly the same, but this time on a break of support and a short entry. Two entries, one up one down, both taken out for a loss.
The losses were kept to a minimum by our tight risk parameters, but it’s a little frustrating nonetheless.
Anyway, enough of that, let’s get to this evening’s strategy. Take a look at the chart below – it shows today’s action and has this evening’s parameters overlaid in green.
As the chart shows, we are widening out our range a little to accommodate today’s swings. In term support now comes in at 651, while resistance sits at 660 flat.
As usual, if price breaks support, we will look to enter short towards a downside target of 645. If we get a break to the upside, and a close above resistance, we will get in long towards 667. Stops just the other side of the entry to define risk.
Charts courtesy of SimpleFX