BTCUSD : Break Up Of The Resistance + Trendline And Retest

Since the previous idea the price action for BTCUSD made a rebound from the 6900 area and reached the profit target set at 7452. Congrats for those who followed this idea.

Overview: The price action is currently recovering from the previous drop. Traders have to be cautious since we are still in a bearish trend. In lower timeframes the price action broke the 7450 resistance with a head and shoulders pattern. The price action is currently retesting this resistance (becoming support if it succeed) giving traders an opportunity to take a long position (i.e. entry price around 7475).
In the indicator side, we can notice that the RSI broke the bearish trendline which has formed since Nov, 06th. The upward break of this trendline is an another bullish sign for a continuation of the upward movement.

Risk management: to anticipate a potential failure of the support level and the associated downward movement, a tight stop loss can be set around 7359.2 which is slightly below the previous daily candle low. Considering the actual entry price (i.e. 7475) a first profit target can be set around the first resistance (i.e. 7753). A second profit target can be set around the second daily resistance (i.e. 8087). Considering the initial stop loss (i.e. 7359.2) and the second profit target, this gives traders a decent R/R ratio of about 3.11 for this trade.

My Trading Principles:
- Risk/Reward ratio: since it is difficult to predict every market movement, it is suggested for traders to only look for trades with a R/R ratio of at least 1:3.
- Stop loss: in addition of the initial stop loss, if the price actually goes as predicted, traders should keep a trailing stop to keep some profit.
- Position Sizing: it is suggested for traders to stick to their position sizing strategy. As a rule of thumb, most retail investors risk no more than 2% of their investment capital on any one trade.
"Remember, plan the trade, trade the plan. Build that discipline."

I might keep updating this trade according to the future price action.

Please support this idea with your likes, thanks.

Best regards,

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Trade active:

The first profit target has been reached ! Congrats for those who followed the call

Trade closed: stop reached:

Trailing stop reached at 7645.1 which close this trade with a 3.83% benefit for the first profit target (35% of the position size) and a 2.26% for the trailing stop (100% remaining position size).

This has been a quick trade with a good reward especially given that we are trading against the current trade.

From now on we have to wait for new buy opportunity.