SPONSORED ARTICLE: Tech Analysis articles are sponsored by SimpleFx – “Keep it simple!” , SimpleFX is a robust online trading provider, offering trading with Forex CFDs on Bitcoins, Litecoins, indices, precious metals and energy. Offers and trading conditions simple and transparent. It’s Tuesday morning, and time to take the first of our two looks at the action in the bitcoin price for today. Before we do, let’s take a quick look at what happened overnight, as this is going to influence how we approach the markets this morning. Specifically, action last night formed something of a head and shoulders pattern on the five-minute chart. A head and shoulders forms when we get a peak, a dip, a higher peak, which then dips into another peak similar in height to the first, but not as high as the second. It’s a classic reversal pattern, and gives us an immediate downside bias heading into the session this morning. This doesn’t mean we are going to go exclusively short with our trading, but it does mean we can be a little more aggressive on our short entry than we will be on our long trade. So, how do we trade the pattern? It’s pretty simple. The pattern completes when price breaks below the neckline, which is the horizontal point at the dip of the first or last peak, whichever is lower. In this instance, the neckline is at 603 flat. This level is also going to serve as our in term support for the day’s session, although we won’t use it for anything other than a downside break entry. Resistance comes in at 606, and this is far too tight a range to go at price intrarange. The chart below shows the pattern and the key levels for the session. So, […]
