Bitcoin, British Pound Update & Analysis.

Bitcoin makes a second attempt to push 12K and hesitates again going into the resistance area. In the process it has generated a second buy signal which further supports our swing trade long, but does not justify taking any more risk if you missed the original trade. In other markets, the U.S. Dollar has been sporting some strength which has helped to push some forex pairs into attractive reversal locations. One pair on our radar is the British Pound.

Since the holiday over the previous week, Bitcoin has been trading inside of a range which has tested as low as the 10,761. Corrective consolidations are very tricky in this way and people with little experience are most likely to get faked out both long and short. We have identified the wave structure and have adjusted our expectations. The long signal that we took was never negated and the ONLY thing we can do right now is WAIT for price to make another attempt toward our targets. The low 12K's is very reasonable within the context of this Wave 2 corrective sequence. If price cannot push much further than that, we may exit our entire swing trade altogether. If we do, we will promptly send out a text. The 11600 area was the high of a newly formed inside bar, and was taken out. This event generated a new buy signal BUT we chose not to call it for two reasons: 1) we are in a swing trade from a much lower price. 2) The reward/risk is not favorable within the context of the current price structure. Just because there is a buy signal, does not mean you buy. The current price location is more appropriate for day trades, not swing trades in terms of taking on any new risk. Our swing trade philosophy is based on capital preservation. This means we will be more selective with signals and make judgements that look to keep risk within a particular threshold. If you missed the original trade setup at 10952, then all you have to do is WAIT for the next qualifying signal. WAITING may be frustrating, BUT it is much better than taking loss after loss like most of the action oriented herd members who maintain no decision making structure and react to every single tick. It is especially important to be selective within a corrective consolidation like the one Bitcoin is in now. You don't have to be in every move to come out ahead in this game. Capital flows from the impatient to the patient. Which group do you belong to?

The U.S. Dollar has found renewed strength after the recent strong NFP report. This outcome reduces the chances of future interest rate cuts. This move has also pushed some forex pairs into locations where there is a much greater chance of a bullish reversal. The British Pound has been weak since the beginning of May which had a lot to do with Brexit drama. Since June, the pair has established a range 1.2750 and 1.2500. Currently price is testing the range low and this is where reward/risk gets very attractive. Keep in mind this pair can go as low as 1.2430 area and still be in a high probability area to reverse. The key here is to WAIT for a clear reversal pattern since the location alone is not enough to justify taking a risk. As Andrew has pointed out, you can try to get the best price, or best environment but you cannot have both. If this pair closes below the 1.2430 area, that would clear the way for much lower levels. Our objective is to look for a reversal pattern to go long somewhere between 1.2530 and 1.2430. Since it is a counter trend trade, it will be considered more aggressive, but when these work, they pay off well. The reason is all the trend followers get caught on the wrong side. Again WAIT for the signal. Premature entries are no different than gambling. Question and comments welcome.