1. ETHTUSD volume analysis on the Binance Exchange.
2. Analysis of the long-term trend.
3. Analysis of the medium-term trend.
4. Analysis of the short-term trend
5. Japanese candlestick analysis.
6. Conclusions.
7.Statistics.
1. ETHTUSD volume analysis on the Binance Exchange.
In this analysis, we will use the data on horizontal trading volumes from the Binance Exchange on the daily charts. The analysis is based on the footprint-profile theory. According to it, the direction of the level with the highest traded volume during the day can indicate the possible direction of the trend. The level with the highest traded volume is the level where the maximum number of transactions was made. This is the level of major market players. Accordingly, if the maximum volume level moves higher, this indicates an uptrend. A downward movement of this level indicates a downtrend. Chaotic movement signals that the market is trading flat.
20.02.21 – The level of the maximum traded volume (POC – PointOfControl) – 2000
21.02.21 – The level of the maximum traded volume (POC – PointOfControl) – 1950
POC has moved lower, and the price is holding below the POC level. A sideways movement may have started, so you can both go long and short.
2. Analysis of the long-term trend.
A trend is your friend. Many traders know this saying but do not know how to use it. The answer is simple: trade only in the direction of the trend. This way, your trades will have more profit potential with less risk. The classic Dow Theory describes three main trends:
long-term;
medium-term;
short-term.
You need to analyze these trends before opening any trade. This is what we are going to do in the analysis below.
A long-term trend is a trend on the daily chart. Trades will be opened on the daily time frame and held for several days. The analysis of the daily trend is carried out with the help of the EMA(48), an exponential moving average with a period of 48. If the daily candlestick closes above the EMA (48), then we have an uptrend and we should open buy positions. If the daily candlestick closes below the EMA (48), then there is a downtrend and we should go short.
We can see a clear uptrend on the chart. The price is holding above the EMA(48), so we recommend opening long positions.
3. Analysis of the medium-term trend.
In our analysis, a medium-term trend will be the trend on the 4-hour chart (H4). EMA(48), an exponential moving average with a period of 48, will also be used for analysis. If the H4 candlestick closes above the EMA(48), then we have an uptrend and we should open buy positions. If the H4 candlestick closes below the EMA(48), then there is a downtrend and we should go short.
The price is holding above the EMA(48), so you can both buy and sell.
4. Analysis of the short-term trend.
A short-term trend that can also show an entry point into the market is considered a trend on the H1 time frame. Here, we will again use the EMA(48), an exponential moving average with a period of 48. If the H1 candlestick closes above the EMA(48), then there is an uptrend and you should open buy positions. If the H1 candlestick closes below the EMA(48), then there is a downtrend and you should go short.
The price is holding below the EMA(48). The short-term trend is moving down. The long-term, medium-term and short-term trends are moving in different directions. So, you can both buy and sell.
5. Japanese candlestick analysis.
The Japanese candlestick analysis is applied to the daily time frame. In this analysis, we will also analyze the daily candlestick.
The daily candlestick marked with black closed lower. Its low is located below the low of the previous candlestick. The candlestick pattern is in the shape of a hammer. An uptrend is very likely.
6. Conclusion
- Volume analysis – BUY SELL.
- Long-term trend – BUY.
- Medium-term trend – BUY SELL.
- Short-term trend – SELL.
- Japanese candlestick analysis – BUY.
General conclusion: On February 22, 2021, you can go long and short.
7. Statistics
To analyze the effectiveness of this approach, we will keep the data on completed transactions. We prepare forecasts and open our trades on four major instruments: Bitcoin, Ethereum, Litecoin, and BCH/USD. Please, check other articles regarding this topic.
We gained +11.34% in February 2021
Statement:
Trade: 09.02.21 Ethereum BUY: 1781.35; SL: 1808.67, was closed with stop trade with the gain of +0,03%.
Do not open a new trade as the situation is uncertain in the market. When opening new positions, you should place Stop Loss beyond the daily extreme points. Do not place Take Profit, as we will continue to move Stop Loss beyond the extreme points in the future sessions. Since the trade is carried out on the daily charts, the recommendation remains relevant throughout the day.
Trade with the trend and you will gain profit!
