1. Analysis of ETHT/USD volume on Binance exchange.
2. Long-term trend analysis.
3. Medium-term trend analysis.
4. Short-term trend analysis.
5. Japanese candlestick analysis.
6. Conclusions.
7. Statistics.
1. Analysis of ETHT/USD volume on the Binance exchange.
In this analysis, we will use the data on horizontal trading volume from the Binance exchange on daily charts. The analysis is carried out based on the footprint-profile theory. According to the theory, the direction of the horizontal level with the highest trade volume within a day can indicate the likely direction of the trend. The level with the highest traded volume is the level where the maximum number of transactions has been made. This is the level of a major market player. Thus, if the maximum volume level moves higher, this indicates an uptrend. A downward movement of this level indicates a downtrend. A chaotic movement signals that the market is trading in a sideways trend.
15.02.21 – The level of the maximum traded volume (POC - Point Of Control) – 1950
16.02.21 - The level of the maximum traded volume (POC - Point Of Control) – 1848
The POC has moved down. The price is below the POC level. The market seems to start moving sideways, so you can open long positions.
2. Long-term trend analysis.
A trend is the trader's friend. Many market participants are aware of this saying. However, they do not know how to use it. The answer is simple: trade only in the direction of the trend. In this case, 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.
The long-term trend in this analysis is a daily trend. Trades will be made on the daily chart 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 candle closed above the EMA (48), it means that we are facing an uptrend and should open long positions. If the daily candle closed below the EMA (48), it means that the trend is downward and we should open short positions.
The price is above the EMA (48). The chart shows the sideways trend. In this situation, you may open short and long trades.
3. Analysis of medium-term trend
The medium-term trend is the trend on the 4-hour chart (H4). In this case, we will also turn to EMA (48). If the candlestick closes above EMA (48) on the 4-hour chart, it will indicate the upward trend. Thus, you should enter long. Otherwise, if the candlestick closes below EMA (48) on the H4 chart, it will indicate the downward trend. Consequently, you should enter short.
The price is below the EMA (48). We have a downward trend. Therefore, it is recommended to open short positions.
4. Short-term trend analysis.
In this analysis, the short-term trend is a trend on the H1 chart. It can show a point where we can enter the market. Here, we will again use the EMA (48) - an exponential moving average with a period of 48. If the candlestick closes above the EMA (48) on H1, this means that the quotes are trading upwards and we should buy. If the candlestick closes below the EMA (48) on H1, this indicates that the trend is downward and we should go short.
The price is below the EMA (48). The short-term trend is downward. The long-term, medium-term, and short-term trends do not coincide.
5. Japanese candlestick analysis.
The classic Japanese candlestick analysis is applied to the daily trading chart. In this analysis, we will also analyze the daily candlestick.
The daily candlestick closed downwards, the candlestick is black. Its low is below the low of the previous candlestick. It is a hammer candlestick pattern heading upward. The low of yesterday's candlestick has already been broken. A sideways movement looks likely.
6. Conclusions.
- 1.Volume analysis: BUY SELL.
- 2.Long-term trend: BUY SELL.
- 3.Medium-term trend: SELL.
- 4.Short-term trend: SELL.
- 5.Japanese candlestick analysis – BUY SELL.
Conclusion: On February 23, you can open both long and short positions.
7. Statistics.
To analyze the effectiveness of this approach, we will keep the data on completed transactions. The forecast is made for four instruments: Bitcoin, Ethereum, Litecoin, and BCH/USD. Trading account monitoring: Trading account monitoring:
February 2021: +10.93%.
Statement:
Do not open a new trade as the market situation is uncertain. 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 trading is carried out on daily charts, this recommendation is relevant throughout the day.
Trade with the trend and you will make a profit!
