1. Volume analysis for the BCHUSD instrument from 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 candle analysis.
6. Conclusions.
7. Statistics.
1. Volume analysis for the BCHUSD instrument from the Binance exchange.
The analysis uses data on horizontal volumes from the Binance exchange on daily charts. The analysis is based on the "Footprint Profile" theory, in which the movement of the maximum volume level for the day can indicate the likely direction of the trend. The maximum volume level is the level at which the maximum number of transactions was made, that is, the level of a large player. Accordingly, moving the maximum volume levels up indicates an upward trend. Moving the maximum volume level down indicates a downward trend. The chaotic movement of the maximum volume levels indicates a flat in the market.
02.03.21 – level of the maximum horizontal volume (POC - point of control) – 530
03.03.21 – level of the maximum horizontal volume (POC - point of control) – 519
The POC has moved down and the price is below the POC level. Perhaps a downward movement has begun, then you can sell.
2. Analysis of the long-term trend.
A trend is a trader's friend. Many traders know this saying, however, they 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. According to the classical Dow theory, there are three main trends:
- long-term;
- medium-term;
- short-term.
It is all these trends that need to be analyzed before opening any transaction. In this analysis, we will do this.
The long-term trend in this analysis is the daily trend. Trades will be made on a daily timeframe and held for several days. The daily trend is analyzed using 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 upward trend and should buy. If the daily candle closed below the EMA (48), it means that the trend is downward and should be sold.
Price per EMA (48). The long-term trend is sideways, then you can buy and sell.
3. Analysis of the medium-term trend.
In this analysis, the medium-term trend will be the trend on the 4-hour chart (H4). The EMA (48), an exponential moving average with a period of 48, will also be used for the analysis. If the H4 candle closed above the EMA (48), it means that the trend is upward and you should buy. If the H4 candle closed below the EMA (48), it means that the trend is downward and should be sold.
Price per EMA (48). The medium-term trend is sideways, then you can buy and sell.
4. Short-term trend analysis.
The short-term trend, which can well show the entry point to the market, will be considered a trend on the H1 timeframe. The EMA (48), an exponential moving average with a period of 48, will help us. If the H1 candle closed above the EMA(48), it means that the trend is upward and you should buy. If the H1 candle closed below the EMA (48), it means that the trend is downward and should be sold.
Price per EMA (48). The short-term trend is sideways, then you can buy and sell. Long-term, medium-term, and short-term trends do not coincide.
5. Japanese candle analysis.
The classic Japanese candlestick analysis is used for the daily timeframe. In this analysis, we will also analyze the daily candle.
Closing the daily candle up, the candle is white. The maximum is higher than the maximum of the previous candle. The candle configuration is a downward-pointing Hammer. Probably a sideways movement.
6. Conclusions.
- Volume analysis - sell.
- Long-term trend - buy sell.
- Medium-term trend - buy sell.
- Short-term trend - buy sell.
- Japanese candlestick analysis - buy sell.
- General conclusion: 04.03.21 - you can buy and sell.
7. Statistics.
To analyze the effectiveness of this approach, statistics on completed transactions are kept. Forecasts are made and transactions are made on four instruments: Bitcoin, Ethereum, Litecoin, BCHUSD.
The result for February 2021 is +10.93%.
Regulation:
This transaction is open:
26.02.21 BCHUSDSELL: 465.86; SL: 568; Risk per trade:1% of the deposit. With a deposit of $ 10,000, the lot is 0.96.
For new trades, the stop loss is located behind the daily extreme. We do not set a take profit, as we will accompany the transaction by moving the stop loss beyond the extremes of the new days.
Since trading is conducted on daily charts, this recommendation is relevant throughout the day.
