1. Analysis of BCHUSDT volume on Binance
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. Conclusion
7. Statistics
1. Analysis of BCHUSDT volume on Binance
The analysis is based on the horizontal volumes data on daily charts on the Binance exchange. 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 highest trade volume is the level with the largest number of transactions carried out. That is, it is the level of major market players. Accordingly, if the highest trade volume level goes up, it indicates an upward trend. Otherwise, if the highest trade volume level goes down, it indicates a downward trend. Chaotic movements signal that the market is trading flat.
05.03.21 – the level of highest horizontal volume (POC – PointOfControl) – 507
08.03.21 – the level of highest horizontal volume (POC – PointOfControl) – 522
The POC has moved up. The price level is above the POC. The upward trend seems to have just started. Thus, you can open long positions.
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 a trend. Thus, your trades will have more profit potential with less risk. According to the classic Dow theory, there are three main trends:
long-term
medium-term
short-term
These are the trends you should analyze before entering the market. Now, let's take a closer look at them.
The long-term trend is the daily trend. In this case, deals are made in the daily time frame and are held for several days. The analysis of the daily trend is made with the help of the 48-period exponential moving average (EMA(48)). If the daily candlestick closes above EMA(48), it will indicate the upward trend. Therefore, you should enter long. If the daily candlestick closes below EMA(48), then it is the downward trend and you should enter short.
The price is above EMA(48). It is a long-term sideways trend. Thus, you can open both long and short positions.
3. Analysis of the 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 above EMA(48). We have a mid-term upward trend. Therefore, you should open long positions.
4. Analysis of the short-term trend
A short-term trend is the trend in the H1 time frame. Moreover, it can show an entry point into the market well. We will turn to EMA(48) again. If the candlestick closes above EMA(48) on the H1 chart, it will indicate the upward trend. Thus, you should enter long. Alternatively, if the candlestick closes below EMA(48), it will indicate the downward trend. Consequently, you should enter short.
The price is above EMA(48). It is the short-term upward trend. Thus, you should open buy deals. The long-term, the medium-term, and short-term trends coincide.
5. Japanese candlestick analysis
A classic Japanese candlestick analysis is applied to the daily time frame. In this particular analysis, we will also look at the daily candlestick.
We have a white upward daily candlestick. Its high is above the high of the previous candlestick. The upward movement is highly likely.
6. Conclusion
- Volume analysis – BUY
- Long-term trend – BUY/SELL
- Medium-term trend – BUY
- Short-term trend – BUY
- Japanese candlestick analysis – BUY
Conclusion: You can both sell and biy the pair on March 09, 2021.
7. Statistics
To analyze how effective this approach is, the data on completed transactions is tracked. The forecast is made for four instruments: Bitcoin, Ethereum, Litecoin, and BCH/USD. Trading account monitoring:
February 2021 gain: +10.93%
Statement:
Current deals:
26.02.21 BCHUSDSELL: 465.86; SL: 568; Risk per deal: 1% of a $10,000 deposit with 0.96 lots.
A Stop Loss for new deals should be placed beyond the daliy extreme points. We do not set a Take Profit because we are going to move a Stop order beyond the extreme points of the upcoming sessions.
Since trading is carried out on daily charts, this recommendation is relevant throughout the day.
Trade with the trend and you will reap profit!
