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.
08.03.21 – the level of highest horizontal volume (POC – PointOfControl) – 522
09.03.21 – the level of highest horizontal volume (POC – PointOfControl) – 532
The POC has moved up. The price level is above the POC. The upward trend seems to have 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 open short positions.
The price is in line with the EMA (48). The long-term trend is flat. In this situation, you may open long and short trades.
3. Medium-term trend analysis.
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 the EMA (48). The medium-term trend is upward. Therefore, it is recommended to open long 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 above the EMA (48). The short-term trend is upward. The long-term, medium-term, and short-term trends do not coincide. It is recommended to open long trades.
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 upwards, the candlestick is white. Its high is above the high of the previous candlestick. An upward movement looks likely.
6. Conclusion.
1. Volume analysis: BUY.
2. Long-term trend: BUY SELL.
3. Medium-term trend: BUY.
4. Short-term trend: BUY.
5. Japanese candlestick analysis – BUY.
Conclusion: On March 10, you can open 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:
Monthly gain in February 2021: +10.93%.
Statement:
At the moment, we keep the position:
26.02.21 BCHUSDSELL: 465.86; SL: 568; Risk per deal: 1% of a $10,000 deposit with 0.96 lots.
Stop-loss orders for new trades can be placed beyond the daily extreme point. We do not set Take-profit orders, as we will continue to move SL beyond the extreme points of 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!
