1. Analysis of bitcoin futures volumes from the Chicago Futures Exchange (CME)
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. Analysis of bitcoin futures volumes from the Chicago Futures Exchange (CME)
The analysis uses data on horizontal volumes from the Chicago Futures 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.
03/12/21 – The level of the maximum horizontal volume (ROS-Point Of Control) – 56960
03/15/21 – The level of the maximum horizontal volume (ROS-Point Of Control) – 56475
The ROS has moved down, the price is below the ROS level. Perhaps a sideways movement has started, you can buy and sell.
2. Analysis of the long-term trend
A trend is a trader's 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. 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 time frame, and will be 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 closes above the EMA (48), it means that we are facing an upward trend and should buy. If the daily candle closes below the EMA (48), it means that the trend is downward and should be sold.
The chart shows an upward trend, the price is higher than the EMA (48), so in this situation, it is worth considering purchases.
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 closes above the EMA (48), then the trend is upward and you should buy. If the H4 candle closes below the EMA (48), it means that the trend is down and you should sell.
Price per EMA (48). The medium-term trend is sideways, 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 closes above the EMA (48), it means that the trend is upward and you should buy. If the H1 candle closes below the EMA (48), it means that the trend is downward and should be sold.
The price is lower than the EMA (48). Short-term trend – downtrend, you can 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 down, the candle is black. The minimum is lower than the minimum of the previous candle. The candle configuration is a hammer pointing up, but the minimum has already been broken. Probably a downward movement.
6. Conclusions
Volume analysis is BUY SELL
The long-term trend is BUY
The medium-term trend is BUY SELL
The short-term trend is SELL
Japanese Candlestick Analysis is SELL
General Conclusion: 03/16/21- 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, BCH USD. See other articles. Monitoring your trading account:
The result for the two months of 2021 is +12.21%.
Regulation:
We do not open new deals, there is no certainty in the market. 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.
Trade on the trend, and you will have a good profit!
