1. How to make money on cryptocurrencies?
2. Volume analysis of BTC from the Chicago Mercantile Exchange (CME).
3. Trend analysis
4. Japanese candlestick analysis
5. Conclusion. Statistics
1. How to make money on cryptocurrencies?
You should trade along with large market players. How do they work? Large market players use the daily time frame, since it takes time to accumulate and distribute large volumes. They work in the following sequence:
- accumulation for several days
- trend movement towards set profit targets for several days
- distribution - profit taking - for several days
- new accumulation for several days
These are cyclical events. Therefore, it is important for a trader to understand at what stage the market is at the moment and act accordingly. Let's consider each stage of the market separately. Today, we will take a closer look at the trend. After sufficient accumulation, major players begin to move the market towards their profit targets. What does a steady trend look like?
A strong upward trend has the following features:
- white candlesticks; the body of a candlestick is larger than its shadows; the price closes near local highs.
- the price strives to reach a new high every day.
- each new low is above the low of the previous day.
- the daily level of the highest traded volume (POC) consistently moves up.
During a downward trend, the movement is mirrored. For a trader, a trend is the best condition in the market. If you want to trade with large players, look for the start of a trend and join it. Hold your trades for as long as possible, as the trend can move for several days or even weeks. Take profit and exit the market when the trend ends. Remember that good trends occur once or twice a month, so take your time and carefully search for entry points to the market. If you want to open more positions, then trade several instruments. Place a large enough Stop Loss outside daily volatility levels, so that random market movements or false breakouts do not knock you out of the market. By doing so, you will trade along with major players, which means you will reap profits.
In the following articles, we will look at new market stages, as well as actions of major players. Now, let's analyze the current market.
2. Volume analysis of BTC from the Chicago Mercantile Exchange (CME)
So, there is a classic accumulation in the market (an image at the beginning of the article). The price moves up and down. The market is flat. However, after any flat there is often a trend that will give traders earning opportunities. A flat provides a great possibility for short-term trading in both directions, which can also be quite profitable. Let's consider the levels of the highest traded volume based on Bitcoin futures contracts from the Chicago Mercantile Exchange (CME). Large institutional companies and hedge funds trade bitcoin futures on this exchange. Notably, trades on the Chicago Mercantile Exchange are held on weekdays only.
18.03.21 – the level of the highest traded volume (POC – PointOfControl) – 58,560
19.03.21 – the level of the highest traded volume (POC – PointOfControl) – 58,225
On Friday, the POC moved down slightly. Today, the price is already below the two previous POC levels. This means that the upward trend is still unlikely. Bears are trying to push the price down. Profit taking occurs at rather high levels. In this light, there is an excellent opportunity for short-term intraday trading. Today, you can both buy and sell bitcoin on a rebound from the levels.
3. Trend analysis
A trend is your friend. Therefore, you should always trade with it. Even simple technical indicators can give you useful information on the current state of the market. The most important thing is to understand how to use it properly. In our analysis we turn to an exponential moving average (EMA):
Long-term trend – a blue EMA (1152 ) on the H1 chart, which is an alternative to EMA (48) on D1;
Mid-term trend – a red EMA (288) on the H1 chart, which is an alternative to EMA (48) on H4;
Short-term trend – a black EMA (48) on the H1 chart.
The price is above the three EMAs but close to EMA (48). This indicates a weak short-term trend. The three trends are in line. Thus, you can consider opening long positions.
4. Japanese candlestick analysis
Japanese candlestick analysis is a time-tested method of market analysis. You should study and use it in your trading. This way, your trading will become even more efficient. The analysis should be carried out on the daily time frame. Let's analyze yesterday's daily candlestick:
It is a hammer candlestick pattern with a long shadow and small body. The hammer is heading upward. An attempt to push the price down failed. Hammers pointing in different directions in the market have already been drawn for several days, which indicates that bulls and bears are equally strong. Therefore, you can consider opening short-term long and short positions.
5. Conclusion. Statistics
- Volume analysis – BUY/SELL
- Long-term trend – BUY
- Medium-term trend – BUY
- Short-term trend – BUY
- Japanese candlestick analysis – BUY/SELL
Conclusion: You can sell and buy BTC in a short term on March 22, since different types of analysis give different forecasts and the market is flat.
Always keep statistics on your trading, this will help you improve its effectiveness. Trades and analysis are carried out in four instruments: Bitcoin, Ethereum, Litecoin, and BCHUSD. Trading account monitoring:
Gains for two months of 2021: +12.21%.
Statement:
Current deals:
18.03.21 Bitcoin BUY: 58066 SL: 53800; Risk per deal: 1% of a $10,000 deposit with 0.02 lot.
09.03.21 Ethereum BUY: 1831 SL: 1619; Risk per deal: 1% of a $10,000 deposit with 0.48 lot.
A 1% risk will protect you from excessive worries. A Stop Loss is placed beyond the high/low of the day, depending on the direction of the trade. We do not set a Take Profit and move a Stop Loss above 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 generate profits!
