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?
In order to reap steady profits, a trader should have a portfolio of trading strategies. The portfolios should contain the most diverse uncorrelated trading strategies. Let us consider some types of trading strategies that you can expand your portfolio with:
- Trend trading strategies. They track the trend and look for entry points to continue the trend. It is common for prices to move with the trend that reverse. This feature is used by trend trading strategies. Trading with the trend can be good for novice traders because it is the easiest strategy.
- Corrective trading strategies. They also trade with the trend, but look for an entry point after a correction. Since corrections can be deep enough, it is more profitable to enter long positions after the price has dropped slightly and is not at its highest level. The difficulty with corrective strategies is how to accurately determine the end of the correction. Their advantage is the use of a short stop loss.
- Flat trading strategies. Most of the time, prices move in the corridor. That is why, traders should have trading strategies that trade in the corridor. When the market is flat, the price is squeezed between two levels and can bounce off them several times. The trader can look for entry points when the price bounced off the boundaries of the corridor with targets within the range.
Using different trading approaches, you can create several different trading strategies and build a trading portfolio. While the market is flat, flat trading strategies can bring you profit, and trend strategies can bring losses. When there is a trend in the market, it will be the other way around. But the portfolio equity curve will be more stable and smoother.
2. Volume analysis of BTC from the Chicago Mercantile Exchange (CME)
Bitcoin is flat at its highs. It cannot go up and the correction has not been strong enough. Let us consider the levels of the highest traded volume from the Chicago Mercantile Exchange (CME). These levels indicate bullish activity.
14.04.21 – the level of the highest traded volume (POC – PointOfControl) – 63,970
15.04.21 – the level of the highest traded volume (POC – PointOfControl) – 63,170
The POC has moved down. The price is below yesterday's level of the highest traded volume. The market has entered a sideways correction. Based on volume analysis, you can buy and bitcoin today.
3. Trend analysis
Our second step is to check the short-term, the mid-term, and the long-term trends. You can enter positions when all three trends are in line. In this forecast, the trend is analyzed with the help of an exponential moving average:
Long-term trend – a blue EMA 1152 on the H1 chart, which is an alternative to EMA 48 on the D1 chart;
Mid-term trend – a red EMA 288 on the H1 chart, which is an alternative to EMA 48 on the H4 chart;
Short-term trend – a black EMA 48 on the H1 chart.
The price is well below EMA 48. The market has entered a sideways correction. The long-term trend, the mid-term trend, and the short-term trend are not in line. Therefore, you can enter long and short positions today.
4. Japanese candlestick analysis
Japanese candlestick analysis is the third step of this trading strategy. Let us analyze yesterday's daily candlestick:
Yesterday's white candlestick closed upward. Its extreme points are within the extreme points of the previous day. It is a candlestick pattern with a short body and shadows. There is a balance of powers in the market. According to Japanese candlestick analysis, you should consider entering both 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 buy and sell bitcoin in a short term on April 16, 2021, since various analyses provide different forecasts.
Only statistics can reveal how efficient a trading strategy is. In this forecast, trades are carried out in a separate account. Trades are conducted in four instruments: Bitcoin, Ethereum, Litecoin, and BCH/USD. Statement:
I still hold my long position in bitcoin.
The risk per trade is no more than 1%. A Stop Loss is placed beyond the high/low of the day, depending on the direction of the trade. A Take Profit is not set. A Stop Loss is moved 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 generate profits!
