1. Volume analysis for the ETH USD instrument from the Binance exchange
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. Volume analysis for the ETH USD instrument from the Binance exchange
The analysis uses data on horizontal volumes from the Binance exchange on daily charts. The analysis is based on the Footprint Profile Theory in which the movement of the maximum horizontal 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, the displacement of the maximum amount of levels up indicates an upward trend. Moving the maximum volume level down indicates a downtrend. The chaotic movement of the maximum volume levels indicates a flat in the market.
02/24/21 – The level of the maximum horizontal volume (ROS-Point Of Control) – 1629
02/25/1 – The level of the maximum horizontal volume (ROS-Point Of Control) – 1643
The ROS has moved up, the price is below the ROS level. The price below the previous three levels grew, you can sell.
2. Analysis of the long-term trend
A trend is a trader's friend. Many traders know this saying but they do not know how to use it. The answer is simple: trade only in the direction of the trend. In 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-termIt 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 timeframe and 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 uptrend and should buy. If the daily candle closes below the EMA (48), it means that the trend is downward and should be sold.
The price on the EMA (48), the long-term trend is sideways, you can buy and sell.
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), it means that the trend is upward and you should buy. If the H4 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). Medium-term trend is downward, it is possible to 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 is descending, it is possible to 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. Extremes within the extremes of the previous candle. The candle configuration is a downward – pointing Hammer. Probably a downward movement.
6. Conclusions
Volume analysis is SELL.
The long-term trend is BUY SELL.
The medium-term trend is SELL.
The short-term trend is SELL.
Japanese Candlestick Analysis is SELL.
General conclusion: 02/26/21 - 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, BCHUSD. See other articles. Monitoring your trading account:
The result for February 2021 is +10.93%.
Regulation:
We do not open a new deal, there is uncertainty 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 great profit!