1. Analysis of ETH/TUSD volume on the Binance exchange.
2. Analysis of long-term trend.
3. Analysis of medium-term trend.
4. Analysis of short-term trend.
5. Japanese candlestick analysis.
6. Conclusions.
7. Statistics.
1. Analysis of ETH/TUSD volume on the Binance exchange.
In this analysis, we will use the data on horizontal trading volume from the Binance exchange on daily charts. The analysis is based on the footprint-profile theory. According to it, the movement of the level with the highest traded volume during the day can indicate a possible direction of the trend. The level with the highest traded volume is the level where the maximum number of transactions has been made. This is the level of a major market player. Accordingly, if the maximum volume level moves higher, this indicates an uptrend. A downward movement of this level indicates a downtrend. A chaotic movement signals that the market is trading in a sideways trend.
09.03.21 - The level of the maximum traded volume (POC - Point Of Control) - 1848
10.03.21 - The level of the maximum traded volume (POC - Point Of Control) – 1856
The POC has moved upwards. The price is below the two previous POC levels. The market seems to have entered the correction phase, so you can open long and short positions.
2. Analysis of long-term trend.
A trend is the trader's friend. Many market participants know this saying but do not know how to use it. The answer is simple: trade only in the direction of the trend. In this case, your trades will have more profit potential with less risk. The classic Dow Theory describes three main trends:
long-term;
medium-term;
short-term.
You need to analyze these trends before opening any trade. This is what we are going to do in the analysis below.
The long-term trend in this analysis is a daily trend. Trades will be opened on the daily chart and held for several days. The analysis of the daily trend is carried out with the help of the EMA (48) - an exponential moving average with a period of 48. If the daily candlestick closes above the EMA (48), this will mean that the quotes are moving in an uptrend and we should open long positions. If the daily candlestick closes below the EMA (48), this will mean that the quotes are trading downwards and we should go short.
The price is above the EMA (48). The chart shows the upward trend. In this situation, you may open long trades.
3. Analysis of medium-term trend.
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, you may open long positions.
4. Analysis of short-term trend.
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 below the EMA (48). The short-term trend is downward. The long-term, medium-term, and short-term trends do not coincide. Therefore, traders can open short 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 downwards, the candlestick is black. Its high is above the high of the previous candlestick. The price has formed a Doji candlestick pattern. Its body is not long and it has big shades. A sideways movement looks likely.
6. Conclusions.
1. Volume analysis: BUY SELL.
2. Long-term trend: BUY.
3. Medium-term trend: BUY.
4. Short-term trend: SELL.
5. Japanese candlestick analysis – BUY SELL.
Conclusion: On March 11, you can open both long and short positions.
7. Statistics.
To analyze how effective this approach is, the data on completed transactions is tracked. The forecast is made for four instruments: Bitcoin, Ethereum, Litecoin, and BCHUSD. Trading account monitoring:
The monthly gain for the two months of 2021 was +9.92%.
Statement:
At the moment, we keep the position:
09.03.21 Ethereum BUY: 1831 SL: 1619; The risk per deal: 1% from a $10,000 deposit with 0.48 lots.
We do not open a new position, as the situation in the market is uncertain. 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 the daily charts, this recommendation remains relevant throughout the day.
Trade with the trend and you will make a profit!