1. How to make money on cryptocurrencies?
2. Analysis of bitcoin futures volumes from the Chicago Futures Exchange (CME)
3. Trend analysis
4. Japanese Candle Analysis
5. Conclusions. Statistics.
1. How to make money on cryptocurrencies?
Bitcoin is falling, a small correction has already taken place. Will this move develop into a full-fledged downward trend? If you are a system trader, you do not need to get lost in guesses about this. Because wherever the trend goes, your task is to join it. And any movement of bitcoin either up or down opens up opportunities for earnings. You can earn money on cryptocurrencies by imitating the actions of major players in the market and trading according to the trend. And how effective this approach is, you can see from the statement at the end of the article. In previous articles, we discussed how a major player accumulates a position and starts a new trend. It is the entry into the market at the beginning of a new trend that has the greatest profit potential. But the question arises: how to accompany this transaction in order to stay in the trend as much as possible? A simple principle works here:
"Cut the losses and let the profits grow"
Therefore, if you want to get the maximum profit, then you do not need to limit it to take profit. Powerful trends often occur in the cryptocurrency market and it is difficult to predict in advance where the trend will end.
The figure shows an example of tracking a position in a trend. If you move the stop loss behind the lows of the day in an upward trend with a certain filter, you can make a significant profit. Let's look at the current market situation.
2. Analysis of bitcoin futures volumes from the Chicago Futures Exchange (CME)
So far, buyers do not allow bitcoin to fall much (see the image at the beginning of the article). Yesterday, the fall of bitcoin was stopped, and today it is still kept in the positive zone. Therefore, it is too early to talk about a total sale on the cryptocurrency market. Now it looks like a standard correction in an upward trend, which is still being maintained. Consider the levels of maximum horizontal volumes from the Chicago Futures Exchange. These volumes show the activity of major players.
03/24/21 – The level of the maximum horizontal volume (ROS-Point Of Control) – 56595
03/25/21 – Maximum horizontal Volume Level (ROS-Point Of Control) - 50815
Yesterday, the ROS was heavily lowered down, and the maximum volume for the day was concentrated at the bottom of the shadow of the daily candle. After that, the price bounced up. This suggests that aggressive purchases were made at the bottom, which pushed the price up. Bitcoin is not allowed to fall yet. But there is no strength for strong growth yet. The market is flat, so you can consider both short-term purchases and sales, from the point of view of volume analysis.
3. Trend analysis
A trend is a trader's friend. This is a well-known expression that many people have heard, but do not know how to use. Analyze three types of trends: long-term, medium-term, and short-term. And when all three trends look in the same direction-open deals. To analyze the trend, I use an exponential moving average :
The long-term trend is EMA 1152 (blue) on the H1 timeframe, which is similar to EMA 48 on the D timeframe;
The medium-term trend is EMA 288 (red) on the H1 timeframe, which is similar to EMA 48 on the H4 timeframe;
The short-term trend is the EMA 48 (black) on the H1 timeframe.
The long-term trend remains consistently upward, as the price is held above the EMA of 1152. The medium-term trend has turned down, the price is below the EMA 288. The short-term trend has already become upward, the price is above the EMA 48. Trends are directed in different directions, in the flat market, you can buy and sell in the short term from the point of view of trend analysis.
4. Japanese Candle Analysis
Daily candle analysis using Japanese Candle Analysis helps you understand who is winning the battle in the market, buyers or sellers, and how strong they are. Let's analyze yesterday's daily candle:
Yesterday's candle closed below the opening, the candle is black. The minimum is lower than the minimum of the previous candle. The candle configuration is a hammer pointing upwards, the body is small, the lower shadow is long. This indicates a struggle in the market and attempts by buyers to reverse the downward trend. Therefore, it is worth considering purchases from the point of view of the Japanese Candle Analysis.
5. Conclusions. Statistics.
Volume analysis is SELL BUY
The long-term trend is BUY
The medium-term trend is SELL
The short – term trend is BUY
Japanese Candlestick Analysis is BUY
General Conclusion: 03/26/21 – you can buy and sell bitcoin in the short term, as different types of analysis give different forecasts, the market is flat.
Only statistics can show the effectiveness of any trading approach. Therefore, according to these forecasts, transactions are made on a separate account and open statistics of these transactions are provided. Transactions are made on four instruments - Bitcoin, Ethereum, Litecoin, BCH USD - which are analyzed in a similar way. Monitoring your trading account:
The result for the two months of 2021 is +10.24%.
Regulation:
At the moment, two deals are open:
03/23/21 BCH USD SELL: 514.08 SL: 507; Risk per trade: 1% of the deposit. With a deposit of $ 10,000, the lot is 3.28.
03/25/21 Litecoin SELL: 174.44 SL: 201; Risk per transaction: 1% of the deposit. With a deposit of$ 10,000, the lot is 0.04.
I do not open new deals today, there is uncertainty in the market. The transaction on BCH USD, moved to breakeven, moved the stop loss for the maximum of yesterday.
The risk per transaction is not more than 1%, this approach is conservative. The stop loss for this system is set behind the minimum or maximum of the signal day, depending on the direction of the transaction. The profit is given the opportunity to grow without restrictions, since I do not set a take profit. I accompany the transaction by moving the stop loss for 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 great profit!