1. Analysis of BCH/USD volume from the Binance cryptocurrency exchange

2. Analysis of the long-term trend

3. Analysis of the medium-term trend

4. Analysis of the short-term trend

5. Japanese candlestick analysis

6. Conclusions

7. Statistics

1. Analysis of BCH/USD volume from the Binance cryptocurrency exchange

The analysis is based on the horizontal volumes data from the Binance exchange on daily charts. The analysis is carried out based on the footprint-profile theory. According to the theory, the direction of the level with the highest trade volume during the day can indicate the possible direction of the trend. The highest trade volume is the level with the largest number of carried out transactions. That is, it is the level of major market players. Accordingly, if the highest trade volume level goes up, it indicates an upward trend. Otherwise, if the highest trade volume level goes down, it indicates a downward trend. Chaotic movements signal that the market is trading flat.

06.02.2021 – the highest horizontal volume level; point of control (POC) = 474.8

08.02.2021 – the highest horizontal volume level; point of control (POC) = 469.6

The point of control went up, the price level is above the point of control. The upward trend continues. Therefore, one should consider entering long.

2. Analysis of the long-term trend.

A trend is your friend. Many traders know this saying but do not know how to use it. The answer is simple: one should trade only in the direction of a trend. Thus, your trades will have more profit potential, involving less risk. According to the classic Dow theory, there are three main trends:

long-term

medium-term

short-term

These are the trends you should analyze before entering the market. They are what we are going to discuss.

The long-term trend is the daily trend. In this case, deals are made in the daily time frame and are held for several days. The analysis of the daily trend is made with the help of the 48-period exponential moving average (EMA). If the daily candlestick closes above EMA(48), it will indicate the upward trend. Therefore, you should enter long. If the daily candlestick closes below EMA(48), then it is the downward trend and you should enter short.

On the chart, we can see the beginning of the upward trend. The price level if above EMA(48). That is why you should consider entering long.

3. Analysis of the 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), it will indicate the downward trend. Consequently, you should enter short.

The price level if above EMA(48). This means that the medium-term trend is the upward trend. Apart from that, it coincides with the long-term trend. Therefore, you should open long positions.

4. Analysis of the short-term trend.

A short-term trend is the trend in the H1 time frame. Moreover, it can show an entry point into the market well. In this case, we will also turn to EMA(48). If the candlestick closes above EMA(48) on the H1 chart, it will indicate the upward trend. Thus, you should enter long. Alternatively, if the candlestick closes below EMA(48), it will indicate the downward trend. Consequently, you should enter short.

The price level if above EMA(48). It is the short-term upward trend. The long-term, the medium-term, and short-term trends coincide. Thus, you should open buy deals.

5. Japanese candlestick analysis.

A classic Japanese candlestick analysis is applied to the daily timeframe. In this particular analysis, we will also look at the daily candlestick.

The daily candlestick is white. Its high is above the high of the previous candlestick. The candlestick pattern matches the trend. Its body is longer than its shadows. The upward movement is highly likely.

6. Conclusions.

1. Volume analysis: POC is higher, the price increased as well - BUY.

2. Long-term trend: up - BUY.

3. Medium-term trend: up - BUY.

4. Short-term trend: up - BUY.

5. Japanese candlestick analysis - BUY.

General conclusion: 09.02.21 – buy deals are a priority.

7. Statistics.

To analyze how effective this approach is, the data on completed transactions is tracked. Trading account monitoring:

February 2021: +1.19%.

Current deals:

03.02.21 BCHUSD BUY: 150.70; SL: 129.63; Risk per deal: 1% of a $10,000 deposit with 2.7 lots.

A Stop Loss should be placed beyond the daliy extreme points when you open new deals. You do not need to set a Take Profit because we are going to move the Stop Loss 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!