- Analysis of volumes for Bitcoin futures from the Chicago Mercantile Exchange (CME).
- Analysis of the long-term trend.
- Analysis of the medium-term trend.
- Analysis of the short-term trend.
- Japanese candlestick analysis.
- Conclusions.
- Statistics.
1. Analysis of volumes for Bitcoin futures from the Chicago Mercantile Exchange (CME).
The analysis uses data on horizontal volumes from the Chicago Mercantile Exchange on daily charts. The analysis is based on the Footprint-Profile theory, in which the movement of the maximum 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 upward movement of the maximum volume levels indicates an upward trend. A downward movement of the maximum volume level indicates a downward trend. Chaotic movement of the maximum volume levels indicates a flat in the market.
03/15/21 - Maximum horizontal volume level (POC - Point Of Control ) - 56475
03/16/21 - Maximum horizontal volume level (POC - Point Of Control ) - 55990
The point of control has moved down. The price is above the POC level. Perhaps a sideways movement has begun, you can buy and sell.
2. Analysis of the long-term trend.
A trend is a friend of a trader. Many traders know this saying but don't know how to use it. The answer is simple: trade only in the direction of the trend. This way your trades will have more profit potential with less risk. According to classical Dow theory, there are three main trends:
- long-term;
- medium-term;
- short-term.
These are the trends that need to be analyzed before opening any deal. This is what we will do in this analysis.
The long-term trend in this analysis is the daily trend. Trades will be executed on the daily timeframe and held for several days. The analysis of the daily trend is carried out using the 48-period exponential moving average (EMA (48)). If the daily candlestick closes above the EMA (48), then we have an upward trend in front of us and we should buy. If the daily candlestick closes below the EMA (48), then the trend is downward and you should sell.
There is an upward trend on the chart. The price is above the EMA (48), so in this situation, it is worth considering buying.
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 48-period exponential moving average (EMA (48)) will also be used for analysis. If the H4 candlestick closes above the EMA (48), then the trend is upward and you should buy. If the H4 candlestick closes below the EMA (48), then the trend is downward and you should sell.
The price is in line with the EMA (48). The medium-term trend is sideways, so you can both buy and sell.
4. Analysis of the short-term trend.
A short-term trend that can show the point of entry into the market well is considered a trend on the H1 timeframe. We will be helped by the 48-period exponential moving average (EMA (48)). If the H1 candlestick closes above the EMA (48), then the trend is upward and you should buy. If the H1 candlestick closes below the EMA (48), then the trend is downward and you should sell.
The price is below the EMA (48). The short-term trend is downward, you can sell. Long-term, medium-term, and short-term trends do not coincide.
5. Japanese candlestick analysis.
Classic Japanese candlestick analysis is applied to the daily timeframe. In this analysis, we will also analyze the daily candlestick.
The daily candlestick is closed downward, the candlestick is black. The low is below the low of the previous candlestick. Candlestick configuration - Hammer pointing up. Probably upward movement.
6. Conclusions.
- Volumetric analysis - BUY SELL .
- Long-term trend - BUY .
- Medium-term trend - BUY SELL.
- Short-term trend - SELL.
- Japanese candlestick analysis - BUY.
General conclusion: On March 17, 2021 - you can both buy and sell.
7. Statistics.
To analyze the effectiveness of this approach, statistics are kept on completed transactions. Forecasts are made and transactions are made in four instruments: Bitcoin, Ethereum, Litecoin, and BCH/USD. Trading account monitoring:
The result for two months in 2021 is + 12.21%.
Statement:
There is no certainty in the market, so we do not open new deals. For new trades, the Stop Loss is located behind the daily extreme points. We do not set the Take Profit, since we will accompany the transaction by moving 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 gain profit!
