1. How to make money on cryptocurrencies?
2. Volume analysis of BTC from the Chicago Mercantile Exchange (CME).
3. Trend analysis
4. Japanese candlestick analysis
5. Conclusion. Statistics
1. How to make money on cryptocurrencies?
It is better to trade as large players do. It is big sums of money that make markets reverse and not technical indicators. That is why you should understand how big sums of money influence the market. Volume analysis could provide us with information about market changes. Learn and apply various types of volume analysis and you will gain profit. Yesterday, we discussed the accumulation of positions opened by big players. When the accumulation is finished, a new trend could start. Let us find out how the new trend starts and how we can join it.
On the picture, you can see a long period of accumulation and a breakout candlestick of the exit from the range.
The beginning of a new trend could be determined by following ways:
- a long accumulation period within a particular channel should take place ahead of a new strong trend
- a trend candlestick with a big body and small shadows should break the range
-a breakout candlestick should close near a high in case of an upward break and near a low in case of a downward break
- the highest traded volume POC should be replaced beyond the range
A break of the range provides traders with the opportunity to join the new trend. Such situations occur rarely. If you want to get a big number of market entries, you should analyze a bigger number of cryptocurrencies. If there is no confident trend, it is possible to trade within the range of a short-term flat strategy. In the next article, we will find out how to maintain positions within a trend. Now, let us take a look at the current market situation.
2. Volume analysis of BTC from the Chicago Mercantile Exchange (CME)
It seems that bitcoin began a correctional movement (a picture at the beginning of the article). Only time will show whether this correction will be global or local. Every movement of the asset is an opportunity to earn money. In this case, traders may search for entry points for the cryptocurrencies that are weaker than bitcoin. Let's consider the levels of the highest traded volume from the Chicago Mercantile Exchange (CME).
23.03.21 – the level of the highest traded volume (POC– PointOfControl) – 54,970
24.03.21 – the level of the highest traded volume (POC– PointOfControl) – 56,595
Yesterday, POC moved up. However, the price failed to consolidate and dropped below the two recent POC levels. It is a strong bearish signal. Thus, we can consider sell positions.
3. Trend analysis
Large players always form a trend. Trading with a trend gives you the opportunity to trade together with a large market player. That is why in this analysis we use three types of trends.
To analyze the trend, I use the exponential moving average (EMA):
Long-term trend – a blue EMA (1,152 ) on the H1 chart, which is an alternative to EMA (48) on D1;
Mid-term trend – a red EMA (288) on the H1 chart, which is an alternative to EMA (48) on H4;
Short-term trend – a black EMA (48) on the H1 chart
The price dropped below the short- and mid-term EMA, but it is still above the long-term EMA. In this case, the trend could hardly be stable. The trends are different. Thus, it is possible to open both sell and buy deals.
4. Japanese candlestick analysis
The Japanese candlestick analysis can tell you a lot about the current state of the market. It is important to understand the psychological state of market participants. Daily candlestick helps us understand this. At the same time, the close price reveals the winner. Let us analyze yesterday's daily candlestick:
Yesterday's candlestick turned out to be a reversal one. At the beginning of the day, bitcoin was rising. However, in the second part of the day, it began falling. The asset closed lower than its open price. The market sentiment is bearish. Today, the price continues falling.
The shape of the candle is a Hammer pointing downwards, with a small body and a long upper shadow. In such a situation, sell positions should be considered.
5. Conclusion. Statistics
Volume analysis – SELL
Long-term trend – BUY
Medium-term trend - SELL
Short-term trend – SELL
Japanese candlestick analysis – SELL
Conclusion: On March 25, 2021, it is possible to open sell and buy positions in the short-term. The fact is that various analyses provide us with various forecasts. The market is moving sideways.
Only long-term 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, BTC USD - which are analyzed in a similar way. Trading account monitoring:
Gains for two months of 2021: +10.24%.
Statement:
At the moment, two deals are opened:
23.03.21 BCHUSD SELL: 514.08 SL: 545; Risk per trade: 1% of a $10,000 deposit with 3.28 lots.
25.03.21 Litecoin SELL: 174.44 SL: 201; Risk per trade: 1% of a $10,000 deposit with 0,4 lot.
A 1% risk will protect you from excessive worries. A Stop Loss is placed beyond the high/low of the day, depending on the direction of the trade. We do not set a Take Profit and move a Stop Loss above 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 profits!
