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1.Analysis of trade volume of ETHT/USD according to Binance crypto exchange
2.Long-term trend analysis
3.Medium-term trend analysis
4.Short-term trend analysis
5.Japanese candlestick analysis
6.Conclusions
7.Statistics
1.Analysis of trade volume of ETHT/USD according to Binance crypto exchange
Analysis of trade volumes is based on the data from the Binance crypto exchange which are applied to a daily chart. This analysis is made on the grounds of the Footprint Profile theory which indicates a possible trend direction as the theory allows traders to see at what prices liquidity is pooling. The highest trade volume is the volume of the biggest quantity of trades that unveils large market players. In this context, if the highest volume levels shift upwards, it means an uptrend. Alternatively, if the highest volume levels shift downwards, it reveals a downtrend. If the highest volume levels move erratically, it means a flat market.
03.02.2021 – The level of the highest horizontal volume (POC – Point Of Control) - 1612
04.02.2021 - The level of the highest horizontal volume (POC – Point Of Control) – 1686
The POC shifted upwards, but the price responded to such a volume with a downward move. This reveals that the bulls are still dominating the market, though their strength is fading. Nevertheless, the outlook is still bullish.
2.Long-term trend analysis
A trend is a trader's friend. Most traders are aware of this proverb, but only few know how to apply this rule. The answer is simple. Make sure you trade following a trend. This is the only way how to make your trading more efficient with smaller risks. According to Dow's classic theory, there are three main trends: long-term, medium-term, and short-term. All these trends should be analyzed and recognized before you open any trade. That's what I'm going to do in my market review.
A long-term trend in this analysis is an intraday trend. Deals will be executed on a daily chart and kept open for a few days. Analysis of an intraday trend is carried out by means of a 48-period exponential moving average that is EMA(48). If the daily candle closes above EMA(48), it indicates an uptrend so that the time is right to buy an asset. On the other hand, if the daily candle closes below EMA (48), it means a downtrend, thus signaling sell trades.
This chart reveals a clear-cut bullish trend because the price is above EMA(48). Hence, the time is ripe for buy trades only.
3.Medium-term trend analysis
In this review, a medium-term trend is analyzed on a 4-hour chart. Besides, a 48-period exponential moving average (EMA(48)) is also applied to this review. In case a 4-hour candle closes above EMA(48), it means an upward medium-term trend, thus traders should buy an asset. Alternatively, if a 4-hour candle closes below EMA(48), it means a downward medium-term trend, thus inviting traders to sell.
In this particular case, the price above EMA(48) signals a strong uptrend. To sum up, a medium-term trend coincides with a long-term trend. So, a trading strategy is to buy ETHT.
4.Short-term trend analysis
Let's consider a trend on a 1-hour chart to be a short-term trend which can help us identify an exact market entry point. Again, we resort to EMA(48) which is a 48-period exponential moving average. If a 1-hour candle closes above EMA(48), this means an upward trend, thus inviting traders to buy. In case a 1-hour candle closes below EMA(48), this indicates a downtrend, thus suggesting sell trades.
In case with Ethereum, the price is above EMA(48) that is an uptrend. All in all, a long-, medium-, and short-term trends coincide. Therefore, we should consider buy orders on Ethereum.
5.Japanese candlestick analysis
The classic Japanese candlestick analysis is applied to a daily timeframe. Besides, we are going to take into account an intraday candle in this analysis.
The intraday candlestick colored white closes upwards. It made a high higher than the one of the previous candle. This indicates an upward move. The candle looks like a doji pattern that means a small body and long shadows. The price is likely to move upwards, though it could be losing bullish momentum.
6.Conclusions
1.Analysis of trade volume: POC has shifted upwards, the price responded downwards. So, BUY
2.Long-term trend is upwards, so BUY
3.Medium-term trend is upwards, so BUY
4.Short-term trend is upwards, so BUY
5.Japanese candlestick analysis suggests BUYING
Overall conclusion: it is preferable to buy Ethereum on February 05, 2021
7.Statistics
To reckon efficiency of this strategy, it would be a good idea to keep statistics on deals executed. We are still holding a buy deal open.
02.02.21 Ethereum BUY: 1441; SL: 1540; risk per deal is 1% from deposit. A stop loss has been shifted behind a local low on 04.02.2021. This deal has been at break even, having brought some profit.
A stop loss is placed behind an intraday extremum. We are not going to set a take profit because we aim to follow the deal shifting a stop loss behind extremums of the days to follow. Trading is being carried out on a daily chart, so this recommendation is valid for the whole trading day.
Trade following a trend and you will always end up with gains!
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