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1. Analysis of BCHUSD volume on Binance 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 BCHUSD volume on Binance exchange.
The analysis is based on the horizontal volumes data on daily charts from the Binance exchange. The analysis is carried out based on the footprint-profile theory. According to the theory, the direction of the horizontal level with the highest trade volume within a day can indicate the likely direction of the trend. The highest trade volume is the level with the largest number of transactions carried out. 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.
14.03.21 – the level of the highest horizontal volume (POC – PointOfControl) – 547
15.03.21 – the level of the highest horizontal volume (POC – PointOfControl) – 529
The POC has moved down. The price is above the POC. The market seems to have started moving sideways. Therefore, traders can open both long and short positions.
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: to trade only in the direction of a trend. Thus, your trades will have more profit potential with 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. Now, let's take a look at them.
The long-term trend is the daily trend. In this case, trades are conducted 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 (48). If the daily candlestick closes above EMA (48), it will indicate the upward trend. Therefore, you should enter long positions. If the daily candlestick closes below EMA (48), then it is the downward trend and you should open short positions.
The price is in line with the EMA (48). The chart shows a sideways trend. In this situation, you may open short and long trades.
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) on the H4 chart, it will indicate the downward trend. Consequently, you should enter short.
The price is below the EMA (48). The medium-term trend is downward. Therefore, you should open short positions.
Analysis of the short-term trend
In this analysis, the short-term trend is a trend on the H1 chart. It can show a point where we can enter the market. Here, we will again use the EMA (48) - an exponential moving average with a period of 48. If the candlestick closes above the EMA (48) on H1, this means that the quotes are trading upwards and we should buy. If the candlestick closes below the EMA (48) on H1, this indicates that the trend is downward and we should go short.
The price is below the EMA (48). The short-term trend is downward. The long-term, medium-term, and short-term trends do not coincide. Therefore, traders can go short.
5. Japanese candlestick analysis.
The classic Japanese candlestick analysis is applied to the daily trading chart. In this analysis, we will also analyze the daily candlestick.
The daily candlestick closed downwards, the candlestick is black. Its low is below the low of the previous candlestick. The candlestick pattern is a Candle Trend. The downward movement is highly likely
6. Conclusions.
1. Volume analysis: BUY SELL.
2. Long-term trend: BUY SELL.
3. Medium-term trend: SELL.
4. Short-term trend: SELL.
5. Japanese candlestick analysis – SELL.
Conclusion: On March 16, you can open both long and short positions.
7. Statistics.
To analyze how effective this approach is, the data on completed transactions is tracked. The forecast is made for four instruments: Bitcoin, Ethereum, Litecoin, and BCHUSD. Trading account monitoring:
Gains for two months of 2021: +12.21%.
Statement:
We do not open a new position, as the situation in the market is uncertain. Stop-loss orders for new trades can be placed beyond the daily extreme point. We do not set Take-profit orders, as we will continue to move SL beyond the extreme points of the future sessions.
Since trading is carried out on the daily charts, this recommendation remains relevant throughout the day.
Trade with the trend and you will make a profit!
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