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1. Volume analysis for the LTCUSDT instrument from the 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 candle analysis.
6. Conclusions.
7. Statistics.
1. Volume analysis for the LTCUSDT instrument from the Binance exchange.
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 displacement of the maximum amount of levels up indicates an upward trend. Moving the maximum volume level down indicates a downward trend. The chaotic movement of the maximum volume levels indicates a flat in the market.
03.02.21 – Maximum horizontal volume level (POC - Point Of Control) - 150
04.02.21 – Maximum horizontal volume level (POC - Point Of Control) - 147.88
The POC moved down, the price reaction after the infusion of this volume - up, the price is higher than the previous two POC. There is a possibility of continuing the upward movement.
1. Analysis of the long-term trend.
A trend is a trader's friend. Many traders know this saying, but do not 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 the classical Dow theory, there are three main trends:
It is all these trends that need to be analyzed before opening any transaction. In this analysis, we will do this.
The long-term trend in this analysis is the daily trend. Trades will be made on a daily timeframe and held for several days. The daily trend is analyzed using the EMA (48), an exponential moving average with a period of 48. If the daily candle closed above the EMA (48), it means that we are facing an upward trend and should buy. If the daily candle closed below the EMA (48), it means that the trend is downward and should be sold.
The chart shows an upward trend, the price is higher than the EMA (48), so in this situation, you should only consider purchases.
2. Analysis of the medium-term trend.
In this analysis, the medium-term trend will be the trend on the 4-hour chart (H4). The EMA (48), an exponential moving average with a period of 48, will also be used for the analysis. If the H4 candle closed above the EMA (48), it means that the trend is upward and you should buy. If the H4 candle closed below the EMA (48), it means that the trend is downward and should be sold.
The price is held above the EMA (48). Medium-term trend, upward trend and coincides with the long-term trend, so you should buy.
3. Short-term trend analysis.
The short-term trend, which can well show the entry point to the market, will be considered a trend on the H1 timeframe. The EMA (48), an exponential moving average with a period of 48, will help us. If the H1 candle closed above the EMA (48), it means that the trend is upward and you should buy. If the H1 candle closed below the EMA (48), it means that the trend is downward and should be sold.
The price rose above the EMA (48). The short-term trend is upward. The long-term, medium-term, and short-term trends coincide, the trend is upward, you should buy.
4. Japanese candle analysis.
The classic Japanese candlestick analysis is used for the daily timeframe. In this analysis, we will also analyze the daily candle.
Closing the daily candle down, the candle is black. The extremes went beyond the previous candle. The shape of the candle is a Hammer, although the shadows are long. Since the Hammer is directed upwards, there is a possibility of continuing the upward movement.
6. Conclusions.
7. Statistics.
To analyze the effectiveness of this approach, statistics on completed transactions will be kept. We continue to be in this transaction:
03.02.21 Litecoin BUY: 150.70; SL: 129.63; Risk per trade: 1% of the deposit. With a deposit of $ 10,000, lot 0.05
The stop loss is located behind the daily extreme. We do not set a take profit, as we will accompany the transaction by moving the stop loss beyond the extremes of the new days. Since trading is conducted on daily charts, this recommendation is relevant throughout the day.
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