1. Volume analysis of ETH/USD from Binance
2. Long-term trend analysis
3. Mid-term trend analysis
4. Short-term trend analysis
5. Japanese candlestick analysis
6. Conclusion
7. Statistics
1. Volume analysis of ETH/USD from Binance
The analysis is based on the traded volume data from the Binance exchange on the daily chart. The analysis is carried out based on the footprint-profile theory. According to the theory, the movement of the level of the highest traded volume intraday 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 traded volume goes up, it indicates an upward trend. Otherwise, if the level goes down, it indicates a downward trend. Chaotic movements signal that the market is flat.
April 24, 2021 – the level of the highest traded volume (POC – PointOfControl) – 2197.93
April 25, 2021 – the level of the highest traded volume (POC – PointOfControl) – 2217.35
The POC has moved upward. The price is above the POC. The market is moving in a bullish trend. You can enter long positions.
2. Long-term trend analysis
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 with the trend. Thus, your trades will be more profitable and less risky. According to the classic Dow theory, there are three main trends:
long-term
medium-term
short-term
These trends should be analyzed before you enter 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. If the daily candlestick closes above EMA 48, it will indicate the upward trend. You should enter long positions. Otherwise, if the daily candlestick closes below EMA 48, then it is the downward trend and you should enter short positions.
The price is above EMA 48. It is a long-term upward trend. You should consider entering long positions.
3. Mid-term trend analysis
The mid-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 H4 chart, it will indicate the upward trend. Thus, you should enter long positions. Otherwise, if the candlestick closes below EMA 48 on the H4 chart, it will indicate the downward trend. Consequently, you should enter short positions.
The price is above EMA 48. It is an upward mid-term trend. You should enter long positions.
4. Short-term trend analysis
A short-term trend is the trend in the H1 time frame. Moreover, it can show an entry point into the market. We turn to EMA 48 again. If the candlestick closes above EMA 48 on the H1 chart, it will indicate the upward trend. Thus, you should enter long positions. Alternatively, if the candlestick closes below EMA 48, it will indicate the downward trend. Consequently, you should enter short positions.
The price is above EMA 48. It is a short-term upward trend. You can buy the instrument. The long-term trend, the mid-term trend, and the short-term trend are in line.
5. Japanese candlestick analysis
A classic Japanese candlestick analysis is applied to the daily time frame. The daily candlestick is analyzed.
The black daily candlestick closed downward. Its extreme points are within the extreme points of the previous candlestick. The candlestick has a mid-sized body and large shadows. Based on Japanese candlestick analysis, you should buy and sell the pair.
6. Conclusion
- Volume analysis – BUY.
- Long-term trend analysis – BUY.
- Mid-term trend analysis – BUY.
- Short-term trend analysis – BUY.
- Japanese candlestick analysis – BUY/SELL.
Conclusion: You can buy and sell ETH/USD on April 26, 2021, as various analyses provide different forecasts.
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, BCH/USD. Statement:
I do not open new positions because of a flat in the market.
Risk per trade is 1%. A Stop Loss for new trades is placed beyond the daily extreme points. We do not set a Take Profit because we will continue to move the 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 generate profits!
