1. Analysis of bitcoin futures volumes from the Chicago Futures Exchange (CME).
2. Analysis of the long-term trend.
3. Analysis of the medium-term trend.
4. Short-term trend analysis.
5. Japanese candle analysis.
6. Conclusions.
7. Statistics.
1.Analysis of bitcoin futures volumes from the Chicago Futures Exchange (CME)
The analysis uses data on horizontal volumes from the Chicago Futures Exchange on daily charts. 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 upward movement of the maximum volume levels indicates an upward trend. A downward movement of the maximum volume levels indicates a downward trend. The chaotic movement of the maximum volume levels indicates a flat in the market.
02/03/21 - Maximum Horizontal Volume Level (ROS-Point Of Control) - 36990
02/04/21 - Maximum Horizontal Volume Level (ROS-Point Of Control) - 37890
The ROS has moved up, the price has remained almost at the ROS level, and the strength of the bulls is weakening. But there is a possibility that the upward movement will continue.
2. 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:
All these trends are needed to be analyzed before opening any transaction. We will do this in this analysis.
The long-term trend in this analysis is the daily trend. Trades will be made on a daily time frame, and will be 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 closes above the EMA (48), it means that we are facing an upward trend and we should buy. If the daily candle closes below the EMA (48), it means that the trend is downward and should be sold.
The chart clearly shows an upward trend, the price is higher than the EMA (48), so in this situation, you should only consider purchases.
3. 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 will close above the EMA (48), it means that the trend is upward and you should buy. If the H4 candle will close below the EMA (48), it means that the trend is downward and should be sold.
The price is confidently holding above the EMA (48). This means that the medium-term trend is upward and coincides with the long-term trend, so you should buy.
4. Short-term trend analysis
The short-term trend, which can 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 will close above the EMA (48), it means that the trend is upward and you should buy. If the H1 candle will close below the EMA (48), it means that the trend is downward and should be sold.
The price is above the EMA (48). There was an attempt to correct, but new purchases pushed the price back above the EMA (48). Short-term uptrend, Long-term, medium-term and short-term trends coincide, you should buy.
5. 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 up, the candle is white. The high is higher than the high of the previous candle, which indicates an upward movement. The shape of the candle is Doji, with a small body and large shadows. An upward movement is likely, but the strength of the bulls is weakening.
6. Conclusions
Volume analysis: the ROS has moved up, the reaction to the ROS is BUY.
Long-term trend: up - BUY.
Medium-term trend: up - BUY.
Short-term trend: up - BUY.
Japanese Candlestick Analysis - BUY.
General conclusion: 02/05/21- it is preferable to buy.
7. Statistics
The statistics on completed transactions will be kept to analyze the effectiveness of this approach. We will continue to be engaged in this transaction:
02/02/21 Bitcoin BUY: 34830; SL: 35907; Risk per transaction: 1% of the deposit. The stop loss was moved for the minimum of the day 02/04/21. This transaction is already at breakeven and a part of the profit is fixed.
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. This recommendation is relevant throughout the day since trading is conducted on daily charts.
Keep it simple and trade on the trend, you will have a great profit!
