- How to make money on cryptocurrencies?
- Analysis of volumes for Bitcoin futures from the Chicago Mercantile Exchange (CME).
- Trend analysis.
- Japanese candlestick analysis.
- Conclusions. Statistics.
1. How to make money on cryptocurrencies?
To make money on cryptocurrencies, you need to choose the optimal trading strategy. There is a huge variety of trading strategies, but the first thing to pay attention to is the timeframe for trading. This choice, at first glance, is very simple, but it is he who can either lead to success or not. What are the trading systems in terms of time:
- Short term - Timeframe is minute (M1, M5, M15).
- Medium term - Timeframe is minute, hour (M30-H4).
- Long term - Timeframe is day, week (D-W).
Novice traders are attracted to short-term timeframes. It seems that one can quickly and easily capitalize on strong intraday price movements. But before making such a choice, it is worth thinking about the advantages and disadvantages of short-term trading systems. The advantages are:
- Strong intraday volatility. There are trades every day, you can trade in any direction, since the trend can change several times during the day, which opens up the potential for earning.
- Fast acquisition of experience. Since there are many trades every day, a trader quickly acquires trading skills.
- Not a big deposit. With short-term trading, it is possible to set a small stop loss in points, so a small deposit may be sufficient for trading at the initial stage.
But short-term trading has its drawbacks, and it may not be suitable for all traders:
- It takes a lot of time. Since you need to track deals on a 1-minute or 5-minute timeframe, you need to spend several hours a day at the monitor. This kind of trading is difficult to combine with work or business.
- Fast, difficult to predict movements. During the day, the market can reverse quickly, it is important for a trader to closely monitor the market and respond quickly to changes.
- Psychological stress. With intraday trading, you need to trade several hours a day, make a lot of transactions, not be distracted. All this can be psychologically and emotionally difficult.
Before you start trading intraday short-term systems, you need to think and weigh everything. After all, you need to trade in this way not for a month or two, but for a long time, if you want to make trading your profession. Intraday trading is more suitable for professional traders who are beginning to trade better on higher time frames.
2. Analysis of volumes for Bitcoin futures from the Chicago Mercantile Exchange (CME).
The cryptocurrency market is doing well, the main instruments are growing. Bitcoin is pushing high levels, clearly preparing for an upward breakout. Growth did not stop over the weekend and continues today. You can take advantage of this optimism and join this movement. Consider the levels of maximum horizontal volumes from the Chicago Mercantile Exchange. These volumes show the activity of major players.
8.04.21 - Maximum horizontal volume level (POC - Point Of Control) - 58185
04/09/21 - Maximum horizontal volume level (POC - Point Of Control) - 58675
The POC went up and the price is higher than yesterday's maximum volume. The price and POC are moving in the same direction, there is a potential for growth in the market. In such a situation, you can buy in terms of volume analysis.
3. Trend analysis.
The second step in the analysis is to check the short, medium, and long-term trend. It is worth making deals when the direction of all three trends coincides. To analyze the trend in these forecasts, an exponential moving average is used:
- Long-term trend - EMA 1152 (blue) on the H1 timeframe, which is an analogue of EMA 48 on the D timeframe;
- Medium-term trend - EMA 288 (red) on the H1 timeframe, which is an analogue of EMA 48 on the H4 timeframe;
- Short-term trend - EMA 48 (black) on the H1 timeframe.
The price rose above all three EMAs, which indicates an upward movement. All three EMAs are directed upwards, this movement has the potential for continuation. Therefore, today you can buy, from the point of view of trend analysis.
4. Japanese candlestick analysis.
Market analysis using Japanese candlestick analysis is the third step in this trading system. Let's analyze yesterday's daily candlestick:
Yesterday's candlestick is white, it was closed upward. The body and shadows are inside the previous candlestick. Candlestick configuration - Downward hammer, large upper shadow. The high of yesterday's candlestick has already been broken, but after the breakout, the price rolled back. From the point of view of Japanese candlestick analysis, it is worth considering both buying and selling, as the situation is ambiguous.
5. Conclusions. Statistics.
- Volume analysis - BUY.
- Long-term trend - BUY.
- Medium-term trend - BUY.
- Short-term trend - BUY.
- Japanese candlestick analysis - BUY SELL.
General conclusion: On April 12, 2021 - you can buy and sell bitcoin for the short term, since different types of analysis give different forecasts.
Only statistics can show the effectiveness of any trading approach. According to these forecasts, transactions are made on a separate account and open statistics of these transactions are provided. Transactions are made in four instruments: Bitcoin, Ethereum, Litecoin, and BCH/USD, which are analyzed in the same way. Statement:
Today, I do not open new deals, as there is uncertainty in the market.
The risk per trade is not more than 1%, this approach is conservative. Stop loss for this system is set behind the daily high or low, depending on the direction of the deal. Profit is given the opportunity to grow without restrictions, since I do not set take profit. I accompany the trade by moving the stop loss beyond the extreme points of upcoming sessions.
Since trading is carried out on daily charts, this recommendation is relevant throughout the day.
Trade along the trend and you will generate profits!
