1.How to make money on cryptocurrencies?
2. Analysis of Bitcoin futures volume on Chicago Mercantile Exchange
3. Trend analysis.
4. Japanese candlestick analysis.
5. Conclusion. Statistics.
1.How to make money on cryptocurrencies?
A competent money management system will help you make money on cryptocurrencies. However, a good money management system is just a complement to a competent trading system. Therefore, until you have a profitable trading system with several months of positive statistics on at least 100 transactions in the real market, you should not go into more complex money management systems. If you already have a trading system, you need to deal with money management that will help you increase profits.
Now let's consider what method of money management can be used after you have spent enough time trading with a minimum, standard lot.
The Multiple Lots method - multiple trades with one entry point. The core of this method is that using one trading signal, you open several positions rather than just one, for example, two trades. The goal of the first trade is to make a profit quickly, and it can be closed after the first profitable impulse. The goal of the second trade is to keep a position open for as long as possible to maximize profits.
The figure shows an example of such a money management method. After the first trade is closed with gains, the second one can be moved to the break-even point. In this case, a trader is no longer risking anything. This method can be used for trending markets, including the cryptocurrency market. However, it is important to understand that the purpose of this method is to make a profit during strong movements. When the market is trading sideways, this method can only increase your losses, while amid strong rallies, they will be offset.
This money management method is conservative and can be applied by experienced traders.
2. Analysis of Bitcoin futures volume on Chicago Mercantile Exchange.
Bitcoin has entered a sideways correction again. One candlestick is within the other. Today, the price has already broken through yesterday's low. Therefore, a further downward movement is highly likely. Let's consider the levels of the maximum traded volumes based on the Chicago Mercantile Exchange. These indicators show the activity of major market players.
20.04.21 - The level of the maximum traded volume (POC - Point Of Control) - 56120
21.04.21 - The level of the maximum traded volume (POC - Point Of Control) - 56120
The POC has moved down, the price is below the maximum traded volume. The market is moving in a downward trend. In such a situation, according to the volume analysis, you can open short positions.
3. Trend analysis.
The second step in this analysis is to determine the short-, medium-, and long-term trend. It is worth opening trades when the direction of all three trends coincides. Trend analysis is carried out with the help of an exponential moving average:
EMA 1152 (blue) shows the long-term trend on the H1 chart, which is similar to EMA 48 on the D chart;
EMA 288 (red) shows the medium-term trend on the H1 chart, which is similar to EMA 48 on the H4 chart;
EMA 48 (black) shows the short-term trend on the H1 chart.
The price is below the short-term, medium-term, and long-term EMAs. The price has turned around. Apparently, a downward movement is beginning to develop in the market. Therefore, according to the trend analysis, it is possible to open short positions today.
4. Japanese candlestick analysis.
Market analysis with the help of Japanese candlesticks is the third step in this trading system. Let's analyze yesterday's daily candlestick:
The candlestick has closed downwards, the candlestick is black. The extreme points are within the extreme points of the previous candlestick. The candlestick pattern is uncertain. According to the Japanese candlestick analysis, you can consider both buy and sell orders.
5. Conclusion. Statistics.
Volume analysis - SELL.
Long-term trend - SELL.
Medium-term trend - SELL.
Short-term trend - SELL.
Japanese candlestick analysis - BUY SELL.
Conclusion: On April 22, 2021, you can open both long and short positions on bitcoin in the short term as different types of analysis provide different forecasts.
To analyze the effectiveness of this trading approach, you should use statistics. Based on these forecasts, we track the data on completed transactions and open new deals in a separate account. Transactions are made on four instruments: Bitcoin, Ethereum, Litecoin, and BCHUSD. They are analyzed in the same way. Statement:
We do not open new positions as the market situation is uncertain.
The risk is not more than 1% per trade, this approach is conservative. According to this system, a stop-loss order is placed beyond the daily low or high, depending on the direction of the trade. We do not set take-profit orders, enabling the price to grow without limits. We follow the trade, moving 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 along the trend and you will make a profit!
