Crypto Academy Week 14 - Homework Post for @stream4u
Technical Details On Reverse Strategy.
INTRODUCTION
The crypto market has been seen as a very lucrative venture. A lot of people have made huge amounts of money from crypto trading. All these traders have one thing in common which is a Strategy.
A trading strategy is very crucial if a trader wishes to succeed. Learning about the “Reverse Strategy” from professor @stream4u has been yet another enlightening experience as we delved into the whole concept.
What is the Reverse Strategy?
The reverse strategy is a type of trading strategy that takes into context extreme bullish and bearish conditions of one day to open an opposite position the following day. A bearish signal means that a buy position should be opened while a bullish signal means that a sell signal should be opened.
This type of strategy does not really take into consideration the price history of the asset in question. Instead, it looks at how sustained a signal is. A longer or more prominent signal of at least 20% change is a good indicator to open a position. It isn’t enough to notice the change and rush to open a position rather traders have to wait for the 24 hour change to be coming to an end. The 24 hour change confirms the signal for a position.
Why does a reverse happen
In a bullish market, for example, buyers take their position for long time causing the market to increase due to the increased contest. When there is a profit of about 20% or above, the buyers would take profit and exit the market. This exit causes a pull back letting the sellers know they should open positions. The sellers then cause the market to reverse and go bearish.
Applying the reverse strategy
Let’s see how this reverse strategy is implemented in a trade. For this example, we would be using BNB/USDT pair.
The picture above shows a bearish reversal.
- Notice that the opening price of the red candle is the same as the closing price of the green candle.
- Also notice the pullback that confirms the trend.
- To be safe I placed a stop loss just at a previous high.
- I placed the take profit at the opening price of the green candle.
- After the red candle is formed, there is a bearish movement for a few days.
The picture above shows a bullish reversal.
- Reversing the case with the bearish reversal, notice the opening price of the green candle is the same as the closing price of the red candle.
- Notice the pullback that confirms the signal.
- To be safe I placed a stop loss at a previous low.
- I placed the take profit at the opening price of the red candle.
- After the green candle is formed, there is a bullish movement for a few days.
Tips for traders intending to use the reverse strategy
It’s no secret that no signal can ever be 100% accurate. For this reason, traders have to take precautionary measures when using the reversal strategy. Some tips I have for traders include.
1. Combine with other indicators:
Combination of indicators can help to strengthen the possibility of a prediction going right. Traders can also implement this idea in the reverse strategy.
2. Always Set a stop loss:
Try to always remember to mitigate any losses so that you can get to keep some money when things start to go wrong.
3. Set a take profit:
I’m a conservative trader that likes to play safe so I always advice people to take profit as soon a possible. The best place to set a take profit for the reverse strategy is at the opening price of the previous candle.
4. Deal with greed:
Speaking of take profit, it is important to also deal with greed and other emotions. It’s best to take profit at a good level and walk away.
In the picture above, we can see that the price went way above the take profit. Some traders might want to get into the market again to lock up any further profit. It might sound like a good idea but the problem is that they would be buying at a higher price. Also the traders might not be as lucky because the prices may change direction as shown below.
5: Wait for confirmation
Always wait for confirmation signals before placing a position. Wait for the 24 hour trade to almost be concluded and also look for a pull back.
6: Try the stock market
The thing about the crypto market is that most times the opening price is the same with the closing price of the previous candle. The case is not the same with stocks where most times the opening price is not the same with the former closing price. In rare cases where these prices are the same, the reversal strategy might work.
CONCLUSION
The reversal strategy is a wonderful strategy. We can apply it after confirming the the signal would have a higher rate of success. In my opinion, the strategy would show better success in the stock market than the crypto market.
Review of COINGECKO
INTRODUCTION
The internet is full of different places that offer insights on cryptocurrencies. Some of these websites are copies of good ones or full of wrong info. CoinGecko is one of the most reliable places traders go to for information on the crypto market. Today we’re going to be talking about it.
What is CoinGecko
Founded in 2014, CoinGecko is an online platform that provides traders with statistical updates and other information about digital currencies. The company was founded by Bobby Ong and TM Lee and is based in Singapore.
CoinGecko gathers data of various digital currencies from exchanges to give accurate data about these digital currencies. Crypto currencies on CoinGecko are ranked by their market capitalization with different data on them shared for free to the public.
How COINGECKO Can Be Helpful for traders in a Crypto Market?
CoinGecko has proved helpful since it was founded in 2014. Some ways the platform has been helpful include:
1. Provision of accurate data and information:
CoinGecko pulls the data of various cryptocurrencies to a single place for traders to access. The information on CoinGecko includes useful things like market cap, supply, market rank, price, price change and others. This data can be filtered to the needs of the trader.
Also, there is information describing the various cryptocurrencies such as About, Team, Use cases, vision, social media stats and so on.
2. Exchanges:
CoinGecko provides information of different exchanges such as trading volume and coins listed while ranking them from the best with Trust scores.
3. Important links:
It is really difficult trying to find useful links online. This is why CoinGecko pulls them all in one single place. Thanks to the platform, Links to important platforms for different cryptocurrencies can be accessed. These links include social media links, explorer links, GitHub link and wallet links.
4. Latest news:
CoinGecko is really versatile. It also provides the latest news in the crypto space from different trusted sources. This makes sentimental analysis easy for traders because they can know what is happening and in just one place.
5. A virtual portfolio:
With this new feature on CoinGecko, traders can track their investments.
Features of CoinGecko
Home page
After accessing the CoinGecko website, the home page comes up. The homepage contains the list of coins with the initial 100 ranked by market cap. There are filters to manipulate the view.
Also, we can see other information like number of cryptocurrencies in existence, total market cap, total trading volume, number of exchanges and so on.
2.Popular coins
CoinGecko always has a list of trending coins on the platform. The list shuffles regularly giving traders a wider view of hot coins.
3. NFT tracker and spotlight
Non-fungible Tokens are also tracked on CoinGecko. Also, the platform provides spotlight on different NFTs.
4. Derivatives market tracker
CoinGecko is not left out in this aspect. There is a feature that tracked derivatives including perpetuals, futures and leveraged tokens.
5. Search bar
For easy navigation, CoinGecko has a search bar for users to find any asset with just some clicks.
6. A virtual portfolio
As a very important addition to the platform, CoinGecko provides traders with a virtual portfolio which they can use to track their investments.
7 Books
CoinGecko has an area for books with two books currently published. The books are “How To Bitcoin” and “How To DeFi”.
CONCLUSION
I personally do not use CoinGecko for but it is clear that the platform is really useful in many aspects for traders. Reliable sources are really hard to find these days but thanks to platforms like CoinGecko, crypto information is always at our finger tips.
Weekly Price Forecast for Crypto Coin: BNB
BNB is the symbol for the Binance Coin and is the native coin of the Binance exchange platform. Founded in 2017, it was issued at Binance’s very own ICO where it sold at $0.15. Recently, the coin has seen great success both in terms of use and price.
BNB was initially based on the Ethereum blockchain but was moved to binance very own blockchain, Binance Chain, in 2019. The coin had an initial supply of 200 million but because it is a deflationary coin, the supply keeps reducing. According to the whitepaper, 50% of the total amount of BNB would be burned in total till there are 100 million left.
BNB stats as of writing
| Price | $386.60 |
| All Time High | $690.93 |
| Rank | #3 |
| Market cap | $59,316,586,980.39 |
| Trading volume | $9,591,651,346.25 |
| Curculating supply | 153,432,897 BNB |
| Total Supply | 169,432,897 BNB |
| Maximum supply | 170,532,785 BNB |
Why BNB?
Well, I have been particularly interested in BNB since its massive bull run this year. I started to do research on it since January.
BNB is the native token of Binance and it performs a number of functions. It can be held as an asset while providing liquidity to other projects. Its versatility is something that catches me.
There used to be 200 million BNB initially but as of now there are just about 169 million. This is because BNB is a deflationary meaning that its supply would be regularly reduced by a burning process. The coin is part of my little research on how deflationary tokens work.
Last week I made a forecast of BNB going up to the $680 mark taking it as my second target. After that analysis, I bought 0.5 BNB and watched it move according to how I said it would. BNB attained a high of $690 before falling to under half that number. My mistake was that I didn’t set a stop loss.
Technical Analysis on BNB
Because I am holding BNB, I have been looking for the best time to buy it cheaper. I saw the possibility of a good opportunity with a bearish divergence signal with the RSI. Using another tool that was taught by professor @kouba01, the MACD, I was able to confirm this signal. The price started to fall after the divergence so I waited.
The dip that occurred today was faster than I could anticipate so I paused for a while. I noticed that the price formed a support around $381.
After this lesson on the reverse strategy, I noticed the pullback which helped me anticipate that the bearish movement might be near an end. That said, I believe the price will start to rise from there starting with a bullish reversal. The fall might be hard to recover from so I believe that it would take about a week for the price to get to $507.18 or even as high as $566.38 as shown below.
CONCLUSION
Although the majority of the crypto markets have been in the reds lately, I believe that this coming week would see major recoveries. BTC, ETH and BNB will probably recover and take other coins up with them.
Special thanks to @stream4u
Thank you for joining The Steemit Crypto Academy Courses and participated in the Homework Task.
Thank you very much for taking participate in this class and keep continue good work and gain good grade
Grade : 9
Thank you professor!
I will keep putting in my best.