Crypto Academy / Season 3 / Week 5 - Homework Post for @yousafharoonkhan | Death cross & Golden cross, How to use Binance P2P trade
Thanks to Professor @yousafharoonkhan for giving us this great lecture on Death cross & Golden cross and using Binance P2P trade. After studying notes and reading this week's topic, I have decided to review what I have learned in my homework task.
1. Define Death Cross and Golden Cross in your own words. And what is the significance of DC and GC in trade? And what effect do these two have on the market? (in your own words.)
A golden cross is a graph pattern in a chart that shows a change in the price movement of an asset from a bearish trend to a bullish trend. GC occurs when the short-term moving average crosses the long-term moving average. GC appears in a market when,
When the moving average length set on 50 days before the intersection is seen below the moving average length set on 200 days and after the intersection, the moving average line set on 50 days is above the moving average line set on 200 days. The intersections from these lines in GC will cause the bulls to be in control of the market hence a bullish Trend
Like any other indicator that has 100% accuracy, The GC can also give a false indication, which if traders are not very careful and go into a long trade, there is a chance that they may lose the asset. Using this tool with other indicators can produce signals with high accuracy rates for trading.
An example is shown below,
Death Cross is the opposite of the Golden Cross; in this chart pattern, there is an indication that the market is in a sell-off state, causing the trend to change from the bullish trend into the bearish trend.
The DC occurs when the moving average line set on 50 Days before the intersection is above the moving average line set on 200 Days. After the intersection, the moving average line set on 50 days is below the moving average line set on 200 days. In simple words, DC happens when a long-term moving average line intersects and passes over a short-term moving average line.
Traders who are into short-term investments can take advantage of this tool when it gives a false signal. In this case, the asset is sold off, and since the signal is false, it will recover quickly.
An example,
GC and GC are some of the tools which traders use to trade assets in the crypto market. This has been useful for most traders, but one problem is that it sometimes is also given false signals making investors invest and standing high chances of losing their money.
In 200 days moving average line, the long term can set the support level in a Golden Cross situation. In the case of the death cross, the long-term can be taken as the Resistance level in 200 days moving average.
The DC and GC moving averages help traders filter and get rid of unnecessary information on the market; this will help get the needed information.
The Golden cross and death cross indicators give vital information about the market. These patterns are formed when the long and short moving average lines cross each other. These indicators show whether the market will be in a bullish or bearish state.
The GC gives the buy signal for the traders to buy, causing the price to rise, and the DC gives the sell signal, causing the trader to sell their assets.
2. How many days moving average is taken to see Death cross and Golden cross in the market for better results and why?, How to see the death cross and the golden cross on the chart. Explain Death cross and Golden cross on the chart (screenshot necessary)
Most technical analyses are done using The 200-day moving average; this results in high accuracy in long-term trends.
In addition to the 200-day moving average, the 50-day moving average is also used since it has also shown some effectiveness since the more influential the moving average, the better the results expected in the trading.
GC and DC cannot be seen on the chart when opened, but we have to configure them into the chart to see them. Death Cross(DC) and Golden Cross(GC) are identified on a chart using the moving average indicator. The moving average indicator is set at 50days as lowest and 200days as highest. Let's follow the steps below to add our DC and GC moving average indicator.
We can use many platforms for this illustration, but I will be using Tradingview for this assignment.
- Go to https://www.tradingview.com/chart/, select "Chart," and click on it.
- Search for and select the BTCUSDT pair.
- Locate the indicators button and click on it in other to add The MAI
- Search for Moving Average Indicator using the search box. Click on the moving average indicator twice, as shown in the diagram below,
- Use the Setting Icon to change the length of the moving average indicator.
- Set the Length of both the indicators to 50 and 200.
- Our 50 Days and 200 Days Moving Average Indicators Lengths have been set.
Green Moving Average : 50 Days
Red Moving Average : 200 Days
Now let's analyze this graph in our next question.
From the chart above, two moving average lines are crossing to form 3 intersections. Two of them are Golden Crosses, and the remaining one forms the Death Cross.
Golden Cross when the moving average line set on 50 days before the intersection is below the moving average line set on 200 days and after the intersection, the moving average line set on 50 days is above the moving average line set on 200 days. From the chart, a bullish trend can be observed after the GC has occurred. That means more of the asset has been bought.
Death Cross was formed when the moving average line set on 50 Days before the intersection is above the moving average line set on 200 Days. After the intersection, the moving average line set on 50 days is below the moving average line set on 200 days. From the chart, a bearish trend has been seen after the Death cross has occurred.
3:What is Binance P2P and how to use it ?, How to transfer cryptocurrency to a p2p wallet?, How to sell cryptocurrency in local currency via p2p (any country or coin)(screenshot necessary to verify account)
Binance P2P stands for peer-to-peer; this is one of the features on Binance exchange where traders can buy or sell crypto with their local currencies. Binance P2P system connects the buyer and the seller directly without any middleman. The trading can be transacted through different types of payment methods. These include Bank transfers, MOMO, vodacash, chipper Cash, and many others.
The seller is the one who chooses the means of payment for the asset. The buyer has to comply and send the money to the preferred payment method of the seller before the asset is being released to the buyer. Binance currently has USDT, BTC, BUSD, BNB, ETH, DOGE, and DAI available for trading.
The Binance platform serves as an arbitrator. Thus, they hold up the asset until payment is made successfully. The buyer has to mark as paid and has to confirm the payment in his selected payment method before releasing the asset to the buyer. Currently, there are no fees when buying or selling USING Binance P2P.
The first thing to have is a verified Binance account. This account is verified using the KYC method. There are other methods, but the least is the KYC method. Below is my verified Binance account
The users must set payment methods in their names to ensure easy and smooth transactions. AS discussed, the payment methods can be Bank transfers, momo, and many more. Below is my payment methods,
Below are some of the requirements you need if you want to be a Binance P2P seller,
Have a verified p2p account by the Binance P2P team
The account should not be less than 30days old.
The users should have about 80% completion in 30 days and have about 20 P2P successful trades. The trade should be between more than ten different people.
To transfer funds to a P2P wallet, follow the steps below,
- Locate the wallet icon on the top menu bar and click on it. Then select the P2P from the menu.
- I will be transferring USDT to my P2P wallet to click on the transfer of The USDT coin.
- Here, you can enter the amount of the asset; I will enter 16.95, and I will also choose to transfer from my Fiat and Spot '' wallet to my P2P wallet, then I will click on Confirm to transfer.
- The asset will be transferred instantly when confirmed my usdt in my P2P wallet.
A verified Binance account is needed to sell on Binance using the P2P system. My verified account has been shown already. Now let's follow the steps below to sell,
- Locate P2P in the Wallet section on the homepage. Then click on P2P.
- Click on "Sell" just by the asset you want to sell; in this case, I want to sell USDT; hence I click on it. But first, the asset should be transferred to your P2P account if the money is in your spot wallet.
- Out of the many Ads available, select the buyer you want to sell to. Ensure the buyer buys the asset you want to sell and has the payment method you want to receive the money through. Care should be taken in order not to fall into the hands of scammers.
- Enter the amount of the asset you want to sell; the corresponding amount in your local currency will be shown. Also, select your preferred payment method according to the ones that have been shown. In this case, momo.
- I have to wait for the buyer to make the payment and click on marked payment.
- I will release the asset to him if the payment is confirmed. The buyer has made the payment, so I will proceed to release the asset.
4.What are the things to keep in mind during P2P trade and describe its four advantages and disadvantages? (own words).
To perform successful P2P trading, then there are some things we should take note of. Some of these are,
Only verified Binance users are allowed to perform the P2P trading.
The success rate and the number of completed transactions. Users with a high success rate tend to be more trusted and hence can be traded with.
The exchange rate of the buyers should be taking note of; I will advise we note the international trading rate between your local currency and the asset you are selling; this is to avoid scammers. These scammers put high rates to dupe people, most especially people who are new to the platform.
User should note any form of fraudulent activities can lead to temporal or permanent suspension of the account.
Advantages
Users can purchase digital assets using their local currency.
Trading on the platform is free; users do not have to pay any transaction fees or any other fees.
Buyers and sellers can interact and negotiate with each other without the need for a third party or middleman.
Users must be verified before they can use the system to ensure the safety of the trade and to tract scammers if necessary.
Disadvantages
The platform makes it safe for trading, but scammers can cause loss of assets or delay when an appeal is filled.
The rates or the payment method may not be favorable to the buyer or seller.
It sometimes takes some time before the buyer makes the payment; this prolonged business down.
And also, the sellers can delay releasing the asset after the buyer has made the payment.
Conclusion
To summarize my post,
Golden cross pattern shows that the market reverses from a bearish trend into a bullish trend. This pattern occurs when the short-term moving average indicator line crosses the long-term moving average indicator line.
Death cross pattern indicates that the trend is about to reverse from a bullish trend into a Bearish trend. This is also formed when the moving average indicator line passes over the short-term moving average indicator line.
The Binance P2P system helps traders to trade crypto assets using their local currencies. This is done without the need for any middleman. With this system, assets are bought and sold with ease.
Thank you for stopping by.
Cc: @yohan2on
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Season 3 | intermediate course class week 5
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