Puria Method Indicative Strategy- Steemit Crypto Academy- S5W4-Homework post for @utsavsaxena11.

Hello crypto gears and welcome to another fantastic moment. This is the homework given by our able professor @utsavsaxena11, and I'm glad to participate in the homework. It's all about trading with puria method indicative strategy. Please stay connected

The puria method indicative strategy was designed in 2010 as a strategy that is very useful when it comes to trading within a short time range. It's the combination of the two moving averages and MACD. Trading with this strategy enables traders to trade multiple times per day thereby increasing their chance of making more trade and profit if the strategy is well utilized

The puria method indicator strategy is the combination of two moving averages, and as a trend confirmation, it allows traders to determine the price movement of an asset, act as support and resistance, and we have the MACD, which differentiates a bad signal from the good ones, and make traders determine when there might be a reversal in the market as it filters bad from good signals to know the proper point of entry and exit

This is the setup of the two moving averages weighted with the lines set as purple and black and the length as 75 and 85 with low and close as the source. Now that the first setting is done, let's see the MACD settings

The moving average convergence divergence settings would be changed from the default settings just as we changed the weighted moving average settings. In the case of the MACD, three settings would be initiated to make the chart perfect for the puria method indicative strategy. Let's see the image below

It's advisable to follow the principles of the initiator to get a better signal. Traders can use their own desired time frame if they see it as the best approach but using between 5min and 5 hours time frame is better, as this would give the signal needed from the indicator. We should also not forget that this indicator is a short time indicator that traders can use to perform multiple trades per day, so this means the time frame should not be too long if it's to be used as designed

Identifying trend in the market is determined by the direction of movement of the moving averages line and also the rate at which the movement of the price is filtered by MACD

As earlier discussed that three lines make up the puria method indicative strategy (2 moving averages and MACD), all these lines would be used to confirm the trend of an asset. Let's see the image below and analyze it

The above image shows the bullish movement of asset XRP (Ripple coin) paired with BTC. The moving averages show the bullish trend confirmation when the lines cross the price to the downside and the price is above it. Anytime the MV Crosses the line and candlesticks started building above it, it's a confirmation that a bullish market is happening and at this point, a trader can take a short time profit using a short time frame

The MACD also help in this scenario. When the MACD line crosses the 0 mark on the chart, it also signifies a bullish movement, so both the moving averages and the MACD plays an important role in identifying market trend

The puria method can be used to identify trend reversal. When the price of an asset is trending, the moving averages line trends with it, but once the line makes a U-turn and crosses the price, we can get the glimpse that a reversal is about to occur. Also, as I explained earlier, the MACD can also show that a reversal is on the way when the line crosses the zero mark either up or down. Let's check the graph to see both bullish and bearish reversal identified by the puria method

We can obviously see from the chart the bullish and bearish reversals identified by both the moving averages and the MACD. The moving averages crosses the price and began to come down as the price of the asset falls, and likewise, the MACD line crossed below zero but the trend didn't go forever. There was later a reversal, and we can note that from the chart. Immediately the moving averages break the price in the opposite direction and the MACD surged above zero, a bullish reversal is identified. It goes like that several times in this chart

The CCI indicator is used in place of the MACD here to see if it can also work to determine the market movement or trend confirmation. And yes it does, because the CCI indicator also has a zero line that stands between the positive and negative values. When the price of an asset moves beyond the zero level in a positive direction. The market is said to be in a bullish trend especially when it moves over 0 to +100 in an uptrend, and 0 to -100 in a downtrend. The CCI is mainly used to spot the overbought and oversold level in the market. So from the way the CCI works, we can say it's also a perfect tool to use with the puria strategy. Can we see if this is true? Okay, let's check out some images

As we can see from the image above, the CCI was used to identify the bullish trend. Just as the moving averages displayed the upward movement when the lines crossed the price to the top. The bearish trend confirmation happens to be the opposite. When the moving averages cross the price to the top and the CCI moves below 0 going further to -100, it's a bearish confirmation. Let's see the image below.

Question 4

Set up 10 demo Trades (5 buying and 5 selling ) on 5 cryptocurrency pairs using puria method indicative strategy. Explain any 2 of them in detail. Prepare a final observation table having all your P/L records in these 5 trades

From the image above, the price tried to break the moving average lines multiple times but it keeps bouncing back. Just as explained before that the line serves as support and resistance, the price finds it difficult to cross. After a moment, I noticed that the support has been broken and this time, the MACD line has moved above 0, so I allowed the second bullish candle to build then I place a buying order using a 1-minute time frame. I was ready to exit the market as soon as I make a profit which I did. I made a whopping $800.36 within a short period.

Sell

From the above image, I placed a sell trade. The moment the price crossed the moving averages, and the MACD confirmed a downward signal (line below 0), I placed my trade using a 1-minute time frame and 1:1 risk-reward ratio to minimize loss and take profit before the market turns against me. You can see the points marked on the chart. A profit of $0.14 was made in the trade.

Table

Pair Buying Price selling Price profit loss time frame

S.no.	pair	Buying price	selling price	profit	loss	time frame
1	BAT/BTC	0.0000233	-	0.03	-	1M
2	LIN/USDT	19.87	-	0.01	-	1M
3	XTZ/BTC	0.00009400	-	-	-0.09	1M
4	-BEAM/USDT	0.6817	-	0.22	-	1M
5	BNX/USDT	85.4	-	800.36	-	1M
6	XTZ/BTC	-	0.00009359	0.14	-	1M
7	-LINA/USDT	-	0.04010	0.00	-	1M
8	BTC/TETHER	-	48392.46	-	-0.01	1M
9	RUNE/USDT	-	7.008	1.56	-	1M
10	UNI/USDT	-	15.90	2.00	-	1M

Question 5

You have to make a strategy of your own, it could be pattern-based or indicator-based. Please note that the strategy you make must use the above information. Explain full strategy including a time frame, settings, entry-exit levels, risk management, and place two demo trades, one for buying and the other for selling

Creating a strategy based on patterns and indicators. I will be using the shark-fin pattern to create my strategy with respect to the information described in the question.

The shark fin pattern is normally built up due to high market volatility. This is when we see the candlesticks forming V shape in the market. The shark-fin pattern can form on both bullish and bearish trends. When it happens during a bullish phase, an inverted V is formed.

Talking about the time frame that can be used for the shark fin pattern, it's advisable to use a short time frame in other to spot the fin shape quickly. We can use 1, 3, 15, 30, or 1hr time frame while trading using the shark fin pattern and if we believe we can use other time frames too, it's okay, but the short time frame is the best if a trader wants to do multiple trades per day.

The shark fin pattern does not have any form of settings because it's not an indicator. So let's see how to enter a trade and exit using the sharkfin pattern.

I would love to use an indicator to support the shark fin pattern to get the right signal and know when to enter and exit a trade. The indicator I'm going to use is the RSI (RELATIVE STRENGTH INDEX). This indicator can easily spot the level of overbought and oversold, and it can predict price movement, so I think it would help to spot reversal when the V shape forms on a chart.

Let's add the RSI to a chart and see how both of them (shark fin pattern and RSI) would work to spot entry and exit points.

No adjustment was done to the indicator. I used the default settings. From the above image, the entry point was determined using the level of the RSI. when the RSI line moved below 30 and got close to 20, there was a reversal, and why this happened is because the market is in an oversold level, so when the reversal made V shape, the market is likely to go up, so after we've confirmed like three bullish candles, we can enter the trade.

As for the exit, once the candlesticks have successfully built to make the V shape we can exit the market without waiting to gain more because it's better to employ risk management when trading.

This is the first trade I entered using the combination of the shark fin pattern and the RSI indicator. I made a profit of $3.50 within a short period of entering the market and closed the trade.

This is the second trade (placing a sell order)

The entry point was determined by the level of RSI when it reaches the overbought level. I allowed the bearish candle to build and form an inverted V shape before entering the market

Conclusion

The puria method indicative strategy is a good strategy that can help traders trade with ease because of the combination with other indicators that can help predict the price movement and also spot trend and filter bad signals. The unique thing about the puria strategy is that it can be used with several indicators depending on how each trader understands its usage.

Thanks to the prof @utsavsaxena11 for the wonderful homework

All images used are screenshots from tradingview.com

Thanks for reading.

This is ckole the laughing gas.

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