Steemit Crypto Academy | Season 3: Week 5 | Homework post for [ @yousafharoonkhan] .. ath cross & Golden cross, How to use Binance P2P trade.
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.)
Golden cross as the name implies is indication of something good and in crypto market, what good can happen. We know market is about money and good thing therefore is rise in price of asset. So golden cross indicates forthcoming bullish trend.
Golden cross is a chart pattern formed by crossover of two moving averages - short and long moving average . The actual orientation of cross is that short term moving average crosses above long term moving average.
Death croas as the name implies is predictive of something adverse and in market there can be nothing adverse than crash of market. So death cross indicates forthcoming bearish trend. Death cross in a chart pattern is formed by two moving averages - long and short moving average. The actual orientation at cross is that short moving average crosses below long moving average.
Significance of GC and DC lies in their predictive nature and that too with good accuracy. The accuracy of these chart patterns is increased by simultaneous use of other indicators like volune and price action. Price action always lies at the heart of market cycle irrespective of the indicator and the volume indicator has been shown to reinforce the reliability of DC and GC. GC indicates bullish market and DC signals bearish market.
So on signaling GC traders can enter into the market and take buy position. It must be
remembered that, no indicator should stop trader from following the basic rules of trade. By saying so, i mean that traders should set stoploss and take profit range as per their risk management strategy. Nothing is certain and unexpected moves in price action in crypto market is not uncommon. So don't compromise with basic trading rules.
Similarly, on signaling DC, traders holding any asset should exit their position. On the other hand, traders can benefit from death cross other way, that is by short selling. In Short selling, a trader sell their position at high price and buy back at low and is benefitted in that way.
How many days moving average is taken to see Death cross and Golden cross in market for better result and why?
Two moving averages are used to see DC and GC. Short moving average of 50 periods and long moving average of 200 periods are used. This combination of long and short moving averages is used to provide better results and trading signals.
Short moving averages move faster and it moves closer to the price line where as long moving average is slower and remains far from the price line. Short moving average of 50 periods is based on average price of last 50 days on a daily time frame , last 50 minutes on 1 minute time frame and last 50 hours on an hourly time frame. So short moving average indicates more recent price change and it is this indicator on the basis of which traders gain entry into the market.
Long moving average of 200 periods indicates price moment over 200 days on a daily time frame , 200 hours on hourly time frame and 200 minutes on 1 minute time frame . So this indicator takes into account farther price movement in relation to the current value. So crossover of short moving average above or below the long moving average confirms trend reversal.
How to see death cross and golden cross on the chart. Explain Death cross and Golden cross on the chart, (screenshot necessary)
Let's look for GC and DC over charts. I'll be using trading view app for this purpose.
Launch the trading view app and we got to see the main page of app. Select crypto token to be analysed. I choose ETH/USD.
From top panel of options select indicators.
Next a search bar is provided where we type moving averages. Apply moving average twice on chart and select periods from setting as 50 and 200.
Indicator is applied. Next look for the crossover of two lines.
DC on chart.
Look at screen shot below , ETH/USD chart on 15 mins time frame. I have marked arrow at the crossover of two moving averages.
We can see that the 50 moving average crossing 200 average from above downwards at about 1980$ price of ETH, and then the bullish really of price that followed the crossover would have definitely made a trader holding ETH die of frustration. However there is a possibility to take advantage from falling market on signalling the death cross by entering into sell trade and then buying later, on reversal of the trend.
GC on chart
Look at ETH/USD chart on 15 min time frame. I have marked golden cross with arrow.
We can see that 50 moving average crosses 200 average from below upwards and then the bullish raliy of price that followed the golden cross would have been a sigh of relief for the traders holding their position and that would have been no lesser than gold.
So from the above examples, we have seen how these crosses are doing wonders for traders.
What is Binance P2P and how to use it ?
Binance P2P (Peer to Peer) is a service provided by Binance exchange that allow traders to interact with each other and buy or sell cryptocurrencies or Fiat currencies. Two parties are involved in this service , one is of buyers and other of sellers.
Buyers post their ads for particular crypto and that ad is posted in P2P market . When a desired seller wants to take that trade, he places buy order after reading terms set by seller. The seller on receiving order, releases cryptos/fiat to the buyer.
When a seller places sell order , his funds are escrowed by the Binamce escrow service. In case of any dispute between two parties, either of them can raise issue to the customer care. In case the seller himself failed to execute the trade on time in binance p2p service, customer care releases funds from escrowed funds to buyer after proper verification. It must be kept in mind that binance p2p service cannot be used without KYC verification.
How to use.
As mentioned above, to use binance p2p service you must be KYC verified.
Now let me demonstrate it with the help of binance app .
Open the binance app and from the main page of the app click on "Markets" from the bottom panel.
Next select P2P and a list of available cryptos will be loaded where we can do P2P trades. In the example below , i have 62 buy options available for USDT. Similarly, we can buy or sell in other cryptos too.
How to transfer cryptocurrency to p2p wallet?
Again starting from the main page of binamce app. Click on "Markets " from the bottom panel of options.
Next we have to click on "Transfers".
Than we have to select "From" and "To".
I choose from "Spot " Wallet *To *"P2P".
Next i selected token as "BTC" . Than i selected amount to be transferred.
- Than click Transfer amd i am done. We got to see success notification.
How to sell cryptocurrency in local currency via p2p (any country or coin)(screen shot neccessary to verify account)
Open the binance app and from the main page of the app click on "Markets" from the bottom panel.
Next select P2P and a list of available cryptos will be loaded where we can do P2P trades.
From top of the page, select "sell" option.
Next select the crypto to be sold. As i have transferred BTC to my spot wallet. So i selected BTC. Next , number of buyers were seen. I selected one who was offering max price. Also we should look for the limit of buyer as per our amount because traders keep limit on amount they can sell.
I selected whole amount by clicking on All. My total BTC was 0.001476 and for which i was getting 4484.2 INR (indian rupees)
i choose Google pay as payment method. Please note that, we need to add the payment method, if we are performing it for first time or we want some new payment method to be added.
Than i clicked on "sell BTC". My order was placed. I was given 1 hour time during which i was supposed to receive payment and confirm receipt.
Within few minutes , i received payment to my bank account. After receiving payment, i clicked on "confirm receipt".
Next i submitted my feedback as positive. I am done.
All this process is demonstrated below ;
What are the things to keep in mind during P2P trade and descrbe its four advantages and disadvantages.(own words)
Things to be kept in mind.
Transaction may take time to get executed depending upon window period.
Possibility of dispute between two parties cannot be ruled out.
Read terms and conditions carefully , that are being set by buyer/seller like limit amount , window period and payment method.
Don't release funds untill you receive ordered amount of fiat or crypto.
Don't accept receipt until you check your recieved amount.
Don't unneccearily make any appeal to customer service.
if you place an buy advertisement, your funds are locked.
Only buyer can cancel his order.
Advantages
P2P offers higher level of security because the trade is executed only between those users whose account has been KYC verified by the Binance.
Diverse ramge of prices are available. So we have options to choose from.
Customer service is available to make use of escrow service in case of any dispute.
Trades are executed more rapidly than limit orders. As i mentioned above that diverse price options are available. Same can be offered by placing limit order but than we will have to wait for market price to be pushed to that desired level but in P2P buyer is willing to pay that much amount , only than order is placed.
Disadvantages
in case of any dispute between peers, process becomes cumbersome because one has to appeal to the customer service and then provide them proof of the transaction , once they are satisfied only then the issue is resolved . This whole process renders the sanctity of the trade.
Low liquidity is also a major problem of P2P because trade is performed between two users. So P2P is not viable option for professional traders and financial institutions who trade huge amounts.
Although not very slow but yes at times transaction takes time. In my example above, user has set one hour time window which means it was legal on his part to take an hour.
Payment method issues. Although it covers major and essential payment methods but still possibility is there that you may not be having even one among them. Other issues may arise at the banking level where users can have some specific banking issues that may interfere with trade execution.
Conclusion
Of the many indicators that exist, a combination of two moving averages, 50 MA and 200 MA forms a wonderful tool that helps in detecting bearish and Bullish trends in the market and therefore help us to gain profit and minimise the loss.
Among the diverse range of services offered by a versatile exchange namely "Binance", P2P is one among them. It is a sort of decentralized service on centralised platform with some pros and cons like other services but is worth exploring.
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Season 3 | intermediate course class week 5
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