Crypto Academy | Season 3 | Week 5 [Homework Post for Professor @yousafharoonkhan] Death cross & Golden cross, How to use Binance P2P trade
In this week's lecture we learned about the Death Cross, Golden Cross and Binance for P2P trading.
This is my assignment post for the professor.
Question no 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.)
Death Cross
The death cross indicator helps us in identifying a downtrend or a bear market. The indication could be of a long term or a short term as well.
We understand the trend direction through death cross by using to Moving Average (MA) lines. There are two moving average lines. For the calculation of average Price of a short moving average there is the 50 days and for the long moving average there is 200 days
The death cross is used to indicate a downtrend, ie, a bear trend. We can determine the trend shifting towards a bear market, when there is a cross between the two moving average lines.
When the 200 days Moving Average crosses the 50 days moving average creating a cross, and staying above the 50 days Moving Average there is a potential trend shift towards a bear market trend.
After a death cross, there is a potential trend shift from an uptrend bull market to a downtrend bear market.
Golden Cross
The Golden Cross indicator helps us in identifying an Uptrend or a bull market . The indication could be of a long term or a short term as well.
We understand the trend direction through Golden cross by using to Moving Average (MA) lines. There are two moving average lines. For the calculation of average Price of a short moving average there is the 50 days and for the long moving average there is 200 days
When the 50 days Moving Average crosses the 200 days moving average creating a cross, and staying above the 200 days Moving Average there is a potential trend shift towards a bear market trend.
After a Golden cross, there is a potential trend shift from a downtrend bear market to an uptrend bull market.
Now that we've discussed about the Death Cross and Golden Cross lets shed light on the Significance on both of these crosses.
| DEATH CROSS | GOLDEN CROSS |
|---|---|
| Death Cross indicates a trend shift towards a bear market | Golden Cross indicates a trend shift towards a bull market. |
| After a death cross, the 200 MA serves as a dynamic resistance level. | After a Golden Cross the 200 MA serves as a dynamic support level. |
| After a death cross there is an indication of the market shifting towards a downtrend market thus creating oppurtunities to place your sell trades | After a Golden Cross there is an indication of the market shifting towards an uptrend thus creating an oppurtunity to place yourbuy trades |
Effects of Death Cross and Golden Cross
After a death cross or a golden Cross there is a potential trend shift in the market. The effect that both of these crosses create is taking a market towards a trend reversal which will create buying and selling oppurtunities for the traders. The trend reversal could be for a long term as well for a short period of time.
In this demonstration above we can see the significance as well as the effect of the death cross and the golden cross beautifully. After a death cross there is a trend shift towards a downtrend bear market which provides the traders an opportunity for a sell trade
Fufther more in the example above we can notice that after the golden cross there is a significant trend shift which gave the traders am oppurtunity to place their buy trades for having profits.
Point to Remember: it is important to understand that just likr any other indicators of the market there is no guarantee on the trend shift after a cross. But still using other indicators alongside the Moving Averages, we can take good use of the Death Cross and the Golden cross.
Question no 2:
Explain the points given below.
How many days moving average is taken to see Death cross and Golden cross in market for better result and why?
How to see death cross and golden cross on the chart.
Explain Death cross and Golden cross on the chart, (screenshot necessary)
For a death cross and the golden cross to work effectively two moving average lines are mandatory.
Now there is a different combinations of the MA lines such as the 20 80 lenght or the 30 and 100 length but as conveyed by the professor the best MA lines to use for the death and golden cross are the 50 and 200 MA. The 50 period is taken as a short term and the 200 period is taken as the long term.
The reason of using the 50 and 200 MA is to have a strong indication of the trend.
Due to the usage of the 50 and 200 MA we are able to detect trend shift due to the Death Cross and the Golden cross.
When a death cross takes place, ie, when the 200 MA crosses the 50 MA and stays above, it indicates shift towards a bear trend
Similarly when a golden cross takes place, ie, when the 50 MA crosses the 200 MA and stays above, it indicates a shift towards a bull trend.
How to See a Death Cross and Golden cross on the Chart
You can use any platform you like such as Binance, TradingView etc.
I used TradingView
a) Go on Google.com and search for trading view.
You'll see tradingview.com on the top. Click on it.
b) You'll be directed on the Tradingview Website. Click on the chart option as shown in the picture below.
A simple Btc/Usdt chart will open
c) click on the Indicators option as shown in the Picture below
d) A tab of indicators will open. Type Moving Average on it as shown in the diagram below.
You'll get the Moving Average indicator on the chart
The MA indicator is set on 9 by default.
e) To change the input click on the setting button of the indicator as shown in the diagram below.
f) set the length to 50 for the Short term MA as shown in the diagram below
g) set the length to 200 for the Long term MA as shown in the diagram below
Your Moving Averages are ready to use. As you can see in the demonstration below.
Golden Cross on BTC/USDT
In this demonstration above the Golden Cross took place on the BTC/USDT on 2nd October 2020.
This, we know as we saw the 50 MA (green line) crossing the 200 MA (red line) and then staying above.
The golden cross indicated a bull trend shift in the market as we observe the market is moving in an upward direction.
This gives the traders an opportunity to place their buy trades and earn from the market capitalization.
Death Cross on BTC/USDT
In the demonstration above the Death Cross on the BTC/USDT took place on 12 May 2021.
This, we know as we saw the 200 MA (red line) crossing the 50 MA (green line) and then staying above.
The death cross indicated a bear trend shift in the market as we observe the market starts moving in a downward direction after the death cross.
This gives the traders an opportunity to place their sell trades and avoid losses in the market.
Point to Remember: sometimes right after the golden cross, traders place in their buy trends in hope of the bull trend. Similarly many traders sell their assets right after the golden cross thinking the market will go downwards. We have to remember sometimes theres crosses are for long time and sometimes for a very short period of time. But it has also been seen on charts that despite of the death cross market has moved upwards and despite of a golden cross the market has moved downwards
So it is always recommended to play smart and not just place trades right after any cross
The death cross and the golden cross were thoroughly discussed with their significance, effects and the demonstration of market. Hope its clear to you all. Lets move towards Binance P2P
Question no 3:
What is Binance P2P and how to use it ?
How to transfer cryptocurrency to p2p wallet?
How to sell cryptocurrency in local currency via p2p (any country or coin)(screen shot neccessary to verify account)
p2p is the trading (buying and selling) directly between two users without the interference of any third party. Binance p2p is a decentralized exchange platform which facilitates us in havimg p2p trades
In binance p2p there is a variety of currencies and Cryptocurrencies available. Which means you can sell or buy any crypto assets for your desired currency.
The Binance P2P exchange allows you to have complete control over your assets which is not seen in traditional exchange system. You have complete control over to sell your asset to anyone you want to buy from any seller that you desire.
Traders (buyers and sellers) can post advertisements of their assets and the price they are selling it for.
The Binance P2P system ensures the safety of your assets and does not let any frauds happen. For the safety of the traders' assets the Binance use the Escrow service.
For example if you are selling Steem for PKR, Binance will Escrow your steem which means that the Binance platform will bind your steem untill you've transacted the steem to the Buyer. Once you send steem to the buyer and the transaction is confirmed, you will get PKR and the Buyer will get his steem.
If there is a dispute between the buyer and sellet, Binance will resolve the issues between the traders with the facts that are presented.
Using Binance p2p
verification of my binance account
I'll explain step by step how to use the Binance p2p
a) Visit the Binance website
Click on login
b) Here you will have to enter your login details. Enter them.
c) Once you have logged in you'll see your main binance Homepage. Click on wallets, then p2p
d) when you click on p2p there will be this page showing the available assets and the options.
The options available are
Sell
Buy
Transfer
Send
How to transfer cryptocurrency to p2p wallet?
In this question I'll be demonstrating how to transfer Cryptocurrency to the p2p wallet. Follow the steps.
a) Click on wallet. And then on overview.
b) on the overview screen, click on transfer.
c) transfering from Fiat and Spot wallet to p2p
Enter the amount and then confirm
The asset will be transferred without any Transaction fee.
You can check it here
How to sell cryptocurrency in local currency via p2p (any country or coin)(screen shot neccessary to verify account)
VERIFICATION
To sell a crypto asset click on trade and then on p2p
The p2p page will be displayed where you'll see options of buy/sell.
The Cryptocurrencies. You will see the currency you want to sell for. I will choose PKR
In payment method which is displaying as All payments
After that it is necessary to find a trader that offers your desired range. Once you find one. Click on Sell USDT
the trader I chose offers various methods of transfer such as Easy paisa and Bank transfer
After you have clicked on sell USDT, there will be a window open. Enter the amount of USDT you want to sell. And click on SELL USDT
Now wait for your buyer to send you the money that you will get for selling your USDT. There is information regarding the buyer. You can also chat with the buyer.
The transaction will be marked as paid once the buyer sends you PKR. After that when the pkr is received you can Confirm Release your USDT which was secured by Binance team.
When the release is confirmed, your transaction will be completed. Alhumdulilah.
Question no 4:
What are the things to keep in mind during P2P trade and descrbe its four advantages and disadvantages.(own words)
Things to keep in Mind while trading in P2P
a) Reputation of the Dealer
This is a very important thing to check while trading p2p. We should check whether the dealer is verified or not. The number of transactions of the dealers and his reputation. If the dealer's rating is above 85% he/she is considered as a verified and a good dealer. Similarly if the dealer has 5000+ transactions then it testifies his credibility.
b) Releasing Your Fund before confirmation of order.
While selling your asset never release your funds before the confirmation that you've received the payment.
c) Payment Methods
This is for your feasibility to check your desirable payment method. Both the trader and seller should agree on a payment method for the feasibility of both.
d) Be aware of fraudulent activity
Sometimes scammers might try to send you fake screenshot of the confirmation of the payment. You should check your bank account balance or your wallet ballence to check that you have received payment.
e) Checking the Terms and Conditions
There are terms which dealers set according to their feasibility. Always read them. Such as the time limit or the transaction limit.
Lets discuss the Advantages and Disadvantages of the P2P trading.
| ADVANTAGES | DISADVANTAGES |
|---|---|
| The Binance P2P uses Escrow Service which ensures the security of both the buyers and sellers. | The Binance P2P exchange still has Low liquidity compared to centralized exchange. |
| Binance p2p has No Trading Fees which is a very big advantage as there are trading fees on other exchanges. | Even though there is no trading fees but the Trading speed is slow on Binance P2P. Without the confirmation of both the buyer and seller the exchange cannot be completed which sometimes takes very long. |
| There are Many payment methods in the Binance P2P exchange. To be accurate More than 150 payment methods are available. | If you somehow lose your funds you will NOT able to get it back |
| The Binance P2P exchange is a Global Marketplace with more than 180 countries which can use it. | Due to an open and a global marke t there is a chance of scammers on it who can do fraudulent activities. |
4 advantages and 4 disadvantages were discussed as asked by the professor.
This was a very lenghty and a very interesting lecture as we got to learn a lot in this lecture.
Im the first part of the lecture we learned about the death cross and the Golden cross and we can use these indicators to our advantage. Then I used these indicators on real time graphs for a better understanding.
In the second part of this lecture we learned about the Binance p2p exchange platform and how we can exchange our funds on the p2p trading.
This was overall an amazing lecture. I enjoyed making it and hope you had a good read as well.
Thank you. Assalamualaikum.
Regards,
@huzaifanaveed1
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Season 3 | intermediate course class week 5
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