Crypto Academy Season 3: Week 5 || Homework post for Professor @yousafharoonkhan||

Welcome to my homework post for Professor @yousafharoonkhan who has delivered a very detailed lecture on Death Cross and Golden Gross and also on the topic "How to use Binance P2P".

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Q. 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?

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Before we start explaining Golden Cross (GC) and Death Cross (DC), I will explain about moving average as MA is the integral part of Golden Cross and Death Cross. In trading world, every now and then, we will see that there is something being said about Moving Average.

Simple Moving Average is calculated on the basis of period which is being taken as the base, for example, if Moving Average is 50, it means that the average of 50 previous candles is being calculated. If the timeframe is 1hr, it means that 50 Moving average is the average of previous 50 hourly candles. In the same way, if timeframe is Daily then 50 Moving Average will present average of previous 50 days candles.

While applying this strategy of Goldern Cross and Death Cross, Moving average of 50 and 200 are applied on the chart and then we look for above said crosses on the Charts.

What is Golden Cross?

Golden Cross is an indication that is considered as a signal that the market is ready to move upwards. When 50 Moving Average Crosses the 200 Moving Average to upside, it is called Golden Cross.

50 Moving Average is called Short Moving average and 200 Moving Averages is called Long Moving Average. So, when Short MA crosses the Long MA towards upside, it shows the intent of the buyers who want to drive the market upwards. With the help of Golden Cross, a trader can analyze the trend of the market and can enter the market by buying some crypto asset. In this way, Golden cross can help the trader to benefit from the very beginning of uptrend and he can enjoy the full rally of Bull market.

This Golden Cross indicates for both Long term and Short term trend. If a trader is a long term trader, he will use timeframe of Daily and Weekly. Thus when GC happens on such time frames, it will indicate the Bullish trend for Long term. On the other hand, If a trader is day trader or short term trader, he will use shorter time frames and GC on such time frames will indicate Bullish trend for short term.

What is Death Cross?

When the Short Moving Average (50 MA)crosses the Long Moving Average (200 MA) towards downside, it is called Death Cross. It indicates that the market is ready to go short and it will move downwards.

It means, Death Cross is an indication about the start of a Bearish Trend in the market. It happens when big investors withdraw their investment from the market and the market moves to downside. A trader can benefit from this indication and can exit the market at the right time. Where both sided trading on crypto assets is allowed, a trader can also exit the market and can go short with a Sell trade.

Death cross indicator is valid for both long term and short term trends. It depends on the trading style of the trader, if a trader is using Daily or Weekly time frames, a DC on these charts will indicate Long term Bearish trend and similarly, if trader is a short term trader and using hourly or shorter time frames, DC on such charts will indicate short term Bearish trend.

Significance of DC and GC and their impact on the market.

In this section, we will discuss about the significance of DC and GC along with their impact on the market.

1. A Golden cross happens at the end of Downtrend rally and it gives indication to the trader that the Bearish rally is ending and a trend reversal is about to happen. On the other hand, Death Cross occurs at the end of a Bullish of Uptrend rally, and it gives indication that the uptrend rally is ending and a trend reversal is imminent.

2. Both Death Cross and Golden Cross are considered indication for trend reversal, but mostly it is considered a confirmation of trend reversal. So, when DC of GC cross occurs on any crypto asset chart, it confirms that the trend has changed and reversal in in progress.

3. Short Moving Average moves fast and it gives indication of trend reversal very early and a trader is able to enter the market at the beginning of the new trend and can benefit from whole rally. In this way, a trader can enjoy the whole rally with the help of this strategy.

4. When any of these crosses happens, then Long term Moving Average is considered as Solid Dynamic Support or Resistance. When it is Bullish rally in the market, Long MA will act as Dynamic Support and when it is Bearish rally in the market, Long MA will act as Dynamic Resistance. So, these Moving Averages also work as Support and Resistance in the market.

5. As I have mentioned that these crosses happens on the end of the rallies, so a trader can easily exit the market on occurrence of any of these crosses. In this way, with the help of this strategy, a trader can exit the market at the right time.

6. As we all know that market is driven by the traders and big traders and institutions can easily move the market in the way that they want due to their big investment. These institutions and whales accumulate at low prices and they buy at low price and Golden Cross indicates that the Accumulation is in progress and a small trader can follow these big traders through this strategy and go long in the market. On the other hand, when Death Cross happens, it shows that big institutions and whales are exiting their positions and Distribution is in progress, and small trader can also follow by knowing through this strategy and can exit the market at the right time. Thus applying this strategy, a trader can easily know the trend reversal and benefit from it.

7. As these crosses are also considered as confirmation of trend reversal and people follow it, so when a GC happens in the market, small traders also buy along with big institutions and it makes the uptrend movement more faster and a Bullish rally is established.

8. On Death Cross confirmation, small traders also exit their positions along with big institutions and whales, so it moves the market more fastly to the downward and in this way a Bearish rally is established.

So, keeping in view all above points, one can easily understand that DC and GC can have a great impact on the market and after occurrence of these crosses, small traders also follow the bigger traders and market moves fast to either way, up or down.

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Question No. 2.

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How many days moving average is taken to see Death cross and Golden cross in market for better result and why?

There are two Moving Averages that are applied and used on the chart to see Death Cross and Golden Cross. One is called Short Moving Average and other is called Long Moving Average. This combination of Short and Long MAs is made to know the trend reversal early on the chart.

Short MA moves fastly and thus it indicates very early that the trend is about to change. 50 Moving Average is used as Short Moving Average to know early the trend reversal and better results. When a trader is using Daily time frame, it will show the average of previous 50 days and if the trend is changing, it will show very early. Trend reversal does not happen in short time, it takes some time and thus 50 MA is used to know the trend reversal at an early stage.

Long Moving Average moves slowly because it is based on longer period of time and thus it moves slowly. In DC and GC 200 Moving Average is used as Long Moving Average and it represents the averages of previous 200 candles and these candles can be of hours or days. It depends on the time frame being used.

In this strategy, when SMA (Short Moving Average) crosses the LMA (Long Moving Average), DC or GC occurs in the market, and a trader is able to know the trend reversal at early stage and act accordingly.

How to see death cross and golden cross on the chart.

In this section of the post, I will show how to apply these moving averages on the chart. For this purpose, I will open https://www.tradingview.com/ and open any crypto asset chart. I have opened chart of STEEM/BTC and click on Indicators button as mentioned in the screenshot below.

Next, a list of indicators will appear where type MA or Moving Average in the search bar, as I have written "ma" and then result will open and Click on Moving Average to apply it on the chart.

Moving Average has been applied on the chart. Now click on setting button as mentioned in the screenshot on the left sied and then put the value of Length that is 50 and I have written on it and change the style as you want.

Long Moving Averaged of 200 is also applied on the chart in the same way as discussed above and change the length to 200. Now both Moving Averages are applied on the chart.

Now the both Moving Averages are applied and it looks like as given below.

Explain Death cross and Golden cross on the chart, (screenshot necessary)

In this section, I will show on the chart how to identify the Death Cross (DC) and Golden Cross (GC) with the help of screenshots. Below is the picture of Golden Cross which has happened on Daily time frame at STEEM/BTC.

After the long Down trend, the 50 MA at least crossed the 200 MA from downside to upwards. This is how a Golden Cross appears on the chart. This is Daily time frame chart and you can see how it is showing that the market is now ready to go upwards and the market has gone upwards after this signal.

This is Daily chart of BTC/USD and you can see that BTC has moved upwards and then it started moving downwards. After some time, 50 MA crossed the 200 MA to downside and it is perfect example of Death Cross. After a long upward rally, then BTC moved downwards and it is being shown on the chart that market is now going downwards.

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Question No. 3.

What is Binance P2P and how to use it ?

Peer to Peer (P2P) is a trading in which only parties in the transactions are involved and no third party or exchange is involved. In P2P trading, a buyer directly purchases cryptocurrency from the seller and similarly a user directly sells his cryptocurrency to another user. So, it is clear that through P2P trading, a user can buy or sell cryptocurrency directly without the presence of any third party. P2P trading is very easy and it gives opportunity to the user to trade nationally and withdraw his money directly to his account. This account may be Bank account, or Mobile account like Easypaisa and Jazzcash in Pakistan. I use Easypaisa for my withdrawal through p2p trading. It is a very big facility to withdraw direct to any of users account without any additional fee.

Binance is one of the top rated Exchange and it provides the facility of p2p trading. Exchange acts as facilitator in p2p trading and there is no fee charged for this kind of trading. To be able to use Binance p2p services, one has to open an account with Binance exchange and it is quite easy to open account and then approve the account by providing essential documents of your identity. Once the account is approved, one can easily use p2p trading service of Binance.

Now I will show how one can use this p2p trading feature on Binance through screenshots.

First of all login to your Binance account and Click on wallet. I am using mobile version of Binance Application. Then click on "Wallets"

You can see below the option of Wallets and Click on it. Then next will appear as given below.

Now I am on my Wallet page where my whole amount is being shown and it is in Spot. Then Click on P2P and the next screen will appear as given below.

This is the main interface of P2P page on this application. There you can see three options available which are Buy, Sell and Transfer. On this page, one buy, sell or transfer to any user or account.

How to transfer cryptocurrency to p2p wallet?

In this section, I will show you how to transfer cryptocurrency to p2p wallet.

First of all, Click on Wallets, and Overview page will open. There is option of Transfer and click on it.

Then the next interface will open where necessary information is to be added. "From" means where from the cyrpto asset to be transferred and "To" means where it will be transferred. Then choose the cryptocurrency is to be transferred and fill the amount to be transferred. It is shown in the screenshot below.

Now Click on Transfer and it will be transferred to P2P account as shown in the screenshot below.

Below is the screenshot where it can be seen that the cryptocurrency has been transferred to p2p account and it is being shown on this page.

Following these steps, one can transfer cryptocurrency to P2P account easily.

How to sell cryptocurrency in local currency via p2p (any country or coin)(screen shot neccessary to verify account)

Now in this section, I will show how to sell cryptocurrency in the Local currency via P2P.

Go to P2P section on the app and then Click on "Sell".

The next interface will open as given below where many offers will be shown who want to buy your cryptocurrency. Choose the one who suits you or who offers payment in the way you want. I want in Easypaisa and I will search for those buyers who will pay in Easypaisa. So I choose the one.

As I have USDT in my account, I have mentioned it in the picture and I want to sell USDT. A buyer is offering good rate and also payment will be made in Easypaisa, So I selected this one. The next interface will open as below.

On this page, I will fill the amount I want to sell and then select the payment method and then Click on "Sell USDT"

But before clicking on Sell, One should read the terms of the buyer in which he will mention the time window. Time window means the time required to complete a transaction. If you are satisfied then Click on Sell.

As soon as, one clicks on Sell, then the new interface will open as below.

Now next click on chat icon and chat with the buyer.

Then on confirmation of receipt of payment, then confirm the trade.

Next interface will open as given below.

Now payment will be completed and user will be sent a code. After entering the code, the payment will be confirmed.

Finally the payment is completed.

Keep in mind that you must confirm the receipt of amount in your account and after being satisfied that the full amount has been received then click on Confirm and complete the transaction. Then Binance will release the USDT to the buyer after your confirmation.

If transaction is not completed within the time mentioned in time window, then the transaction will be cancelled and your amount will be returned. This is the best facility of Binance to its users.

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Q. 4. What are the things to keep in mind during P2P trade and describe its four advantages and disadvantages.

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Following are some points that are needed to be kept in mind during P2P trade.

1. Take full knowledge of P2P trading before you start trading.

2. Have patience and search for the best seller/buyer who has completed transactions successfully. Be aware of the fraudulent people and search for the buyer with good rating.

3. Do not confirm the transaction until you receive full amount in your account. After receiving the full amount, then confirm the transaction and mark it as completed.

4. Do not accept any offer from the buyer where transaction is to be completed via third party account. Only make transaction direct with the party and do not use third party account.

Advantages of P2P trading.

1. P2P trading is much faster than any other trading system. A transaction is completed within very short period of time. As soon as both parties confirm the completion of transaction, the transaction is confirmed and it is complete.

2. P2P trading is very easy way of trading. There is not much required for this kind of trading and it is completed very fastly.

3. P2P trading is carried out directly by the parties involved in the transaction and there is no third party involved. So it is directly carried out by the parties without any intermediary involvement. As there is no third involved in it, so buyer and seller have not to pay any fee or other charges for the transaction. It means that there is no fee for P2P trading.

4. Binance P2P transaction is completed after the confirmation of seller that he has received the amount in his account. Otherwise transaction will not be completed. Hence sellers crypto assets will not be issued to the buyer until the full amount is not received in his account.

Disadvantages of P2P trading.

1. As there is no central authority or intermediary is involved, if any user lost his amount due to some fraudulent activity, it is not easy to recover the lost money.

2. Anyone can make account and take part in p2p trading. So there is possibility of fraudulent accounts who can carry out fraudulent activities without any problem and user can suffer loss of his crypto asset or money.

3. P2P trading is considered fast way of trading but if one party does not respond quickly then it can be delayed and other party can face problem. Thus there is always possibility of delay.

4. P2P trading is still in its early stage and not much popular. It will take time to be popular. Not all the exchanges are offering P2P trading thus it has low liquidity and not available on every exchange.

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Conclusion.

From this lecture, I have learned about P2P trading and also discussed advantages and disadvantages of P2P trading. After this lecture, it is quite easy for all of us to do p2p trading on binance and withdraw our money in local currency directly into Bank account or other mobile accounts.

We also learned about a strategy called Death Cross and Golden Cross that has been applied on the chart and it helps traders to know about the trend change in its early stage. This strategy can help the traders to benefit from the whole rally and exit at the the right time with good profit from the market.

Thanks in anticipation.

Regards,

@mawattoo8