Crypto Academy Season 3 Week 4| Homework post for @asaj

Greetings to the professor @asaj. I have read your lecture about the topic Spotting Market Reversals With CCI. I have got much information about the topic and now I am doing my Homework task which is given by you.

First, let me clear you what is the meaning of CCI. So, The Commodity Channel Index (CCI) is a an indicator which measures what is the difference between the historical average price and the current price.

Question 1: Open a demo account on any trading broker and select five cryptocurrency pairs.

For this question, I have opened a demo account on MT5 (Meta Trader 5) which is a platform for forex and exchange markets. You can create a demo account on it by clicking on MT5.

After clicking on the link, you will reach on the official website of MT5 from where you can download the software.

Then, after downloading, you will get this type of interface which is shown in the screenshot below. Now, create a demo account on that and after creating Your account, you will get a default chart of EURUSD.

EURusd chart

Then, you have to add new set of coins. For that, click on the click to add option on the left side. Write the name of the coin which you want to add. And the chart of the coin will be added. There are not all the cryptocurrencies here.

I have selected the 5 pair of cryptocurrencies which are
(i) EURUSD,
(ii)EOSUSD,
(iii)ETCUSD,
(iv) USDJPY and
(v)LTCUSD.

Question 2: Create a market entry and exit strategy.

Well, it is important to have aware of the some things when we are entering or exiting the market. Every person has a different trading style and different trading strategies. When entering in the market, you should chech whether the market is in a bullish trend or it is in bearish trend before trading.

I have chosen the tradingview platform as it is easy than others and now, I am showing the market entry and exit strategies that I have dono by using the Commodity Channel Index.

Market Entey: Buy Trade

In the above screenshot, I have bought the pair of MATIC/USDT. At the resistance level, at the marked point, the price breaks the resistance level and then retest it.

After that, break the swing point level. When the price break the swing point level, That is the correct time to place a buy order. At the marked point, I have set the buy entry.

Exit Strategy: Sell Trade

In the above picture, I have selled a pair of matic/usdt using CCI. Price first breaks at the green Line which is the support level and then it will retest. After that it breaks at skyblue line which is swing point, the point where it breaks the swing point. And it is the point to place a sell order.

Question 3: Use the signals of the Commodity Channel Index (CCI) to buy and sell the coins you have selected.

For this question, I have shown the entry and exit position and market reversal of the coins that I have selected above.

chart of LTCUSD showing the reversal of market

chart of EURUSD showing the reversal of market

The screenshot above is showing the LTC and EUR coin overbought situation in the market and it is a market reversal point also where the traders might or not sell there position according to their trade as just like many panic traders do.

At this time, the cci is crossing +100 and this is chance for the traders that they can sell their coin and get profit making trades.

Question 4: Declare your profit or loss.

Now, I have bought a pair of TRXUSDT. I have chosen the trx coin for such strategy and then sold it. And the reason of selecting TRX I got profit while using swing break strategy. Now lets check to deploy this strategy while using CCI indicator.

I have taken a short term trade while using a time frame of 10 days. I have bought the TRX coin on the date 10-06-2021 and time was 21:07:45, when the price was 0.06974 and got 198.4 trx filled which costs for the investment of 13.83 USDT. The buy criteria is shown in the screenshot below:

After the buying of coin, I holded for 10 days but the market began to crash and went down, and due to the risk of loss, I sold the coin at the price of 0.06764 and filled 198.2 trx on the date 29-06-2021 and time 14:33:31. I got a LOSS of around 0.4 usdt and got a total 13.406 USDT as shown in the screenshot below:

Question 5: Explain your trade management technique.

The Trading management is very important to know, how to manage risk in a trade. As there are very high chances of getting profit in the cryptocurrency markets and similarly, there are high chances of loss as well.

As, in the above question, My management technique is not very good and so i had to face loss and I went against that I predicted. So it is very necessary to have good management techniques.

Actually I am a beginner, so I do not trade with a lot of risk. If I see a loss possibility, I sell the coin. I do not trade very much. I trade only 2 or 3 in a week.

CONCLUSION

• CCI (COMMODITY CHANNEL INDEX) is an indicator which provides approximately good trading positions to the trader.
• Before entering the real markets, It is best to practice with demo accounts as it gives you a clear information about the market.
• Through the lecture of my professor @asaj, I got to know many of the things about market reversal and I have done my homework task because of the professor. Thanks to him for making this wonderful lecture.