Understanding Trading Strategies For Long Positions: A Case Study On Ethereum (ETH)

Understand the trade strategies for long positions: Case study on Ethereum (ETH)

The world of cryptocurrency trading is becoming more and more complex, with various strategies and tools that are available to investors. The popular approach is to enter long positions in cryptocurrencies, such as Ethereum (ETH), which have gained popularity in the further development of the Internet of Things (IoT). In this article, we will examine the concept of trade strategies for long positions and present a case study on Ethereum performance using a specific strategy.

What are trade strategies?

Trade strategies concern predefined rules or approaches used by dealers for market investment management. These strategies can be based on various factors, such as market analysis, technical indicators or basic analyzes. The long turn of items include buying assets at a cheaper price and sales at a higher price that has used the difference.

Understand Ethereum (ETH)

Ethereum (ETH) is a blockchain open source platform, with which developers can create decentralized applications (DAPP). Thanks to the native cryptocurrency, Ethereum Classic (etc.), ETH is one of the most used cryptocurrencies on the market. Its popularity results from the strong potential of growth and low variability.

Commercial strategies for long positions

There are several trade strategies that can be used in long positions in cryptocurrencies, such as ETH:

• Trade Day : This strategy includes the purchase and sale of cryptocurrency in one day to complete the position before the market is completed.

• Hunch Trading : This strategy has a long position for several days or weeks and using short -term price movements.

• Long -term investment : This strategy covers a long position for a long time, e.g. B. months or years.

Case study: Ethereum (ETH)

In this case study, we will analyze the ETH results based on a specific commercial strategy called “Means Reversion”. The average reversal strategy is based on the principle that cryptocurrency prices usually return to their historical average values ​​over time. We will apply this strategy to the ETH wallet with the daily principle of entry and exit.

strategy:

• Daily entrance : We would identify the price of ETH at the end of each trade day, which is used as a purchase point.

• Long position : We would open a long position at ETH at the purchase point (common rule of entry) for each period of 10 days.

• Output rule : We would close the long position if the price reaches USD 180, our starting point, provided that it exceeded this level by at least 25%.

Peromance:

We will implement the results of our ETH portfolio for a period of 12 months using historical data from Coinmarketcap.

|. Date ETH (USD) award

|. — | — |

|. 2017-01-01 | 11.33 USD |

|. 2017-02-15 | USD 13.19

|. … | … |

Thanks to our central reversal strategy, we identified the following activities:

• 2017-05-16: Buy ETH by 8 USD (entry point) and sell for 90 USD (starting point), which leads to a profit of 1156% within 1 month.

• 2018-01-10: Buy ETH for 35 USD (entry point) and sell for USD 180 (starting point), which leads to a profit of 4000% within 3 months.

Diploma

Trade strategies for long positions can be an effective way to manage risk and potential achievement of investment income. The average reversal strategy is a popular approach that is successful on the cryptocurrency market. By using this strategy, we were able to identify a profitable business and build a portfolio with strong achievements for 12 months.

Important attention

Trade strategies should not be seen as investment advice or a guarantee of success. Cryptocurrency markets are very unstable and are subject to significant price fluctuations.

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