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

Understanding trade strategies for long positions: a study of the Ethereum case (ETH)

The world of cryptocurrency trading is becoming more complex, with a wide range of strategies and tools available to investors. One of the popular approaches is to take long positions in the Crypto currencies, such as Ethereum (ETH), which gain popularity when the Internet market (IOOT) is constantly growing. In this article, we will examine the concept of commercial strategies for long positions and provide a study of the Ethereum results using a particular strategy.

What are the trade strategies?

Trade strategies refer to predefined rules or approaches used by traders to manage investment in the market. These strategies can be based on different factors, such as market analysis, technical indicators or basic analysis. The long position of the item includes the purchase of property at a lower price and sell them at a higher price to achieve the difference.

Understanding Ethereum (ETH)

Ethereum (ETH) is a blockchain open code platform that allows developers to build decentralized applications (DAPP). Thanks to its original cryptocurrencies, Ethereum Classic (etc.), ETH has become one of the most common cryptocurrency on the market. Its popularity stems from the strong potential of growth and low variability.

Trade strategies for long positions

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

• Trade Day : This strategy includes the purchase and sells of the Crypto currency in one day, trying to close the position before the closure of the market.

• Hunch Trading : This strategy consists in maintaining a long position for several days or weeks, using short -term price movements.

• Long -term investment

  

  : This strategy has long covered a long position, for example, months or years.

Case Study: Ethereum (ETH)

In this case study, we will analyze the effectiveness of the ETH by using a certain commercial strategy called “means reversion”. The average reversal strategy is based on the principle that the prices of cryptocurrencies are usually returned to their historical average values. We will apply this strategy to the ETH portfolio with a daily intake and output rule.

Strategy:

• Daily entrance : At the end of each commercial day, we would identify the price of the ETH, which is used as a purchase.

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

• Exit principle : We would close a long position when the price reaches $ 180, our starting point, assuming that it exceeded this level by at least 25%.

Efficiency:

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

|. Price date ETH (USD)

|. — | — |

|. 2017-01-01 | 11.33 USD |

|. 2017-02-15 | 13.19 USD

|. … | … |

Using our average return strategy we have identified the following transactions:

• 2017-05-16: Buy ETH for $ 8 (entry point) and sell for $ 90 (initial point), which has caused a profit of 1156%within 1 month.

• 2018-01-10: Buy ETH for $ 35 (entry point) and sell for $ 180 (initial point), which caused a 4000%profit within 3 months.

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Trade strategies for long positions can be an effective way to manage risk and potentially generate investment return. An average twist strategy is a popular approach that has proven to be effective in the cryptocurrency market. Using this strategy, we were able to identify profitable transactions and build a portfolio with strong achievements within 12 months.

IMPORTANT ATTENTION

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