Analysis of Ethereum (ETH) Trading Strategy: Starting Guide
Cryptocurrencies have become increasingly popular in recent years, and many merchants and investors want to use the volatility of cryptocurrency currency such as Ethereum. As a beginner, it can be irresistible to move with the complex world of the cryptocurrency trade, especially in analyzing a particular property, such as ETHEREUM (ETH) trading strategies. In this article, we interrupt the basics of analyzing the ETH trading strategy and give detailed guidance to start.
Why do you analyze trading strategies?
Trading Strategic Analysis is crucial in the cryptocurrency shop as it helps merchants:
- Repair the chances of success : In order to understand the basic mechanical strategy, merchants can recognize possible traps and make founded decisions.
- Reduce the risk : Analysis of commercial strategies, dealers can develop a colorful understanding of market dynamics, which can help them avoid expensive mistakes.
- Increase profitability : Effective analysis allows merchants to optimize their portfolio and maximize yields.
What is a trading strategy?
A trading strategy is a set of rules that determine how the investor enters, goes out and manages shops based on market conditions. These rules are often expressed in the code or are written as script. A good trading strategy:
- Be clear : Easy to understand and follow.
- Be robust : Resistant to external influences (eg news, feelings).
- High -performance potential : consistent profits of products.
ETHEREUM (ETH) Trading Strategies
ETH is one of the largest and most liquid currency in the market, demanding high demand. Here are some popular trading strategies for ETH:
- Trend follows : This strategy includes the identification of fashionable samples of price and the entry of trend shops.
- Range Trading : This strategy includes identifying the level of support and resistance and entering stores in these province.
- Size : This strategy includes the short time of small crafts, using lower prices.
- Shooting Trade : This strategy includes the identification of strong shares (ie prices rise rapidly) and enter stores when they cross certain thresholds.
Step -By -Step Guide to Analyze ETH’s Trading Strategy
Follow these steps to analyze ETH trading strategies:
- Choose a trading platform : Select a reliable network trading platform that supports ETH trade such as binance, coinbase or kraken.
- Get to know API : Find out how to use API for historical market data and craft programming performance.
- Select Trading Algorithm : Select an algorithm that is adapted to the trading strategy (eg trend is the next span trading).
- Backtest Strategy : Backtest strategies using historical market data to assess its performance and identify possible traps.
- Follow and clean : Continuous monitor the performance of the strategy and clean it as necessary.
Example Code: Trend follows with Python
Here is an example of a Python code clip that shows a basic trend following a trading strategy:
`Python
To import pandas pd
In import of nump -k as np
Data on the filling of historical markets (eg final prices)
Data = pd.read_csv (‘eth_data.csv’, index_col = ‘time label’)
Determine the trend following the parameters of the algorithm
Short_window = 20
Long_window = 50
Calculate the short and long moving average
data [‘ma_short’] = data [‘closure’]. Rolling (window = short_window) .mean ()
data [‘ma_long’] = data [‘closure’]. Rolling (window = long_window) .mean ()
Determine the trend of the following rules
Def is_trand_up (t):
return (t> 0) & ((data [‘ma_short’].