Understanding of trading strategies for long positions: a case of study on Ethereum (ETH)

The world of cryptocurrency trade has become increasingly complex, with a wide range of strategies and tools available for investors. A popular approach is to take long cryptocurrency positions such as Ethereum (ETH), which have gained popularity while the Etheror of Things (IoT) market continues to grow. In this article, we will explore the concept of trading strategies for long positions and will provide a case of study on Ethereum performance using a specific strategy.

What are trading strategies?

Trading strategies refer to default rules or approaches used by operators to manage their investments on the market. These strategies can be based on various factors such as market analysis, technical indicators or fundamental analysis. Long position trading involves the purchase of activities at a lower price and the sale at a higher price for profit from the difference.

Understanding of Ethereum (ETH)

Ethereum (ETH) is an Open Source Blockchain Platform that allows developers to create decentralized applications (APPS). With its native cryptocurrency, Ethereum Classic (etc.), Eth has become one of the most used cryptocurrencies on the market. Its popularity derives from its strong growth potential and low volatility.

Trading strategies for long positions

There are several trading strategies that can be used for long cryptocurrency positions such as ETH:

• Day Trading: This strategy provides for the purchase and sale of a cryptocurrency within a single day, with the aim of closing the position before closing the market.

• Swing Trading: This strategy plans to hold a long position for a few days or weeks, taking advantage of short -term prices movements.

• Long -term investment

  : This strategy provides for the possession of a long position for a prolonged period, as months or years.

Study houses: Ethereum (ETH)

In this case of study, we will analyze the performance of HP using a specific trading strategy called «average inversion». The average inversion strategy is based on the principle according to which cryptocurrency prices tend to return to their average historical values ​​over time. We will apply this strategy to an ETH portfolio with a daily region of entry and exit.

The strategy:

• Daily entry: we would identify the price of the hat at the closing of every day of trading, which is used as a purchase point.

2

• Exit rule: we would close the long position when the price reaches $ 180, our output point, assuming that it has exceeded this level of at least 25%.

Performance:

We will follow the performance of our ETH portfolio for a period of 12 months using historical CoinmarketCap data.

| Date | Price Eth (USD) |

| — | — |

| 2017-01-01 | $ 11.33 |

| 2017-02-15 | $ 13.19 |

| … | … |

Using our medium reversion strategy, we identified the following:

• 2017-05-16: Buy Eth at $ 8 (entrance point) and sell to $ 90 (output point), with a 1156% profit in 1 month.

• 2018-01-10: Buy Eth at $ 35 (entrance point) and sell to $ 180 (output point), with consequent profit of 4000% in 3 months.

Conclusion

Trading strategies for long positions can be an effective way to manage risk and potentially generate investment yields. The medium reversal strategy is a popular approach that has shown that it is successful in the cryptocurrency market. By applying this strategy, we were able to identify profitable operations and build a wallet with a solid record track for 12 months.

important note

Trading strategies should not be considered an investment advice or a guarantee of success. The cryptocurrency markets are highly volatile and subject to significant prices of prices.

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