Understanding business strategies for long positions: Case study on Ethereum (ETH)
The world of cryptrading is becoming more and more complex, while investors are available in a wide range of strategies and tools. One of the popular approaches is to take long positions in cryptocurrencies, such as Ethereum (ETH), which are gaining popularity because the Internet market (IoT) is constantly growing. In this article, we will review the concept of commercial strategies for long positions and provide a case study on Ethereum results using a specific strategy.
What are business strategies?
Business strategies relate to predefined rules or approaches used by traders to manage investments on the market. These strategies can be based on various factors, such as market analysis, technical indicators or basic analysis. Long trade in items includes the purchase of assets at a lower price and their sale at a higher price for profit.
Understanding Ethereum (ETH)
Ethereum (ETH) is a blockchain platform with open, which allows programmers to create decentralized applications (DAPP). Thanks to the original cryptocurrency Ethereum Classic (etc.), it has become one of the most -used cryptometics on the market. His popularity is based on his strong potential for growth and low variability.
Business strategies for long positions
There are several business strategies that can be used in long positions in cryptocurrencies such as ETH:
1.
- Hunch Trading : This strategy consists in maintaining a long position for several days or weeks, using short -term prices.
- long -term investments : This strategy includes maintaining a long position for a long time, for example months or years.
Case study: Ethereum (ETH)
In this case study, we will analyze ETH performance using a specific business strategy called “average reverse”. The average reversal strategy is based on the principle that cryptocurrency prices usually return to their historical medium values. We will use this strategy in the ETH wallet with the principle of daily introduction and production.
strategy:
1.
- Long position : We would open a long position at ETH at the purchase point for every 10-day period (principle of joint entry).
- Output rule : When the price reaches USD 180, we would close the long position, provided that this level exceeded at least 25%.
Power:
We perform the efficiency of our ETH portfolio over a period of 12 months using historical Coinmarketcap data.
|. Date Price ETH (USD)
|. — | — |
|. 2017-01-01 | 11.33 USD |
|. 2017-02-15 | $ 13.19
|. … …
We identified the following stores using our reverse change strategy:
- 2017-05-16: Buy ETH for 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.
Application
Business strategies for long positions can be an effective way to manage risk and potentially generate a return on investment. The average reversal strategy is a popular approach that turned out to be effective on the cryptographic market. By using this strategy, we were able to identify profitable stores and build a portfolio with strong results for 12 months.
Important attention
Business strategies should not be considered an investment advice or a guarantee of success. Cryptoms are highly unstable and are subject to significant price fluctuations.