We are gradually testing our knowledge through real trades. We are week 2 of trading contest. For this week, I would seek guidance from team and here is my first trade. I have traded DOT/USDT future with isolated leverage of 3x. Below are the details.
The name and introduction of the project token, and which exchange can be traded on, project/technical/team background, etc.
DOT is the native token of Polkadot network that was founded by Gavin Wood in 2020. Polkadot is popularly called next generation blockchai as it aims to seamlessly combine blockchains (Parachains) to foster interoperability along with other features of being highly scalable (via Parallel Processing) , energy efficient (PoS) , cost effective and eco-friendly. The transparent governance and heterogeneous sharding scalability are other distinctive features of Polkadot blockchain. The higher transaction throughput is because of parallels processing of transactions through multiple blockchains combined together. Nested relay chains shouldn't be under estimated while talking about scalability of Polkadot.
I would call it amalgamation of best features of earlier existing bockchains to form a hybrid blockchain by the name of Polkadot. Combining together of best features increased the practical use cases of the blockchain and that is what fosters mass adoption.
The native token of Polkadot is DOT. Just like many other networks, the native token of Polkadot confer the governance right on to the stakers. One more interesting and unique feature is that of bonding. Bonding is a mechanism through which DOT stakers are empowered to involve more parachains for functioning of the network and also remove the non functional blockchains.
The live Polkadot price today is $18.04 USD and current CoinMarketCap ranking is #12, with a live market cap of $17,81,44,90,038 USD. It has a circulating supply of 98,75,79,315 DOT coins.
As for the exchanges are concerned, I'll be trading it from Binance. Other exchanges that I know, where DOT can be traded are OKX, CoinFLEX, BitCoke, CoinDCX, DigiFine, Wazirx etc.
Why are you optimistic about this token today, and how long do you think it can rise?
I am optimistic on DOT today because of the technical analysts that I performed. Moreover, the price action of the coin is forming a well established price action pattern that goes by rhe name of INVERSE Head and Shoulder Pattern . Although , I am yet to trade that pattern but I am trading levels within the pattern about which I am optimistic to proceed as expected. As for the whole pattern is concerned, I expect it to rise in a day or two.
How to analyze the token? (using the analysis knowledge learned from professors’ courses) —- important part
Being a price action trader, I rarely make use of indicators to perform trade and that too when I get some super set up with the help of indicators. As of now, I'll be carrying about multi time frame analysis of token to carry out the intraday trade today. I'll begin by analysing DOT/USDT on 4 hours time frame and then I'll switch down to lower time frames.
DOT/USDT on 4h timeframe
On 4 hr chart above, we can see that there is an overall downtrend but towards the last part of the chart , price reversal has occured as seen by multiple long bodied bullish candles. As we keenly analyse towards the end, the last two candles are red but lower price rejection is seen as long lower wicks which further signal dominance of bayers. Moreover, two important levels have been drawn at DOT price of 18.02 USDT and 26.34USDT. Nxw I'll switch to 1 hour timeframe.
DOT/USDT on 15min timeframe
On 1 hr chart of DOT/USDT above, we can see an "inverse Head and Shoulder* type of pattern. Although the pattern is not a typical bookish type of pattern but I think it can be materialized .
Please note that, in this section, I am not trading inverse Head and Shoulder pattern rather I am trading support and resistance levels within the pattern (encircled part) . So , at least for now, let's forget the above-mentioned pattern and focuss on to important levels.
DOT/USDT on 15min timeframe showing retesting of support level
Om 15 minutes chart above, I have marked important support and resistance levels. My support level is at DOT price of 17.44 USDT and resistance level is at 18.57 USDT. I tried to materialise these two levels. On the chart above , you can see that the support level has been retested as seen by multiple bullish candles formed .
I placed buy trade at DOT Price of 17.811 USDT and set my stop loss below the support level at DOT price of 17.34 USDT and TP at resistance level of 18.57 USDT. Let's see how it goes .
TP Hit
On the 15 minutes short above, you can see that my TP level has been hit and trade is closed and that's the beauty of price action trades. As mentioned earlier that an Inverse head and shoulder type of pattern is forming and I'll be trading that , if the resistance level is broken by some important candlestick pattern with a good volume to validate that level.
Binamce screenshot while trade was in progress
Transaction history- BUY
Transaction history -sell (exit)
Your plan to hold it for a long time or when to sell?
Since my trade has hit the level to which I anticipated it to be as per my analysis. So i don't have any plan to hold. But if the current target at which I exit the trade was broken with some good candlestick pattern, I may take buy swing trade.
Do you recommend everyone to buy? and the reasons for recommending/not recommending
For swing traders who wish to hold it long, I would recommend to buy it as the project has solid fundamentals and has performed very well during past. So it is available at discounted price owing to the dip that crypto is currently in. For short term swing or intraday traders, I would recommend to perform proper technical analysis and than take trade.
Conclusion
DOT is the native token of Polkadot blockchain that was founded by Gavin Wood in 2020.The versatility of the blockchain is linked to it's founder who has played great role in development of ETHEREUM blockchain. In addition there are many achievements on his name like research scientist at Microsoft and development of solidity in Ethereum. the practical use case and feature rich blockchain combination also added to its success.