Hello everybody.
Welcome to this post. I hope that all of you will be fine and good. I pray for Allah Almighty to keep all of us healthy and wise. Today, I am going to make the Trading Post in the Crypto Academy Trading CompetitionWeek 02. It is actually a golden chance for all of the students to execute the knowledge we have gained from the academy so far. So, let's start the task without any wastage of time.
This is my 2nd trade this week and I am going to open a Short Future Trade in the LUNA/USDT pair. Let's discuss the reason for selecting this pair and the trade in detail.
Coin and Exchange Name
Today, I am going to execute a Short/Sell Trade in the Future Trading on Binance. I have selected the LUNA/USDT pair for this trade. I will try my best to make a good and profitable technical analysis of the chart and also to execute a profitable Future Trade.
According to my views, Terra (LUNA) is one of the best and strongest coins of the time. It is of equal importance in both, short-term and long-term trading strategies. It is also one of the most favorite coins in my trading book. In past, I have executed many trades in the LUNA/USDT pair and secured good profits every time. It is also listed in the top 10 cryptocurrencies of the present time. The Market Capitalization, as well as, the worth of the coin is also very impressive.
I have selected the Binance exchange because I personally like it very much. It is quite simple to use and also it is a very safe and secure exchange for trading cryptocurrencies. I have also used a number of other exchanges like Poloniex, Huobi Global, etc. But I liked the features of the Binance exchange very much and I am familiar with most of the features of the Binance exchange.
Binance Exchange is the most popular centralized exchange of the time. Its popularity is due to its number of unique and useful features. It allows the users to trade almost all of the good crypto pairs. The P2P trading and the Margin trading of this exchange are also impressive. It allows the users to set the leverage of the futures trades up to 125X which is really impressive. There are also many other unique features of this exchange that made this exchange listed on top in my book of trading.
Fundamental Analysis of Terra (LUNA)
- Introduction and History:
LUNA is actually the native currency of the Terra Blockchain. LUNA is one of the most successful and most famous coins at this time. There are actually two different cryptocurrencies of the Terra blockchain that are Terra Stablecoins and LUNA. LUNA is used as the governance token on the chin ad also used for mining purposes in the blockchain.
Terra Blockchain is actually an Open-Source blockchain protocol that is used as the payment platform for algorithmic stablecoins. The stable coins are actually those cryptocurrency assets whose value is pegged to the real-world assets. In the Terra blockchain, stable coins are created, as well as, these stable coins are used for various payment purposes.
Terra blockchain was developed by Sir. Do Kwon and Sir. Daniel Shin in 2018. Both of these personalities are very successful in the world's finance and technology space. CEO Kwon was also offered by Microsoft and Apple like popular and successful brands. Thanks to them for developing such an amazing and useful platform where the users can develop stable coins and use these stable coins to avoid the volatility crushes of the cryptocurrency markets.
LUNA is actually the native currency of the Terra blockchain that can be used as the governance token and also can be used for mining purposes. The stable coins that are developed by the Terra blockchain are stable because of the LUNA coin only. The reason is that the LUNA coin is used to maintain the supply and demand of the Terra Stable Coins.
Thus, we can conclude that Terra is one of the most popular and the most successful Decentralized Finance Systems at this time. It allows the users to use the Terra stable coins for payment purposes and these stable coins are actually pegged to the value of the real-world assets like US Dollar, Euro, etc.
- CoinMarketCap of Terra (LUNA):
On exploring the CoinMarketCap of the LUNA coin, I have got a number of useful information about the Terra (LUNA) coin. So, have a look at the following screenshot in this regard.
The information that is obtained from the above screenshot can also be expressed in the form of tabular data that is given below.
| Coin Name | Terra (LUNA) |
|---|---|
| Nick Name | LUNA |
| Rank | 07 |
| Current Price | $87.03 |
| Market Cap | $32,686,233,124 |
| Fully Diluted Market Cap | $69,626,013,512 |
| Market Volume | $5,392,574,047 |
| Volume / Market Cap | 0.1668 |
| Circulating Supply | 375,565,689.58 LUNA |
| Total Supply | 788,858,163 |
- Historical Price Data:
From the above screenshot, we can observe that the All-time High price of LUNA is $103.33 (27, December 2021) and the All-Time Low price of LUNA is $0.1201 (13, March 2020).
- Available Markets:
From the above discussion, you can observe that LUNA is one of the most popular coins of the time so it is available in almost all the popular crypto exchanges. Some of them are listed below.
Technical Analysis of LUNA/USDT pair
Due to the volatile nature of the cryptocurrency markets, it is always advisable to analyze the market in the proper manner before opening any trade in the market. There are actually three different types of analysis. Fundamental Analysis deals with the prediction of the upcoming prices by the information of current events. Sentimental Analysis deals with future market predictions by studying the psychology of traders. Technical Analysis deals with the prediction of upcoming prices by the signals given by different technical analysis tools like price charts, indicators, price movements, etc.
I would like to do the technical analysis of the LUNA/USDT chart by using three different technical indicators that are RSI, Moving Averages (MA), and Parabolic SAR. The working of each indicator is discussed below.
- Relative Strength Index (RSI):
RSI is a technical indicator that is used to determine the Oversold and Overbought positions in the market. There are actually 1 t0 100 ranges of RSI indicator. When the RSI line is below the 30 range, it is an Oversold condition and when the RSI line is above the 70 range, it can be considered as an Overbought region. The price tends to move upward after the Oversold and tends to move downward after the Overbought region.
- Moving Average (MA):
MA is also another important indicator that I have used in my analysis. It actually consists of a line that gives the signals of trend reversals. When the MA line is below the price action, it is a Bullish signal, and when the MA line is above the price action, is a Bearish signal. I used the MA line with 90 lengths. Users can modify the length according to their trading strategy and style.
- Parabolic SAR:
Parabolic SAR is also one of the most simple technical indicators. It actually consists of a line that is composed of Dots. When dotted line above the price action, it can be considered as a Bearish signal. And, when the dots are below the price action, it can be considered as a Bullish signal.
Now, I have applied all these indicators to the LUNA/USDT chart. The resultant chart that I gained after applying the indicators can be seen in the below screenshot.
As we can see in the above screenshot I have applied all the above-discussed indicators on the chart.
First of all, I opened the chart of LUNA/USDT and set the timeframe to 5 minutes. Then, I drew the Support and Resistance levels on the chart, as you can see in the above screenshot. I applied the RSI, MA, and SAR indicators on the chart and observed that a Bearish trend is coming soon. As:
The dotted line of the Parabolic SAR indicator is moving above the price action that is an indicator of a Bearish trend. A bearish trend is to be expected soon by the signal given by Parabolic SAR.
Also, the line of the MA indicator just made a breakout and started moving above the price action which is also a signal of a bearish trend.
And, the line of the RSI indicator had just made an Overbought region, and then it was just moving downward and near the mid-line. This is also an indication of the Bearish trend.
From the signals that are given by these indicators, it is confirmed that the price is going to enter a bearish trend and I decided to take advantage of this downward movement of the price. I opened the Future Trading on Binance and executed a Short Future Trade in the market.
As we all know that the market of cryptocurrency is so volatile that we cannot rely on predictions or indications. So, it is always a better trading style to adjust the risk level while entering the market. So, I just set the Stop Loss level just equal to the previous resistance line, and the Take Profit level is set just equal to the previous support line.
The situation of the market attracted me to take advantage of the down-movement of the market. So, I opened a Short Future position on the Binance exchange with a leverage of 20X. I took entry for this Short trade at 90.9050. The proof of the trade that I have executed is shown in the below screenshot that is taken from the Trade History of my Binance account.
I waited for a while and then the market started moving in the downward direction. I was securing a good profit so I closed my position in the market with e profit of $3.60. The screenshot is below.
My Plans For Keeping or Selling it and Recommendations for others
As you can see from the trading portion, the Short Future trade that I have executed in the market of the LUNA/USDT pair was a short-term trade. I entered the market just to take advantage of the downside movement of the price. So, I opened a Short position and closed my position when I found that I was securing a reasonable profit.
So, it can be seen that I did not keep my position open for a long time. I closed my position as soon as the price touched my reasonable profit level. Traders can also use this pair for long-term trading strategies. But I am not a trader or such level. I, being a scalp trader, will try my best to take advantage of the market movements of different pairs.
- Recommendations for Others:
As a matter of recommendation for people, I want to recommend other traders also to enter the market by opening a Short position at the time of making this analysis. From the technical analysis that I have done in the above section, I was very much sure that the price will go down and the movement of price proved my sentence.
So, I also recommend other people to open the Short Future Trade in this pair, hold it for a short period of time, and then find a reasonable opportunity to close the position. It could also be a good long-term investment as LUNA is one of the strongest coins so far. But I cannot afford long-term investment so I am going with scalping.
These are only my recommendations but I am not an investment advisor. The people must have to manage their risk before entering the market because the market of cryptocurrencies is so volatile that we cannot predict the future price exactly. Risk management is very important in every trade and we must set the Stop-Loss and Take Profit levels according to the analysis tools.
Additional Information about Terra (LUNA)
We can also find the social media accounts of Terra (LUNA). We can get the latest and most important information and news from these social media accounts.
- Twitter:
- Reddit:
- YouTube:
Discord: https://discord.gg/EuKCeGFb93
Telegram: https://t.me/TerraLunaChat
We can follow and visit all these social media accounts on daily basis to get updated about any new updates about the Terra blockchain or LUNA coin.
- White Paper: https://docs.terra.money/
Conclusions
In this post, I have made a Short Future Trade by doing the technical analysis of the LUNA/USDT chart. I used three different technical analysis tools that are Relative Strength Index (RSI), Moving Averages (MA), and Parabolic SAR. By analyzing the market, I opened a Short Future Trade and set the Take Profit and Stop Loss points. After some time, I got a profit of $3.60 so I closed my position.
Thanks to dear professors @abdu.navi03 and @shemul21 for such an amazing opportunity by leading an amazing team.
Writer: @steemdoctor1 (Crypto Student)
