Steemit Crypto Academy | Season 3: Week 5 || Death cross & Golden cross, How to use Binance P2P trade by @eloksjoseph

eloksjoseph (63)Beginner[2,4,5]in SteemitCryptoAcademy • 3 years ago

INTRODUCTION

Welcome to a new week of steemit crypto academy . It is week 5 of season 3!!! This week professor @yousafharoonkhan gave a lecture the golden cross and the death cross . He also talked about the P2P platform which involves paying fiat currency for crypto on an exchange. This post is an assignment post based on his lecture.

Question no 1:
Define Death Cross and Golden Cross in your own words. And what is the significance of DC and GC in trade? And what effect do these two have on the market?(in your own words.)
Question no 2:
Explain the points given below;
How many days moving average is taken to see Death cross and Golden cross in market for better result and why?
How to see death cross and golden cross on the chart.
Explain Death cross and Golden cross on the chart, (screenshot necessary)
Question no 3:
What is Binance P2P and how to use it ?
How to transfer cryptocurrency to p2p wallet?
How to sell cryptocurrency in local currency via p2p (any country or coin)(screen shot neccessary to verify account)
Question no 4:What are the things to keep in mind during P2P trade and descrbe its four advantages and disadvantages.(own words)

QUESTION 1;

THE CONCEPT OF DEATH CROSS AND GOLDEN CROSS

In the crypto trading ecosystem, we often hear the word "indicators". Every trader at one point must have heard and even turned to the use of indicators. To fully understand the golden cross and the death cross, we must first understand the Moving Average (MA) indicator. The moving average indicator is a technical indicator that is made by adding points in a period and then dividing the total sum by the number of periods. For example, a 50 day moving average is the sum of closing prices for the last 50 days then divide the total sum by 50. The moving average indicator is already automatically calculated by most trading exchanges so it doesn't need to be done manually.

The golden cross and the death cross is often gotten from the combination of 2 moving averages. The first MA is for short term (10,20,50,etc ) and then the other is for a long term (100,150,200,etc). The golden cross is gotten when the Short term moving average moves up and crosses through the long term moving average. On the other hand , the death cross is gotten when the long term moving average cuts through the short term moving Average. Below are some chart examples:

The death cross and the golden cross are very important indicators. They are very significant to every trader as they often give a signal of an incoming long rally. If we check the BTC/ USDT chart, you'll notice a golden cross ,and a couple candlesticks after, a long bull trend ensues. From this we can take it that when a golden cross appears on a chart, it signifies and incoming bull run. On the other hand, the death cross signifies an incoming bearish trend.

From the chart examples above, you can notice where I marked out the golden cross and the death cross. You'll see after the death cross , there was a bearish run and after the golden cross, there was a bullish trend starting. From this , we can easily pick out the effect of the golden cross and the death cross.

When we see a death cross, there is bound to be a downtrend And when we see a golden cross, there's bound to be an uptrend.

QUESTION 2

To see the golden cross and the death cross, we need two moving averages. One must be long term and the other short term. To get proper and more accurate crosses, it is important to pick out the right length for the moving averages. While some opt for a 20 and 100 length, some may decide to pick the 30 and 120 combination, the 50 and 200 MA combination with the 50 period as the short term and the 200 period as the long term is often considered the best.

This is the best and mostly used by traders as it has proved the most effective and the setting is near perfect for picking out crosses. The 50 period which serves as the short time is the average of the closing prices of the last 50 days. This seem a bit long when you first think about it but it gives clearer signals as it is an overage over a moderately long period of time but then it is considered as the short term MA as it is combined with the 200 average. The fact that the average of the short term isn't that short shows that the trend incoming would be a strong one. Therefore, picking a 50 day moving average as the short term average would give show to a very strong trend that might not just go off after a couple candlesticks.

Most people often ask what timeframes are most effective for using the golden cross and the death cross, but depending on the type of trader you are (scalper or swinger), that would determine the time frame. A scalp trader could use 5 min ,15 min, etc while swing traders could use 1day ,3 days etc. Although , one thing to note is that the crosses would first appear on smaller time frames before they do on longer time frames. They are both effective as the crosses work in any time frame. The most important setting for the crosses is getting the right moving average combination which we now know is the 50 and 200 combination.

HOW TO SEE THE DEATH CROSS AND GOLDEN CROSS ON THE CHART.

To see the death cross and golden cross on a chart, we need to add 2 moving averages. Most trading exchanges have their default settings,but I'll be showing you how to set it to your preference . I'll be using the binance mobile app for this section. It can be done in a few easy steps;

First you'll open a chart and you'll see the MA indicator (1). Click on it and you'll see the default settings of the exchange. But in this section we'll be setting ours to the 50 and 200 combination.
In the top right corner of the chart, you'll see something like a switch (2) . Click on it and youl see a tab which contain "indicators" (3).

Click on the "indicators" and you'll see several indicators that the exchange has built in. Select MA(4)
After clicking in MA ,you'll be shown the configuration page where you can pick the number of moving averages you want (5). Here we'll be using just 2.
Then we can now set it to 50 and 200 (6). We also have the option to choose the boldness of the graph (7) and the colour (8).
After picking out preferred settings, we can now confirm and you'll see it added to the graph(9).

Using the 1hr time frame, we can now see the 2 moving averages that would eventually form the death cross or golden cross.

Now let's look at the effects of each cross in a chart;

DEATH CROSS:

Looking at the charts below, we can see a death cross in both of them but they seem to have something in common. This common occurrence often happens after every death cross . Once you see a death cross on chart, there's an incoming downtrend and this has been seen from both charts below.

GOLDEN CROSS:

The golden cross is what most traders like to see. In both charts below, when the golden cross appears, it is often followed by an uptrend. Therefore, the effect of a golden cross is a resulting uptrend.

QUESTION 3:

BINANCE P2P

The acronym P2P means peer to peer. This implies that there's a transaction ongoing between persons. The binance P2P center gives traders who can directly deposit fiat into their wallets the opportunity to buy major cryptocurrencies directly or buy stable coins with the use of currency(not digital).

In my country Nigeria, it is banned to buy cryptocurrencies directly with the Central Banks currency. The P2P center serves as a escape to that ban as I can easily buy cryptocurrencies off another person and then pay with money.

Now let's take a look on how to transfer Crypto to your P2P wallet and how to sell using P2P. It can be done in some easy steps;

To transfer to your P2P wallet, you can either buy or transfer from your spot.
To transfer from spot, go to wallet ,click on spot, and you'll see the transfer option (2).
For this section, I'll be selling Bitcoin using P2P (1). Click on transfer and you'll be directed to a new page where you can transfer your crypto.
On this new page, you can pick the currency you want to transfer (3) and then pick the amount (4).

After transferring , your crypto would be sent to your P2P wallet and you can directly access the P2P center after transferring. (5)
In the P2P center you can either buy (6) or sell (8)a crypto currency of your choice(7).

On the top right corner , you'll see options like history of past transactions (9) , change currency to your local currency (10), check the P2P help center, P2P user center,change to advertisement mode ,etc(11), also filter ads to your preference(12).

In the filter tab,you can choose the least amount (13) , the mode of payment (14) and then confirm (15). After confirmation, you'll see changes in the ads.

You can now pick an ad that favors you and enter it. After you enter a trade, you can set the amount of crypto you want to sell (16) and the payment method (17). Then sell (18).
After clicking sell, you'll see the maximum time the buyer can take to pay(19) and you can chat with the buyer too (20).

In the place where you chat with your buyer, you'll see a risk notice message (21). Meanwhile, you wait to be paid.

After the buyer marks the transaction as paid, you'll receive a message and then you can confirm it from your fiat account balance. If you have confirmed payment, you can now confirm payment on the app(22).

Before the system confirms payment, you'll be asked to confirm you've been paid before releasing.
If you have confirmed payment, you can click on confirm (23) and then you've made a successful transaction.

It is always nice to give a positive review on a successful transaction. And after leaving you'll see the transaction summary . It looks like the image below.

* * *

It should be noted that binance serves as an escrow between buyer and seller. An escrow is an intermediate between the buyer and seller who holds the coin or crypto to be traded until the trade is going on. That is, once you want to sell, the crypto would leave your wallet and be held by the escrow who would now release it to the buyer after the transaction has been completed.

QUESTION 4:

THINGS TO KEEP IN MIND WHEN DOING P2P TRADE

There important things to note when doing a P2P trade which include;

Patience is key as some buyers might take a while to transfer your money.
Beware of fraudsters as they often fill their ads with extremely high rates to attract people.
Don't post ads when you're offline , it inconveniences others.
Never accept third party payment.

Now let's look at some advantages and disadvantages:

ADVANTAGES	DISADVANTAGES
1. It is a global marketplace as you get to meet a wide range of crypto currency buyers and sellers.	1. Trading can go on for a while and it is often considered slow.
2. Wide range of payment methods.	2. There's always the issue of fraud.
3. There's an escrow which provides security.	3. There are little or no regulations as trades are managed by peers.
4. There are no trading fees	4. There is no insurance if you lose funds in a trade.