Coin Zone Trends: Bitcoin Price Trends Based on Big Data This Week (2016-06-8)

How to do risk control and position control

1. Market trend <br/>The current Bitcoin price is 3830 yuan. It took 4 hours to drop from 3900 to 3760 last night. It rebounded for 8 hours this morning and is already above 3800, recovering 50% of the decline. The daily K-line still has the risk of a downward correction, but the recent buying is relatively strong. The short-term trend is difficult to judge. The safer approach is to wait for a break before operating. Support levels are 3800 and 3770, and resistance levels are 3850 and 3880.
In yesterday's analysis, we asked those who went long at 3550 to reduce their positions to protect their profits. We reminded everyone to reduce their long positions because the daily line has been up for six consecutive days, and there is a trend of turning down at any time to form a double top, so the risk of going long is relatively high. Risk control means that you can't only see the profit but not the risk. You must not open a much larger position than usual or increase the leverage multiple because of a momentary excitement or a sudden expansion of confidence. If risk control is not done well, profits will turn into losses in a minute.
A few days ago, we had an analysis that mentioned "opening a short position must be at least above 3900". As a result, when it approached 3900, the price of the currency fell. If you are bearish and want to open a short position, you should gradually build up a short position, rather than opening a full short position at 3900. Position control means gradually building positions in batches and time periods, and gradually closing positions in batches to protect profits. Don't open a full position at any time.
2. Newcomer Index to see the amount of funds entering the market <br/>The chart shows the newcomer index every day. On Monday and Tuesday, the newcomer index was normal. Last week, there was a sudden increase in newcomers entering the market, which did bring a lot of funds to the market and directly led to an increase in the price of the currency.
3. Sentiment Index: Market Reaction to Prices

The chart shows the sentiment index calculated on a daily basis. As can be seen from the chart, the sudden drop last night caused a relatively large reaction in the market. If we compare it with the hourly long and short index, we can find that the sentiment of bottom-fishing after the drop is relatively strong. We believe that those who are long in the medium term can gradually establish positions in batches.