Welcome to Steemit Crypto Academy Season 2, we are in now the 10th Week of Steemit Crypto Academy.
My self @stream4u, I am from India and one of your crypto professors, welcome you all to my class.
Hope that the last all lecture was useful for you and especially the Assets capital course by looking at the current performance of BTT, Dogecoin from the last couple of weeks.
In this course, we will learn How To Perform Price Forecasting & Trade/Invest Based On It?
NOTE: Comment your homework task link only if it is not reviewed in 24 hours after you published it.
Let's begin our class.
We have learned Support, Resistance, Price breakout at Support and Resistance, also seen how they act in a real-time market.
Price goes up from Support and down from Resistance and this is normal behavior or we can say it a nature of the market that price goes up and down.
Now here to balance our capital and increase it by slowly, performing price forecasting is a must require before entering to any trade.
Technically you will find there is a lot of maths formulas use to forecast the price, but we will go in an easy way based on Technical analysis.
Price Forecast means simply you are predicting the future price of assets.
Price Forecast also helps in short investment and long-term investment.
For the short term and long term, so we already learned chart patterns in different time frames.
Price analysis is a method used by cryptocurrency traders and analysts like you and me are trying to find the market trend pattern.
Price Forecasting can be done in three types of analysis are Technical, Fundamental, and Sentimental. Traders as per their expertise and skill level they do price future analysis based on these three types of analysis.
Technical Analysis: We have learned in previous lectures how technical analysis can help in trading and investment, how to identify the market trend, price movement, chart pattern, bearish-bullish trend, market support, considering these all points a Technical analyst predict assets price.
Fundamental Analysis: Here traders do not look at the current market price and where the trend is going, instead of this they closely look at the company and their management team, what they are doing, how they perform, implementing new products, and their market supply, weekly-monthly balance sheet, Company Profit-Loss-Depth(Borrow) ratio. When they find that the Company is performing well in all these, they invest in a company and do not look at the current market trend.
Sentimental Analysis: Volatility in the market is possible to earn money and loss money too, but if you predict well then the trader can make good enough profit in a short time. In Sentimental Analysis the market nature could be negative, positive, or neutral. Traders in this mostly look in the forums, media, news, discussions which create a panic situation and result in high volatility in the market.
In this, we will see how we can do price forecasting based on Technical analysis.
Here we predict the price based on multiple chart patterns, trend indicators, and price movement.
Looking at the chart and combination of all chart patterns, trend indicators, and price movement, we can able to predict the price movement. Nort only for upside but we also need to predict the price at the downside.
In Price Forcast, the Investor mainly looks long duration trend like monthly, yearly. To explain this, I will give a simple example below to predict Price movement.
This is Ethereum Chart from 2019, suppose I am checking the graph after 2019 and before 2020 if we talk about yearly, then what we see, after 2019 the price was pumped, but there is resistance which was previously supported, and now price going down, now I will enter if price come to 2019 level or after resistance breakout if I do this let's see what are possibilities to happen next.
Look at the price and how patience works. Here I was waiting since last year if I am in 2020, so I can enter here at this level. Now Price forecasting says that the price will go 124 to 360 if we look in 2019. Now Next.
Here we can see our 360 targets achieved, Price forecasting based on Support and resistance worked even I don't know what happening in Fundamental and Sentimental.
Now the question is, should I sell and come out OR hold more. To answer this I drawn 2 circles, you will see how much time it takes to go up(left circle) and how within a short time it is down(right circle).
Now we are at the resistance level and as we know the definition of resistance says the price will go down from here, but what about price breakout?
Sell OR Hold?
Ideally and with respect to chart pattern my answer will be Sell, Why?
Reason 1: Because I hold this for a year if the price gets down back to the 2019 level so I will get a chance again to buy.
Reason 2: If I hold and the price goes down again to the 2019 level, my holding efforts gone, and don't know if it goes more down from there. To achieve again 360 level I will have to wait more years.
Let's suppose we sell at 360 level for the safe side, now let us see what happens next.
Oops.... the Price goes more up but I already sell everything, now what?
Now here breakout trade will work and if you look at the 2019 level so it was around 100 wherein the actual target was 360 as per resistance level, now at breakout we see price is around 450, here we can reenter and the difference is just of price 100, we are re-buying at quite more up but instead of holding and if the price goes back to 2019 level then we are loosing 260 and also holding efforts.
If I did not sell at 360 level and if the price goes down again, then we really don't know if we will actually hold more years to achieve 360 or else will sell somewhere in the middle due to any urgency, but we will always think that I missed my Target.
While re-entering into the market at break out maybe we will not get that much quantity that has earlier, still whatever quantity you will get at breakout that is enough and it will give more in future. This is Smart Trading.
While investing and Trading we should be clear with our entry and exit point. Investing and Trading does not like just put the money and wait till it shows a huge profit.
As mentioned above when we know that price can move up from a specific point and possible to come down from a specific point, instead of waiting we could do multiple trades in one trend, like a buy at the bottom and sell at resistance then wait till price come down at support and buy again, by following this we can increase our capital slowly.
Multiple trades can be possible in a multiple time frame chart, but to get a clear view and low volatility, I will recommend setting the chart at a 30 or 45 minute time frame.
So instead of one trade and increasing holding duration if we do price forecasting well so we can do multiple trades in a specific market trend.
Make a Homework Task Post on the below Topics which you can also discuss according to your views on it, and try to explore it as much as possible but in simple terms.
NOTE: Information, Examples are should be related to the Crypto Market.
- What Is Price Forecasting?
- Discuss on why Price Forecasting is needed?
- What Methods are best you feel for Price Prediction/Forecasting.
- Take any Crypto Asset Chart graph and explain how to do Price Forecasting? OR Take any Crypto Assets Chart graph & as per its current price tell us what will be its future price for next 1 week or 1 month? You can predict for any direction up or down but explain it properly on what basis you have predicted the price.
For any concerns, doubts, questions on homework task, you can ask me in the comment section below.
IMPORTANT- All homework posts should be posted in the community Steemit Crypto Academy .
PLAGIARISM Will Not Accepted, hence make sure content in the post not copied and pasted from certain sources.
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Post Require a minimum of 300 words. Tips On a minimum of 300 words!
Submit Homework Task between 19th April To 25th April 2021.
Only when your Homework task does not get reviewed within 24 hours after you published it, please send your post link under the comments on this post.
Given Grades and Reviews are based on the submitted Task which will not change after review.