Am delighted to participate in the homework for @stream4u season 2 week 2, all about price forecasting.

Price forecasting and why it's needed

Price forecasting is an act of estimating the future value of an asset, when we talk about price in simple words, means the actual value of a particular product, either goods or assets, while forecasting is a prediction of event or trend..

In the crypto world, price forecasting also can be put as the future prediction of a particular crypto asset to determine the uptrend or downtrend of a particular crypto asset through various analysis known buy analyst like me to make a decision of buying or selling.

With out forecasting a particular crypto asset, it is almost impossible to make profit when trading, price forecasting is an important role to play for traders because one does not know the direction of the crypto asset(either it's going up or down), the forecasting will direct you from making a loss and it gives traders the chance of making good profit.

As the professor has said, price forecasting can be analysed in three methods, which are technical, fundamental and sentimental analysis..

• Technical analysis:
  This method is used in price forecasting of an asset by analysing the market with the help of technical indicators, these indicators can be a chart pattern using the support and resistance to know the entry and exist position of an asset, price movement of the asset, Current Price of the asset and more factor..use anyone suitable for you as there are many more technical analysis, so far the purpose is to forecast the price and make profit..

• Fundamental analysis:
  Users in this method don't look in to the chart pattern or past and present price as they look deeper into company's plans for the crypto asset, the asset team work, their financials asin the ratio of their profit loss and debt. Traders that falls on this analysis also checks the aims of the project, how the project it working, is it tallying with the current performance of the asset, the market supply, when all this is evaluated on the good side they proceed to invest in the company.

• Sentimental analysis:
  In this method of price forecast trader are subject to high profit if their prediction go well and a high loss if it's goes otherwise because traders analyse the market base on news, media and meetings in forums

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.

All methods are good because every analysis has its own functions and people that uses them, I think every trader can't be on one analysis as we will see some practicing the fundamental and sentimental analysis, most of us know that the technical analysis is more commonly practiced.

The best preferred method by me is the technical analysis simply because am used to it and it is commonly used by traders. The technic used in this analysis are easy as there are various indicators that can help in this method..

graph of btcusd

This is a daily chart of BTCUSD and here the market has been in an uptrend from the beginning of this year in which we have HH and HL.

( forex trading app meta trader4)

It has been supporting support and resistance level not on till the last few candles which shows that there is reversal signals its telling us that for the next one week BTCUSD is still going to fall down before retracing upward..

Support shows the time to buy
While resistance is the best time to sell
When a graph has a double bottom that's is the support of the market its now left to you to decide if the support is the strong one or the week one. The weak one will break and still falls down while the strong one will only have the uptrend. Resistance in the other case also have both strong and weak resistance when the market has the double top mostly green from the first to the new one trend making the resistance. Both are mostly having green tops while support is always the double base red candle sticks.

In conclusion price forecasting of an asset Is very important to every trader regardless of the method you use, because the goal is to make profit.

Cc: @stream4u

Written by: @olabillions