CRYPTO ACADEMY WEEK 10 - HOMEWORK POST FOR @stream4u || ALL ABOUT PRICE FORECASTING // DONE BY@phenomenal1052

What Is Price Forecasting?

Price Forecasting is the way in which crypto currency traders and crpyto analyst tries to find which movement trend the market is in and predict where the market will look like in future, whether the market will be bullish or bearish. With the use of price forecasting price of crypto assets are predicted. Price forecasting is all about using past value of assets that has been going on for days, week, month even years. There are situation whereby chart of many years ago are used to forecast the current and future price of crpyto currency.

Discuss on why Price Forecasting is needed?

• The importance of price forecasting is that it helps crypto currency traders in making less risky trade with well forecasted market. We all know that crypto currency trading is all about risks, but with the help of price forecasting, traders are able to go into trade with less risks involved. I like to call this "calculated risks".

• Another importance of price forecasting is that it helps traders in making maximum profit on every trade taken. When a trader takes a trade is aim is to make profit, but with the help of price forecasting a trader will know where to set his "Take profit" so that he won't go out of a trade when the trade is in its prime.

• Another importance is that it helps to manage and minimize a trader loss when a trade goes wrong. We all know that nobody is perfect, and no trade is perfect. During trading, a trader might take a bad trade which might result in the trader losing his money, but with the help of price forecasting, the trader will be able to know when to come out of the trade or set his "sell loss" in order to minimize loss.

What Methods are best you feel for Price
Prediction/Forecasting.

Using three different method we can do price forecasting.

Technical analysis.

Technical analysis forecasting predicts future financial price movement based on studying past price movement. Technical analysis method to me is the most used method of price forecasting because it's straight forward, a trader can easily take a calculated risks trade by just looking at the past market trends, and applying the different techniques in technical analysis like surpport and Resistance, Price channel (trend line Identification), Elliot wave theory, e.t.c. in determining what trend the market will make in the future, and helping him or her to know what trade to take.

Fundamental Analysis.

In this methоd оf аnаlysis, the investоr dоes nоt lооk аt the charts or market movement. The investor would take a look at the management and the structure of the company and how effective they are and in the next future. This is what the trader looks at in taking his or her trade decision.
I will like to cite an example, "of a situation where the founder of a coin owns 95% of the market supply, if he sold just 5%, the market will crash by 84%, imagine if he sells everything the market will surely fall to 0". In this kind of situation a trader knowing this will surely take a sell trade whenever the owner sells anymore portion.
So in simple word, the trader evаluаtes the mаrket thrоugh vаriоus fасtоrs thаt саn аffeсt the vаlue оf аn аsset.

Sentimental Analysis.

In this methоd оf аnаlysis, a crypto currency trader is able to predict the movement of the market based on social media news and oppinion of investor on social media platforms, trаder аre аble tо deteсt subtle shifts in рriсe аnd аdарt reаdily tо meet the сhаnging needs оf their аssets.
I will like to cite an example, "earlier this year, Elon musk made a tweet that Tesla will be accepting Bitcoin as a form of payment and will be making use of Bitcoin in their financial activities". This positive decision made a huge impact on the market that the market made positive trend up. A trader who sees that tweet will surely know that the market will surely move up. So that how sentiment analysis work.

My opinion to choose the best analysis method.

All the three method has their own advantages and disadvantages.
To me I prefer to use the technical analysis because it's easy to learn, and their are different options to use in accessing the market, and to make a less risky trade. Not everyone has Access to some crucial information that affect the market, so using the technical analysis makes trading easy and accessible to every trader either big capital or small capital trader.

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.

I wil be explaining how to go about price forecasting practically based on technical analysis.
Like I already said earlier technical analysis is done by predicting the future price based on multiple chart patterns and market movement.
So here I will be using the current BTC/USDT market chart to explain surpport and Resistance plus I will drop my prediction of the price of the market in the next one week and month.

Looking at the chart above, you can see a well drawn surpport and Resistance level there.
Note: when drawing your surpport and Resistance make sure you draw it in a small rectangular shape like the one above instead of the straight line, because the rectangular shaped one is more accurate. As you can see the market level is not straight, so when you use a straight line surpport and Resistance level, you might not get an accurate level and that might be confusing, so using the rectangular shaped one gives you a more accurate level.
As we already know the upper level is the resistance while the lower level is the surpport. Do taking a look that that market up there, we can see that the market resistance level before changed to surpport where In that place where I circled it, after breaking the market moved on to form a new resistance and it came back to our surpport back to our resistance, where it moved around for a while before finally heading back to our surpport. That is why there is a decrease in the value of Bitcoin over the week. But one thing I know is that the price is still heading back to our resistance after touching our surpport and it might finally break through and form a new surpport and Resistance.

MY PREDICTION

Looking at my explanation from the graph making a less risky and calculated risks trade, I can tell you that the price of Bitcoin will still fall down to $44,187 because that is where our support is.
But by the end of May the price of Bitcoin will move back up to our resistance and my prediction is $58,312 to $60,000 because that is where our resistance is. In addition I think the price will break through to form a new surpport after completing our resistance.

Source/https://www.independent.co.uk/topic/bitcoin/

This is all from my side thank you for reading, I hope you learned something and good luck in trading.

Cc @stream4u