K Steemit Crypto Academy Homework Task Week 10 Post For @stream4u

Hello Everyone,

I am able to go through the lecture. It is soo informative and educational. I try my best to go through all the notes. Thank you @stream4u for this class.

1. What is price forecasting?

Price forecasting is the ability to analyse to predict an asset future. This analysis could be statistics, pattern, trends and demands. Price forecasting can be done for a short term or geared towards a longer term.

2. Discuss on why price forecasting is needed.

Price forecasting is an important tool in trading cryptocurrency. The rise ans fall of the market is almost impossible to predict. It helps a trader determine the pattern of a token and how it rises and falls. i will explain why price forecasting is needed.

Price forecasting gives the the trader the ability to make good decisions to predict the future value of the stock market. The entry and exit of a trade is what determines your ability make profit or run at a loss. A successful prediction by a trader could yield huge profit. Its for this reason every trader needs to make a proper price forecast before involving into a trade.

3. What method are best you feel for price predictions/forecasting?

There are three methods that involves in price forecasting. This methods include the Technical analysis, fundamental analysis and sentimental analysis. Lets get to explain each method to understand before we can determine which is best.

Technical Analysis: This method is base on statistics and technical indicators like past price, charts, market trends, price patterns and more. A trader can determine the future of a price with the help of tools like the resistance and support in a chart. This is one of the most common method used in recent times, very dependable.

Fundamental Analysis: This has to do with the company and its management team, how trustworthy they can be to manage its token. If the company operates and manage its stock markets well, it gets it rewards by adding value to it stock market. People invest only if they see a good result and a promising future of a token.

Sentimental Analysis: This method has to do with the use of media, news discussions around the world about the stock market. This discussions can be positive, negative or neutral, each of these can cause the rise and fall of a token being talked about. A example is when Elon musk tweeted about the Dogecoin. we realise got more attention, few days later the value of the coins start to rise.

To be a good trader, you should consider all these methods. Some are good for a shorter term investment while others are good for a longer term investment. Technical method is good for a short term investment, it can be used to predict what will happen in the next hours or days. Fundamental and Sentimental Analysis is good to be used in a longer term investment. Although sentimental method can also be used for shorter investment of days.

4. Take any crypto asset chart graph and explain how to do prise forecasting.

I’m analyzing Ethereum chart graph to predict how the prise will change with time. This is the chart of Ethereum above. The price has rise and the question is will it fall back or breakthrough the resistance?

I have draw three resistance level at which the value might break through to rise or fall back down. Now let’s try to analyze if the price will rise or fall within an hour.

We can see in the graph the price rises in higher lows breaking into resistance, this shows a sign of weakness in RESISTANCE 1. There is a possibility of the price breaking the RESISTANCE 1 to a higher price without falling back.

Stock market also has a long term memory so there is a probability of the price falling back to RESISTANCE 3. There is also a high probability the value will drop back to RESISTANCE 2 again. Now here comes the decisive and risky choice we have to make. I personally believe the price will hit RESISTANCE 1 and fall back to RESISTANCE 2 and up again.

I say this because most traders will like to buy low and sell high. Most short term investors will sell because the price has hit RESISTANCE 1 with the believe it will fall preparing to buy again when it hits RESISTANT 2.

CONCLUSION

Price forecasting is an important tool to use to determine the rise and fall of the market. Every trader has the type of method that works for them. Some method are good for long term investment while others are good for short term investment. The best method that suit you depend on the type of trade you want to invest it, either long or short term.

Thank you very much @stream4u for this wonderful lecture. Really will be helpful in my trading journey.

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