Crypto Academy Week 10 - Homework Post for @stream4u

Hello all, week 10 of crypto academy. Here is my homework for @stream4u. Let’s get started.

Question 1. What Is Price Forecasting?

Let me give you an easy explanation. Just like people forecast weather and what does that mean? That means predicting the weather situation in the future. So just like weather forecast, price forecast is predicting the price of the assets. It helps people get ready and make up their mind for investments. It is very useful for investments whether it’s long term or short term.

Question 2. Discuss on why Price Forecasting is needed?

Just like weather forecast is very important. Let’s take an example. You’re a landlord and you want to grow something, you’ll need to know the future weather situation so just like that for trading and investing, you’ll need to know about pricing. If we know about the ups and downs of the price, we can make profits and if you’re GOOD at price forecasting, you can do multiple can do multiple trades in a specific market trend.

Question 3. What Methods are best you feel for Price Prediction/Forecasting?

Let’s start with how many methods are there for price forecasting.

1- Technical Analysis

Technical analysis is a way where technical indicators are given and people make investments based on those indicators. Now what are those indicators? Like in previous lectures, those indicators can be Support & Resistance, Moving average, Chart analysis, price action signals, trend changing indicators etc.

2- Fundamental Analysis

What is not important in this method? The simple answer is “The trends and the current market”. They do not matter to the investors. What matters to them is the management of the specific asset. On the basis of their previous assets’ performance,
how their new assets perform, and everything about the company and its management, they make the investment.
For example, if there is a well know company with a good history is introducing a new asset, there will be huge tradings for it but if it is the other way round, which is the company with a bad history and record when introduces a new asset there won’t be much investments.

3- Sentimental Analysis

In this method, news, social media, forums are the main source. People see the discussions and invest. People read the articles and they invest. And as a result, there is a huge volatility in the market.

Now let’s come to which one is the best method among all?

In my point of view, fundamental analysis is the best thing to do while trading. In that method you see the records and history. And if they are good, you make the investment. It’s not 100% that the assets will be a success but there’s more chance than there is in other methods. There is no assurance in other methods too so yes I believe this is the beat method.

Question 4. 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.

Source
In the given chart above, if you see the price of ETH was on continuous rise so if you make investments at that time, and in 2018 when you see a decline in the price, you sell it, you make a huge profit. From 2018 to 20 there were ups and downs ao if you patient enough and you can wait 2-3 years, you see from 2020-2021 it is on continuous rise and it’s still not declining so the patience is bringing some fruits now as you see but those who sold their assets missed the taste of the fruits.

Conclusion

To conclude this I will say price forecasting is very important in trading/investments in order to gain profits. Technical analysis and fundamental analysis are 2 less risky methods of price forecasting and mostly used by traders but sentimental analysis is a very risky method fue to huge volatility.

That’s all from my side. Thank you prof. @stream4u for a great lecture.