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Trading Recommendation – Zcash/Bitcoin

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The best way to profit on the bullish side is to buy in an uptrend or buy when the trend changes from down to up. A reversal pattern at the lows allows us to enter into a new developing uptrend at a low-risk. If the trend sustains, we can ride it up. One such bullish reversal setup is the inverse head and shoulders (H&S) pattern. We find this pattern on the Zcash/Bitcoin pair; hence, we want to buy it.

Key Observations

  1. Zcash/Bitcoin is forming an inverse head and shoulders pattern at the lows.
  2. We believe the cryptocurrency pair will start a new uptrend.
  3. Buy ZECBTC at 0.047, SL 0.0315, Target 0.0744 and 0.1022

Weekly Chart

Though ZEC/BTC pair hit a high of 350 on October 24, we consider it to be a freak trade because on the same day it closed at 0.995121. From there, it declined to a low of 0.02265535 in end-February of this year. The subsequent recovery carried it to 0.1696 in mid-June. Thereafter, the cryptocurrency pair again fell to a low of 0.01651678 in early-December. Since then, there is an attempt to recover and we want to ride this move up.

Daily Chart

The ZEC/BTC pair is currently in a downtrend. However, it has formed an inverse H&S pattern at the bottom, which will complete on a breakout and close above the neckline at 0.0455. The downtrend line is close to the current levels. So, once the pair breaks out of both the downtrend line and also completes the inverse H&S, we expect it to start a new uptrend. The pattern target on a breakout of the inverse H&S is 0.0744. If this level is crossed, a move to 0.1022 is also possible.

Therefore, we can buy on a breakout above the neckline at 0.047 and keep a stop-loss of 0.0315, just below the right shoulder.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 9 rated postsRakesh Upadhyay is a Technical Analyst and Portfolio Consultant for The Summit Group. He has more than a decade of experience as a private trader. His philosophy is to use technical analysis for momentum trading and fundamental analysis for long-term positions. Rakesh likes to keep himself fit by lifting weights and considers himself to be a spiritual person.




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5 Comments

5 Comments

  1. Piufiu

    January 3, 2018 at 8:33 am

    Thank you Rakesh for your recommendation! As a newby that read most of the articles in the the trading section of the website, I’m still pretty confused when it comes to trade currency pairs. What I did yesterday was to place a buy order of 1 contract on Bitmex if the price hit 0.475, using 5% leverage. What happened was that there was a spike probably in ZEC that made it hit the stop and buy the contract and then the BTC surged by more than 1000$, immediately reducing the ZECBTC ratio lower than my liquidation price. And it happened the same with 50 ETC contracts. I didn’t even have time to react. Did I understand correctly what happened? I believe there is much more I need to learn before I should trade currency pairs, other than BTCUSD, which is much easier to trade IMO due to the dollar’s low volatility. What do you think? Thank yoU!

    • Rakesh Upadhyay

      January 3, 2018 at 10:14 am

      Hello Piufiu,

      Well, what you did was the right thing that is done in the traditional markets, where the liquidity is high.

      In cryptocurrencies, the top ones garner most of the volume. In others, the traders spike to take your order that is fed into the system.

      Therefore, you need to be a little extra careful.

      You don’t need to stop trading these pairs. Just that, don’t feed the buy stop into the system. Just keep an alarm, wait for the level to sustain for a few minutes, say about 15 to 20 minutes and then place the order.

      This way you can avoid getting caught in the noise.

      It is good that you had this experience initially itself, so that you will be more careful in the future.

      Please let me know if you have any more queries.

      With warm regards
      Rakesh Upadhyay

  2. Piufiu

    January 3, 2018 at 10:33 am

    Thank you very much Rakesh!

    So this means that I should be around when the break-out or the break-down begins and is confirmed (not false)? I thought that if I put a stop limit, much higher than the resistance level, I would be playing it safe. But I think that it was not far enough from the resistance level in any case (maybe got a bid greedy thinking that I should take the upward trend from the beginning)

    But even so, the traders should not see my stop-limit orders before they are triggered, no ? You meant that they sow the triggered order and acted upon them?

    And also: Is it true that even if the alt-coin’s trend is confirmed it’s still possible to get liquidated if the BTC goes up or down really fast?

    And in direct relation to the above question: How can you set your stop loss overnight in the case of currency pairs when trading against BTC, if BTC’s volatility is so high.

    Sorry for the newbie questions and thank you for taking time to answer to me!

    Have an excellent 2018!

    • Rakesh Upadhyay

      January 3, 2018 at 10:45 am

      As a general rule, though the larger traders don’t exactly know the place where the stop orders are placed. What they do know is that, above critical resistance levels, many stop orders would be placed. Hence, in the pairs where the liquidity is low, they will push the prices marginally above the resistance, suck in all the orders, sell their long positions and sit tight. You can see this happen in the traditional markets are well, nothing new here.

      As we are trading this pair with BTC, yes, the movement of BTC will also matter. However, I don’t expect the bitcoin volatility to remain elevated for long. Once the bitcoin futures see the volume pickup, I expect the volatility to reduce.

      It is not advisable to set stops either, especially, if the exchange you trade doesn’t see large volumes. Using an alert is the best method.

      These are not newbie questions, don’t worry, everyone gets them from time to time, because there is no perfect place to put a stop loss or to take profits. It’s a continuous learning experience.

  3. Piufiu

    January 3, 2018 at 12:39 pm

    Thank you for all your input! I surely learned a lot in the last couple of days… 🙂

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Trade Recommendation: NEO

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On our August 29, 2018 trade recommendation, we anticipated NEO/Bitcoin (NEO/BTC) to breakout from the large falling wedge on the daily chart. We emphasized the importance of buying only after the pair generates volume of 1 million NEO units. Without heavy volume, the breakout would not look convincing to breakout traders and trend followers. Hence, there wouldn’t be enough momentum to ignite a massive rally.

Though NEO/BTC broke out from the falling wedge as expected on August 31, the volume it printed was way below our requirements. As a result, the breakout rally was short-lived since bottom fishers saw the low volume breakout as an opportunity to take profits. The selling drove the market down. Nevertheless, this gives us a chance to buy the bottom before NEO/BTC takes off.

Technical analysis shows that NEO/BTC is respecting the historical support of 0.00245. This view comes after the pair successfully completed the retest when it dropped to as low as 0.00239 on October 15 but bulls came to the rescue and lifted the market above the support. We watched NEO/BTC from that point to see if the support will hold. The confirmation came on October 18 when volume suddenly surged. This was a signal that participants are comfortable accumulating at this level.

More importantly, the daily RSI appears to have printed a new higher low at 32.6. This is an encouraging sign as it shows that participants are no longer waiting for extreme oversold readings before entering long positions.

The strategy is to buy as close to 0.00245 support as possible. As long as the market remains above this level, it has a very good chance to rally to our initial target of 0.0034 and then 0.0046.

The process may take more than a month.

Daily Chart of NEO/Bitcoin on Binance

As of this writing, the NEO/Bitcoin pair is trading at 0.002574 on Binance.

Summary of Strategy

Buy: As close to 0.00245 support as possible.

Target: 0.0034 first and then 0.0046.

Stop: 0.00234

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.7 stars on average, based on 252 rated postsKiril is a financial professional with 4+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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Trade Recommendation: Litecoin

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The Litecoin/Bitcoin pair (LTC/BTC) dropped to as low as 0.00758498 on September 12, 2018. At that price level, the market was down by almost 70% from the 2018 peak of 0.02499999.

If you’ve been following our trade recommendations, you’d probably know that we like picking altcoin pairs that have suffered heavy losses. That’s because these pairs often have great bottom picking setups. More importantly, the bottom provides the maximum financial opportunity. We’re seeing that shape up in LTC/BTC.

Technical analysis shows that LTC/BTC is carving a bottom at 0.0082 support. While the pair is still trading inside a descending channel, we’re confident that it will break out of the pattern soon. We have a couple of technical reasons to support our view.

First, we can see multiple supports converging at 0.0082. We have the parabolic support, the uptrend support, and then the support of the descending channel. The convergence tells us to expect significantly increased demand at this level.

In addition, LTC/BTC is oversold on the weekly chart. Add the selling relief from oversold conditions to the surge in demand and we might see a breakout real soon. This is something that we’ve already seen in other altcoins such as XRP/BTC and XMR/BTC.

The strategy is to buy as close to 0.0082 support as possible. As long as the market stays above this level, it has the momentum to ascend to our target of 0.0115 first and then 0.014.

The process may take more than a month.

Daily Chart of Litecoin/Bitcoin on Poloniex

As of this writing, the Litecoin/Bitcoin pair is trading at 0.0082053 on Poloniex.

Summary of Strategy

Buy: As close to 0.0082 as possible.

Target: 0.0115 first and then 0.014.

Stop: 0.0078

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.7 stars on average, based on 252 rated postsKiril is a financial professional with 4+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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Trade Recommendation: EOS

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The EOS/Bitcoin pair (EOS/BTC) took out resistance of 0.000785 on August 28, 2018. This triggered the breakout from the large falling wedge on the daily chart. The price movement attracted breakout traders who helped generate a rally to 0.0009544 on September 1.

At that price level, breakout players and bottom fishers started to lock-in gains. The increased supply in the market drove the pair to as low as 0.000752 on September 17. Those who bought the top of the market would have been forced to cut their losses as the pair went below the breakout. The reality, however, is that this pullback is temporary.

Technical analysis shows that the uptrend of EOS/BTC remains intact. This view comes after we saw the pair respecting the uptrend support. Notice how the market just continues to glide up this level. This tells us that bulls will defend the support even if the market is pulling back.

In addition, we can see the 30-day, 60-day, and 90-day moving averages preparing to go below the daily candle. This is an encouraging sign. EOS/BTC launched a parabolic run the last time these three moving averages all went below the daily candle. We’re hoping for the same once this consolidation is over.

The strategy is to buy as close to 0.00082 support as possible. As long as the market stays above the uptrend support, it has the momentum to climb to our target of 0.0012466.

The process may take a month.

Daily Chart of EOS/Bitcoin on Binance

As of this writing, the EOS/Bitcoin pair is trading at 0.0008324 on Binance.

Summary of Strategy

Buy: As close to 0.00082 as possible.

Target: 0.0012466

Stop: 0.00078

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.7 stars on average, based on 252 rated postsKiril is a financial professional with 4+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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