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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: Monero

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The Monero/US Dollar pair (XMR/USD) climbed as high as $469.50 on December 20, 2017. This marked the end of an impressive bull run that saw the pair grow by more than 700% in four months. From this point, the XMR/USD has been in a downward spiral. The good news is that a significant bounce is on the horizon.

Technical analysis reveal that XMR/USD is showing signs of a potential rally. First, we see the pair about to hit the apex of the large falling wedge on the daily chart. This pattern is so large that it is also visible on the weekly chart.

A quick look at the falling wedge shows that the market always bounces when it drops to the support. The market is currently sliding down the support side of the wedge. This gives us reason to believe that a bounce is in play.

On top of that, XMR/USD is also about to touch its long-term support. This trend line has existed since March 2017. The strength of this support should make it difficult for bears to push the price further down.

Lastly, we can see a bullish divergence on the daily RSI. This tells us that XMR/USD is gaining momentum. This signal also affirms our arguments that the support will hold and that will lead to a significant bounce.  

The strategy is to buy as close to $80 as possible. Should bulls hold on to this key support, they will likely inspire a rally to our target of $125.

The process may take less than a month.

Daily Chart of Monero/US Dollar on Kraken

As of this writing, the XMR/US Dollar pair is trading at $82.59 on Kraken.

Summary of Strategy

Buy: Buy as close to $80.00 as possible.

Target: $125

Stop: $75

 

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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3.6 stars on average, based on 223 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: Aeternity

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The Aeternity/Bitcoin (AE/BTC) pair surprised investors when it went as high as 0.0006333 on April 29, 2018. Before that move, AE/BTC was trading at a low of 0.000159 on March 18. This means that those who bought at the low grew their investments by over 300% in less than a month.

Unfortunately for buyers at 0.0006333, participants exploited the pump. The market has been dropping since. Nevertheless, it appears that AE/BTC is ready for bottom picking.

Technical analysis show that AE/BTC is trading inside a large falling wedge. The pattern is about to hit the apex just as it is about to touch the line in the sand of 0.000165 support.

Call it coincidence, market psychology, or manipulation. What’s important is that we know that 0.000165 is an area where demand exceeds supply. This is the staging ground that kickstarted the bull run earlier this year when the market surged to 0.0006333. This tells us that the “smart money” likes to buy at this price level.

The strategy is to buy as close to 0.000165 support as possible. If our assumption is true, then the “smart money” or the “whales” will start buying at this level. They will also defend on the support to protect their positions. This should spark a rally to our initial target of 0.0002532.

The process can take less than one month.

Daily Chart of Aeternity/Bitcoin on Binance

As of this writing, the Aeternity/Bitcoin pair is trading at 0.000176 on Binance.

Summary of Strategy

Buy: As close to 0.000165 as possible.

Target: 0.0002532

Stop:  0.000159

 

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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3.6 stars on average, based on 223 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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Long-Term Trade Recommendation: ZRX

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The 0x/Bitcoin (ZRX/BTC) pair looks bearish short-term, but it looks quite the opposite in the medium and long-term. The drop from 0.00018629 resistance appears to be a “buy on dip” rather than a full-blown correction. We have the technicals to support our view.

Technical analysis show that ZRX/BTC is trading within a wide ascending channel in the daily and weekly charts. The structure looks strong because it is not widening nor contracting. On top of that, the higher highs and higher lows are generated as a result of healthy consolidations and corrections. The symmetrical triangle pattern emerging in the daily chart is proof of this healthy consolidation.

Currently, the symmetrical triangle pattern appears to be completing the C-wave, which is often the penultimate leg down before the breakout. ZRX/BTC needs to complete two more waves before it can break out of the pattern and resume its climb to the top end of the range. Triangles take time to complete, which is why this is a long-term trade recommendation.

The strategy is to buy as close to 0.00012 as possible. If bulls preserve the long-term support, they will inspire a rally to our initial target of 0.00017. We expect one more leg down before ZRX/BTC can climb to our longer term target of 0.00025.

The process may take three months.

Long-Term Chart of 0x/Bitcoin on Binance

As of this writing, the 0x/Bitcoin pair is trading at 0.00013570 on Binance.

Summary of Strategy

Buy: As close to 0.00012 as possible.

Target: 0.00025

Stop:  0.0001

 

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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3.6 stars on average, based on 223 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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