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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.

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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

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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 8 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: Request Network

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The Request Network/Bitcoin (REQ/BTC) market launched its bull on December 30, 2017 after breaching resistance of 0.000025. Its momentum was so strong that it went as high as 0.0000722 on January 6, 2018. At this point, however, the market was in overbought territory considering that it has grown by over 183% in a week. This inspired a round of profit taking which forced the market to go as low as 0.0000355 on January 16.  

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Sensing that a higher low was in place, bulls bought positions, and pushed the price up to 0.00005755 on January 18. Bottom pickers exploited the 62.11% increase in two days, and since then, the market has been gradually dropping. This dip can be an opportunity to place buy orders at a discount.    

Technical analysis reveal that the Request Network/Bitcoin pair is about to touch support of 0.000025. At this level, those who bought the breakout and the bounce have most likely sold their positions. This can be seen by the significant decline in volume for the last six trading days. As supply dwindles, it can ignite a rally that can bring the market back to life.  

The strategy is to buy the support, and sell the resistance. Buy as close to 0.000025 support as possible. Sell as close to 0.00006 as possible. Once bulls successfully defend 0.000025, the pair will most likely resume its move to the resistance level of 0.00006. The process may take about a month.

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Daily Chart of Request Network/Bitcoin on Binance

As of this writing, the Request Network/Bitcoin pair is trading at 0.00002563 on Binance.

 

 

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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4.2 stars on average, based on 63 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: Power Ledger

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The Power Ledger/Bitcoin (POWR/BTC) pair restarted its uptrend on December 18, 2017 when it breached resistance of 0.000055. It had such a powerful momentum that it went as high as 0.00013299 on January 4, 2018. Unfortunately for buyers at this level, the market was in overbought territory. In addition, the pair has grown by over 140% in three weeks. The rapid ascent was exploited by breakout players as they took profits.

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Faced with heavy selling pressure, the market went as low as 0.000064 on January 16. After seeing that the market already lost over 51% in two weeks, bottom pickers swooped in, and sent the market to as high as 0.00011 on January 20. However, 0.00011 was a lower high, and it rattled both traders and investors. Consequently, the pair plunged to as low as 0.00005831 today, February 21.

Technical analysis show that the Power Ledger/Bitcoin pair may plunge some more as it is well on its way down to support of 0.000055. At this price point, breakout buyers and bottom pickers would have most likely sold their positions. Volume has been below average for the last 11 trading days. This could be an indication that sellers are exhausted, and that could ignite a buying frenzy.  

The strategy is to buy as close to 0.000055 support as possible. Once bulls defend this level, the market will likely begin its climb to our target of 0.000115. The process may take a month.

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Daily Chart of Power Ledger/Bitcoin on Binance

As of this writing, the Power Ledger/Bitcoin pair is trading at 0.0000635 on Binance.

 

 

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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4.2 stars on average, based on 63 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 (LTC/BTC) pair kicked its uptrend into overdrive on December 11, 2017 when it took out resistance of 0.012. The force of the breakout was so strong that on December 12 the market went as high as 0.021. In as little as 24 hours, the market grew by 75%. It was enough for breakout traders to dump positions.

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As profit taking became the theme, the market dropped to as low as 0.0135 on December 15. Bottom pickers saw that a higher low was in place so they rushed in to buy positions. The renewed momentum brought the pair up to 0.020099 on December 19. For about a week, the market attempted to claim 0.02 resistance but bears defended that level. As a result, the pair went as low as 0.013 on January 5, 2018. While the pair bounced, it again wouldn’t threaten to breach resistance of 0.02 until recently.  

Technical analysis show that the Litecoin/Bitcoin pair broke 0.02 resistance with massive volume on February 14. While the market did correct one day after the breach, it appears to be respecting support of 0.02. In technical analysis, a firm resistance turns into a firm support after a breakout. 0.02 could be the new higher low that takes the pair to new highs.  

The strategy is to buy at the support level. Once bulls successfully defend this level, the pair will likely explode to our target of 0.028. The process may take a month.

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Daily Chart of Litecoin/Bitcoin on Binance

As of this writing, the Litecoin/Bitcoin pair is trading at 0.02 on Binance.

 

 

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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4.2 stars on average, based on 63 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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