-INTRO-
You like to have blockchain-technology as a revolution for more equality, transparency, fairness and real opportunities in the future and for less of authority and less fraud and maybe a lot more good reasons for. So we agree on making a better world using blockchains and crypto currencies.
Anyway as soon as you want to buy your first crypto coins you have to decide what is a good price or when is good time to purchase. Maybe you think about using established techniques from the stock markets. The most valuable and complete description of these you could find surching for ‘What Works On Wall Street’ and ‘O'Shaughnessy’. Let me tell you in advance that at least you will discover that quite a lot of these methods cannot work in the cryptocurrency market as the input data isn’t available at all. This is because there is no ‘dividend yield’, ‘price to sales’, ‘debt to equity’, ‘return on assets’, or many more.
I am investing in financial assets since 1987. After a few successful trades NYSE crashed in autumn and my profits turned to losses. This was when I started an exploration on how to evaluate prices on financial instruments. To make a long story short: I’m still in the market and have earned a handsome profit; most of the financial indicators that you see on websites I can calculate with my own tools which makes me able to adapt them to the new world of crypto currencies; additionally there is one analysis method which I developed using R that you cannot find on any financial website, but this is a topic for another blog coming in near future.
-MAIN-
From my experience, to get an impression on how likely prices for a crypto currency tends to go up or down, have a look on MACD (moving average convergence divergence) and WMA (weigthed moving average). Both indicators you can find e.g. on teletrader.com under the chart-tab. The standard setting for the WMA using a periode of 38 days is quite well. For the MACD the standard settings (12, 26, 9) are not too good for crypto currencies but you cannot change them here. (For crypto currencies I use it with different settings: 52, 9, 12) Also take care that both of these indicators do not have an upper or lower limit. So you have to compare them with previous situations of the instrument you are looking at.
If the actual price of the crypto coin you explore is away from the WMA it will tend to come back. So you have a direction where the price is likely to go. A strong signal is when the price crosses WMA from above to below and vice versa. But have a look at the historical situations, where the currency price is above or below the WMA for a long period. So watch out for the crossings.
Some more experience you need for using the MACD. This indicator has a fast and a slow line. The level of both lines shows if the price of the currency is rather high or low. You can decide whether MACD is high or low by comparing the MACD with former times.
Always have a look on different periods. So check the indicators for 6, 3, and 1 months and also for a week and intraday.
A last hint: As long as the price for some crypto currencies is exploding to the sky you always loose on waiting for a better chance.
-picture-
For easier understanding have a look at the picture using:
https://www.facebook.com/766918460154977/photos/a.788236138023209.1073741828.766918460154977/852539081592914/?type=3&theater
stay tuned, DeFacto