Forecasting
Anticipating market movements using technical, fundamental or behavioral analysis.
Beginner-friendly explanation
Forecasting in trading means trying to predict whether an asset’s price will go up or down. You can use simple tools like chart trends or news updates.
Example:
Bitcoin has been rising for a few days, and good news about adoption is announced. You believe the price will continue to rise — that’s a forecast.
Intermediate-level insight
Forecasting is based on interpreting technical signals (indicators, volume, patterns) and/or fundamental data (macro, earnings, news). It aims to form hypotheses about likely price moves in the short or medium term. This may rely on statistics or trader experience.
Example:
A trader spots a head-and-shoulders pattern on Ethereum, an overbought RSI, and declining volume. He predicts a possible correction — that’s structured forecasting.
Advanced perspective
Advanced forecasting is a probabilistic approach combining quantitative analysis, market cycles, crowd behavior, and cross-asset correlations. Forecasting models can include algorithms, AI, or Bayesian logic. Forecasts express scenarios and probabilities, not certainties.
Example:
A hedge fund models BTC behavior using Twitter sentiment, on-chain flows, and Nasdaq correlation, generating a 68% probability of price increase over 5 days — a multifactor quantitative forecast.
Trading Strategies
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