What’s up, guys? This is Tai Zen. Just want to run through a quick video and do an analysis here of the Ethereum prices. You guys have seen that Ethereum has fallen quite a bit here, since the high of the 37 million a bit mark here.
I’m going to grab a parallel channel on a daily chart, and I’m gonna whip out this trend line right here. You guys look at the trend that we’re in, obviously, we are still in an uptrend over the long term, we are in an uptrend, but if you look over here and we enlarge it a little bit. So you guys look at the short term, this happens to be an area of confluence.
Many of you guys have heard me say this over and over again. An area of confluence is anytime where 2 levels meet together, basically 2 price action levels, meaning that the price came down here in the short term, and it’s hitting this side of the channel, it’s almost touching this side the purple channel. Then if you guys look on the way up, it’s hitting on this long term trend over here which is extremely important.
You guys see that this long-term trend always takes priority first. So when you guys come in here I would say that this is a good opportunity to buy right here. Let me put in the price points that you guys want to get in there.
So, if you guys buy in right here, this would be the ideal buy point right here at the green line, somewhere between that green line and anywhere in here would be fine. Now you can buy anywhere in between those areas. Now if you buy above here when it starts to break above the purple line right here, if you buy it when it breaks above that purple trend line, then you have confirmation that the trend is back-up again and the intermediate short-term downtrend is done.
If you buy up here, the problem with that is that you take a lot more risk, waiting for confirmation. So basically your stop-loss on this trade is gonna be somewhere in here, below this low. So your stop is gonna be below this low.
And for sure, if you guys getting it right here, once it breaks below the low of this then you’ve really got to get out. However, if you look at what’s available when we come back up to here, let’s make sure that there’s enough reward potential at the rate that it’s increasing, that it travels in. If you guys look at the trend of where we were at before here, until it moved up here, similar to that, you see how this trend is going up.
And let me just put this here as a different color so you guys can see what I’m talking about. We can expect the trend to continue if it continues up. We can expect a little head somewhere up to here, like that.
So the heads up to here, I’m still projecting it towards this 50 mil a bit mark right here, guys. Right here, around the 50 mils a bit, somewhere up there, I believe that price can possibly reach there. So, I can see the price coming from here all the way up to there, very easily.
If you guys come in right there, it gonna be somewhere in this area that I believe that price will come to, and since 50 mil a bit is a whole even round number, that’s why I’m projecting it to come out there. I don’t project it to come just straight in, like that blue trend line shows.
I project that if you take this, you see how it ran up, and then it pulled back right here, and it had this huge pullback right there, I expect it to run up and pull back at least 3 or 4 times before it comes up to this red line with a 50 mil a bit mark does. Now if you put your stop-loss down here, and you wait for confirmation, then you’re gonna take a big risk to make this trade.
But if you get in somewhere below down here, then what happens is even if it only goes to this other side of the channel, your risk is way less if you get out below here. Now here’s the thing a lot of people ask me this all the time: “What happens Tai if I get in, and then I get stopped out right here in this area where the white circles at?”, “What happens if I get out right here, get in right there where the price is at right now? It comes down, and it stops me out, and then goes back in my favor.”
Well, if it comes up here and stops me out, what I do is after it comes back down and when it comes back up, I’ll re-enter the trade right here again to take it across. So in other words, I will be willing to take up to 3 shots, to get back up to there. If you get in right here, and immediately within 24 hours, it starts to eat up your stop-loss, it starts to come down then you might want to consider unloading half of it before it comes down here.
Anywhere in this region is okay, I would say right there to go along. But the longer that you wait for the price to come up to get confirmation, once it breaks this purple trend line, the more confirmation that you seek, the more risk that you take, the less reward that you get also. So if you guys enter inside this green circle right here, or this green area right here.
The lower you enter, the less risk that you take because the stop-loss is going to be under here anyway. Do you guys see that? The stop-loss is going to be here underneath the low of this wild tale, this candle tale right here regardless of how you guys look at it. If you guys are here then you take a lot less risk, but if you wait for the price to come up and break this purple downtrend before you get in.
Then what happens is you have exposed yourself to more risk, you’re exposing yourself to more risk and less reward. So that’s the price that you pay for whenever you look for a confirmation on a trade. So there’s really no way to get confirmation guys, and to reduce a lower risk at the same time.
So just keep that in mind, guys. I hope that this video helps you guys out, because we got a lot of people that are asking me about what way to get in, and stuff like that. And we’re always looking for at least a 3 to 1 or better risk to reward ratio.
So even if you get in up here, once it breaks the purple downtrend line, there’s still potential for a 3 to 1, risk to reward. But I prefer that if you get in right here, in this green area like that, the reason why is because then now my risk has been reduced. Now I have a 5 and 1/2 to 1, the risk to reward ratio.
So I take a smaller risk, and the chance of me making more profit is also a lot higher, and it goes up to the 50 mils a bit price mark that I mentioned then you have a 6 to 1 winner. And hopefully, that helps you guys understand how to analyze the trend of this, and look for a potential gain. Thanks a lot, guys for watching this video, And if you guys have any questions or any suggestions for a future video, let me know.
Just about an hour ago, somebody mentioned that I have the investor phone calls that I have with my buddy, my friend Leonfu.com. They asked me if I can make the audio quality better guys, and right now I’m using what’s called the Boldbeast call recorder, and I have tested over 7 or 8 different call recorder apps for the Android phones for my Samsung S5 phone, and I have not found any record calls better than the Boldbeast call recorder.
So that’s what I’m using, I know that the quality can be better, and if you guys have a better call recorder, let me know. Samsung has a built-in call recorder that goes on all their Android phones. The only problem is that when they ship the phones to the US, they remove that that factory call recorder so I don’t have it, but the factory call recorder is very good.
But they do not allow us to have that in the United States for privacy reasons, but they do have them outside the US. So if you guys know any that’s good, let me know, even if it costs money, I’ll get it, it’s not a big deal. But I would like to have better call quality, but by now that’s the only thing that I have.
And a lot of times Leonfu.com, the Oracle of Austin Texas, and I are discussing Cryptocurrency investments and the research that we’re doing in the analysis. A lot of times we really don’t have time to edit the videos and do all that stuff, what happens is I turn on the call recorder and that’s the fastest way for us to share what we know with you guys.
So you guys will have to bear with us on that. Sorry about that. Thanks for watching this video, and I’ll see you guys in the next video.