Price channel trading: XRP
XRP is an unusual coin.While it has no real appreciative value, it does provide very good trading value.
What makes XRP so unique compared to other cryptocurrencies? One thing, and its not related to XRP's fundamentals.
XRP is often regarded as the unstable stablecoin simply because it has a very pronounced price channel.
A price channel is where an asset typically remains consistantly between an lower boundary and an upper boundary. Stablecoins, like USDT, are common for this natural occurance. Most cryptocurrencies are not common for this behavior. Their prices fluctuate unpredictably.
XRP has been very consistent lately. If you have a lower boundary of 0.26 and an upper boundary of 0.29, you will consistantly profit roughly 10%. The amount of time needed for this to happen is, of cource, questionable.
Finding a price channelis fairly easy. You can use long range moving averages based on the high/low of a candlestick using a script or series of scripts. I chose to write my own which lets me fine tune this approach into a consistent profit.
There are a few thing to be aware of.
First, you will be buying each and every time the price drops below your lower boundary. That can actually be alot of purchases very quickly, depending upon your budget. Planning your budget will be very difficult, unless you use an isolated wallet where you can just let the algorithm exhaust it. You could alo filter the number of purchases, but you will inherently dimenish your profits.
Second, risk assessment become very difficult or even impossible to messure. An asset like XRP has been price bound for a long time, but there is no way of knowing if that will hold true in the near foreseeable future. It could become as unstable as BTC, or it could liquidate into nothing.
No risk / no reward is a common theme among crypto traders. How much risk is too much? Only careful analysis can answer that.
The attached chart is my own analysis using the tools I wrote. This is a fairly easy trading method, if you have the budget to survive the accumulation.
I chose a very simple entry point of buying in when the price drops below 0.26 and an aggressive dollar cost averaging process that triggers at a flat 2% profit. This fits my own risk assessment. If you have a higher risk tolerance, you could potentially wait for the price to cross 0.29 before you sell. The flexibility of this approach lends itself to many different levels.
What makes XRP so unique compared to other cryptocurrencies? One thing, and its not related to XRP's fundamentals.
XRP is often regarded as the unstable stablecoin simply because it has a very pronounced price channel.
A price channel is where an asset typically remains consistantly between an lower boundary and an upper boundary. Stablecoins, like USDT, are common for this natural occurance. Most cryptocurrencies are not common for this behavior. Their prices fluctuate unpredictably.
XRP has been very consistent lately. If you have a lower boundary of 0.26 and an upper boundary of 0.29, you will consistantly profit roughly 10%. The amount of time needed for this to happen is, of cource, questionable.
Finding a price channelis fairly easy. You can use long range moving averages based on the high/low of a candlestick using a script or series of scripts. I chose to write my own which lets me fine tune this approach into a consistent profit.
There are a few thing to be aware of.
First, you will be buying each and every time the price drops below your lower boundary. That can actually be alot of purchases very quickly, depending upon your budget. Planning your budget will be very difficult, unless you use an isolated wallet where you can just let the algorithm exhaust it. You could alo filter the number of purchases, but you will inherently dimenish your profits.
Second, risk assessment become very difficult or even impossible to messure. An asset like XRP has been price bound for a long time, but there is no way of knowing if that will hold true in the near foreseeable future. It could become as unstable as BTC, or it could liquidate into nothing.
No risk / no reward is a common theme among crypto traders. How much risk is too much? Only careful analysis can answer that.
The attached chart is my own analysis using the tools I wrote. This is a fairly easy trading method, if you have the budget to survive the accumulation.
I chose a very simple entry point of buying in when the price drops below 0.26 and an aggressive dollar cost averaging process that triggers at a flat 2% profit. This fits my own risk assessment. If you have a higher risk tolerance, you could potentially wait for the price to cross 0.29 before you sell. The flexibility of this approach lends itself to many different levels.
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