A beginner’s guide to cryptocurrency analysis and forecasting the digital asset market

A beginner’s guide to cryptocurrency analysis and forecasting the digital asset market

Improving analytical skills is a process that might seem daunting. Thankfully, Jonathan Martin, a Cindicator ambassador and a long-time superforecaster, has prepared a guide to forecasting asset prices.

In this post, we summarise and outline his articles to make it easier for you to find the right place to jump in, depending on your knowledge level and goals.

“Cindicator predicting has been integral in getting me to a place where I feel comfortable trading in the real world, and the skills I have learned are helping to take me to a level where I feel stable in my ability to navigate the crypto exchange,” Jonathan writes. Getting this level of familiarity with the market could be costly if you start trading without experience, he adds. Every mistake would be eating away at available capital.

It’s a lot safer to first practice by forecasting asset prices with Cindicator. Bookmark this post and return to it as you make forecasts and encounter new types of questions or terms that you’re not familiar with.

Part 1: binary questions, understanding satoshi prices, key terms

If you are new to forecasting with Cindicator and/or the digital asset market in general, you should start with the first article.  

Binary questions about digital assets, US stocks and futures are the most common type of questions on the Cindicator platform. Jonathan presents his own way of tackling those with examples and detailed explanations.

For many altcoin trading pairs, prices are given in “satoshis” or “sats”, i.e. 0.00000001 bitcoin. Jonathan does a great job explaining how to understand and quickly read prices in sats.

The first article also lists the key terms for cryptocurrency analysis and trading — if you don’t know any of them, fill this gap as soon as possible:

  • Bull/bear;
  • Market sentiment;
  • Support/resistance;
  • Trends;
  • Candlestick charts;
  • Technical analysis;
  • Black Swan events.

The article ends with an additional list of books on technical analysis, cryptocurrency tools, and suggested reading to dig deeper.

Part 2: price range questions, completing the patterns

If you’ve already made some forecasts, got the hang of the Cindicator app and understand the key terms, the second article might be the appropriate place to start.

Range questions

Jonathan explains what “range questions” are and how he makes forecasts by completing the patterns. It’s not just theory – he accompanies his explanation with actual charts and entries from his forecasting notebook.

As you might know, price range questions are often used to identify Support and Resistance levels. The article digs deeper into what S/R levels are.

Part 3: date questions, rank questions, value questions, open questions, daily habits

After you’ve been forecasting regularly for weeks or even months, you’ll encounter additional question types. Jonathan’s third article summarises his approach to analysis required for answering date, rank, value, and open questions.

Habits for forecasting

When you forecast every day, having effective habits can help tremendously. Jonathan briefly offers his suggestions for daily practices and the right mindset for forecasting digital assets and the global market alike.

Part 4: cryptocurrency trading tools, exchange basics, key concepts, workflow for traders, advice

Once you’ve consistently ranked high in the Cindicator ratings and improved your accuracy to a decent level (Jonathan suggests 70%), you’re probably thinking about trading actively. In that case, Jonathan’s fourth and final article will equip you with the starting knowledge and tools for trading the cryptocurrency market on your own. It’s a really detailed article, even longer than his earlier posts!

Cryptocurrency trading tools

Jonathan suggests a list of tools that can help frequent traders in a highly competitive environment. First, he reviews several scanners or screeners that are useful for prioritising traders. Then he examines several tools for charting, analysis, and trading on an exchange with advanced order types. He also shows an example of his trading sheet where he records his metrics.

Crypto exchange basics and types of orders

This is a section you definitely don’t want to skip if you’re new to exchanges. Forecasting and technical analysis skills are prerequisites for trading, but to be profitable you need to fully understand how exchanges work and execute orders. Jonathan lays the foundation by explaining stop-loss orders and other key terms: slippage, OCO orders, trailing stop order, dynamic take profit, and more.

Developing a trading plan

After you’re comfortable with the exchange, it’s time to develop a plan for your trades. Jonathan offers his approach based on having at least 7 compelling reasons for a trade. This part is also accompanied by examples from Jonathan’s trading records.

Advice from Martin Lawrence and more

While preparing his guide, Jonathan also consulted with Martin Lawrence, a long-time superforecaster who has joined the Cindicator team. Martin offers his 16 tips for trading — that’s enough for a whole separate article! …And there is yet more advice and suggestions for exploring trading on new platforms, including algo trading.

Do you have any questions?

We know this is a lot of information and knowledge to absorb. But maybe you have some specific and burning questions or topics that you’re trying to explore. If so, please let us know via this form.

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