Approximately Correct versus Precisely Wrong
As noted by Ray Dalio in his book “ was largely ignored and even laughed at back in early March when $ZRX was trading at $0.60, given its simplistic linear methodology. Since then, $ZRX has traded almost exclusively within our predicted price ranges and still does as of July 11, 2018.
Back in mid-March, within our full investment report of Zcash (ZEC) (page 12), we made a price prediction when $ZEC was trading around $260, which was recently attained despite intermittent price gyrations. The price movements were largely attributable to the market “end of tax season bottom” and Gemini listing, which ultimately topped out at $382. As mentioned in caveat 3, a stomach for counter-trend price movements is needed until price ultimately succumbs to the overall market trend.
This theory and approach is not re-inventing the wheel and nor is it wholly novel. But, what anyone who has studied data science will assert is that often times, the simplest models are the best ones. Are there limitations to this approach? Absolutely.
However, it does provide a more simplistic framework for crypto market practitioners to analyze and forecast asset prices based upon a common trend following methodology. Furthermore, this approach is more inclusive to retail investors given building a linear model is far simpler than sophisticated machine learning methodologies.
Disclaimer: This analysis has been designed for informational and educational purposes only. Readers are advised to conduct their own independent research into individual assets before making a purchase decision.