Before we go any further with this hypothetical scenario, I want to get something out of the way. As investors, analysts, people trying to make a buck, we must never, ever, become so infatuated with our investments, that we think they can never fail. When your emotions control your decisions, your decisions naturally become irrational, and irrational decisions will destroy your investments.
Now, let's look at Ripple. As we've discussed, there is a big, huge, ominous pattern, staring us right in the face. So, what does that mean? Well, it means that there is a very high probability, based on the notoriety of this technical formation, that there will be a breakdown in the near future. It isn't a 100% certainty (because nothing is certain in the investment world) however, there is a high probability. So, we have deduced that a breakdown is likely to occur. But how do we determine how far it will go? Where will it stop? In order to determine the price target of a pattern, traders will often make measurements of the structure. I would like to draw your attention to the chart. At the base of the pattern, you can see the "neckline" (black .) To measure a price target, for such a formation, we measure from the neckline, to the highest point of the head. We then copy that measurement, and paste it to the breakdown area. In this case, a breakdown from the neckline hasn't occurred yet, so I have placed the measurement in an arbitrary location, where the breakdown might occur.
So, what do we see? A price target of zero — that's what we see.
Now, am I saying that Ripple is going to collapse to zero tomorrow? No, absolutely not. Could it happen? Most certainly, unequivocally, yes. I'm just trying to illustrate this simple technical principle, that NOBODY is talking about right now. This stuff is common knowledge for analysts, but all I see are these fantasy charts that have arrows leaping off into the stratosphere. To be clear, I have seen many patterns that break down, but never reach the full breakdown distance of the height of the head. However, I have also seen a lot that have reached that distance. It's just something to think about.
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, like, comment, and share on social media. Good luck trading everyone!
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***