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For those new to investments in encrypted assets, the wide range of technical analysis indicators and graphical tools can become quite daunting. In addition, different media offer daily technical analysis reports for cryptocurrencies, but how do you know what analyst opinions you can trust?
Technical Analysis 101
Technical analysis, also known as graphical analysis, is a method for evaluating the price movements of various activities – including stocks, bonds, commodities and cryptographic activities – in an attempt to identify the price trends and predict future price movements.
Unlike fundamental analysis, technical analysis focuses exclusively on price action with respect to the intrinsic value of the resource in question. Graph analysts use various technical indicators and analytical tools to assess where the price of a next good can go. In addition, chart analysts believe that all the information necessary to evaluate an asset lies in its price changes and trading volumes and that these are better indicators than the fundamentals of an asset (use cases, management team) , customers or users, market capitalization, etc.) [19659004] It is important to note that there is a great division among investment professionals on the validity of technical analysis and its predictive powers. Some believe that the analysis of charts is not too different from astrology, while others base their entire trading strategies on technical indicators.
While chart analysis does not accurately predict future price movements on a consistent basis, it can be a valuable tool for finding the right levels of entry and exit for your operations and for identifying trends in prices. prices.
All technical analyzes are not the same: what to look
The Internet is full of technical analysis reports for stocks, commodities, forex and now also cryptocurrencies. While it's nice to see an increase in analysis for the encrypted markets, the reality is that the experience of technical analysis experts varies greatly. So, it is important to know what to look for when reading a technical analysis report.
To evaluate the feasibility of a technical analyst's report, you can examine the following three aspects:
The credentials of the analyst
First, you need to see what credentials the 39. an analyst who provides him with the experience necessary to provide information on price movements of encrypted resources. If the analyst has a background in technical analysis, perhaps through previous jobs in the financial markets or a successful track record in trading, reading their analysis will probably give you an interesting insight into the latest price movements. If the analyst is nothing more than a blogger, who wants to capitalize on the growing demand for investment content in cryptocurrency, then it is better to avoid and find reliable sources for technical analysis reports.
What indicators are used [19659013] Secondly, it is necessary to consider the combinations of indicators that the analyst uses and how valid their predictive powers are. For example, studies have shown that the use of a single technical indicator will not determine strong predictive powers. So, we want to look at TA reports that incorporate different indicators that complement each other in their predictive powers. An analyst who only looks at an indicator is probably not as expert and he or she claims to be.
A successful track record of "being right"
Third, retracing the older reports of graphic analysts to see if their analysis has a predictive power or not. In other words, check if they were right in the past. A successful curriculum suggests that the analyst has found a good combination of indicators that work for him and for the assets they are covering.
Looking at these three aspects of a technical analysis report and its author, you will be able to find high quality reports that you can read on a weekly basis to compliment investment research.
Should you read the technical analysis reports for Bitcoin and other cryptocurrencies?
While it is up to you to decide whether you believe in the predictive powers of technical analysis or not, it can never hurt to get perspective from an expert analyst of graphs. If possible, a good deal of technical analysis can provide you with information on entry and exit points and can help you determine where to set your price targets and stop-loss limits if you are an active trader.
suitable for the analysis of graphs as "inefficient" markets. It is difficult to assess the fundamental value of the activities and they work 24 hours a day, 7 days a week, which makes the graphs more evident.
It is also important to note that the more people watch and trade using the technical indicators, the more the market moves based on the purchase and sale of signals generated by these indicators. So, since the number of technical analysis reports for bitcoins grows, which has in recent months, you could object, the more you gain in predictive power.
Having said that, historical data on the accuracy of the price of cryptographic resources the forecasts made by technical analysts are too limited to form a conclusive judgment on the fact that previous cryptocurrency prices can help predict future price movements. .
Nevertheless, technical analysis can be a useful tool for identifying market trends, which in turn can be used to make more informed investment decisions.
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For in-depth analysis reports on a series of cryptographic resources, take a look at technical analysis reports on Brave New Coin by Josh Olszewicz , Aditya Das and Christopher Brookins.
