In this technical analysis review, we intend to provide you with a proper way how to do conduct market analysis. Trading without prior market investigation has a high risk of failure. Without background knowledge, functions may backfire greatly, which is why we provide this guide as a reference.
This article shows difference between crypto and Forex analysis, as well as platform that do offer technical investigation. You should also check our article about crypto fundamental analysis.
What is Technical Analysis?
Technical analysis is a financial tool that traders use to identify price trends and figure out smart trading choices. In essence, they analyze the existing market data and try to make an informed decision. Although it sounds complicated, it is nothing more than analyzing the demand and supply in the desired market.
Technical analysts look to identify patterns in the price change throughout history. Based on the existing statistics, they make an assumption on the future price and come up with a trading decision. Taking a look at charts is an essential thing to do during technical analysis. You can identify trends by keeping track of moving averages, support and resistance levels, and trading volume.
Is Technical Analysis Applicable for Crypto
The same technical analysis’ tools applicable to Forex and other markets can be used for crypto coins. Simple moving average (SMA) is a tool even newbies can utilize. You just need to observe the price fluctuations in the last 15 days or a month. Try to notice patterns and predict a rise or fall of the price in the coming days.
Technical analysis is more reliable in stable markets. Crypto world is, however, known for its volatility. That does not mean technical analysis will not work. It just means that you need to be more careful when using it. We all know that value of cryptocurrencies can change drastically in no time. That is why you should take any results of your analysis with a pinch of salt.
Crypto Trading Psychology vs Forex Trading Psychology
Experts will tell you that trading psychology has an advantage over skill and knowledge when the time for a decision comes. You need to be aware of four emotions you experience while trading – fear, anxiety, greed, and euphoria.
There is no big difference when it comes to crypto VS Forex trading psychology. The crypto market is more volatile and it might require quick decisions. Other than that, the traders exhibit the same behavior.
Greed toward becoming rich may drive you to throw logic out the window and make an irrational trading decision. Greed sometimes comes combined with euphoria. If you earn some profit, you might think that you cannot be wrong, which may result in poor decisions and lead to losses.
On the other hand, fear prevents you to make logical choices because you are afraid to lose money. If you record a loss in one trade, you become anxious. The experts suggest setting both profit and loss limits to maximize your long-term earnings.
Best Web Platform for Technical Analysis
Dozens of different tools for technical analysis are available to internet users. The crucial features to look for are live updates and comprehensive information. You can also choose between simple and advanced interfaces depending on your level of knowledge and skill.
CryptoWatch offers real-time market data and price charts for over 30 supported cryptocurrencies. You can also choose one of 19 available exchanges or look for quotes. The charts offer comprehensive information and drawing tools you can use to predict future price fluctuations. Youc an see the charts in the picture below.
CrypTrader has been around for five years and it is an excellent tool for technical analysts. You can choose markets from several different exchanges and analyze various charts. Candlestick patterns, depth charts, open orders, and trade history, are all available. The interface is more suitable for advanced traders.
Trading View has a simple interface appropriate for newbies. It keeps track of more than 20 crypto-to-fiat and crypto-to-crypto markets. It supports Bitcoin, Ripple, Ethereum, Bitcoin Cash, as well as U.S. Dollar, Euro, British Pound, and Japanese Yen. You can take a look at the technical analysis summary and get advice on whether you should sell or buy at that moment. You can check out the interface of the platform in a snapshot below.
Cboe focuses on the stock exchange, but at the beginning of 2018, it launched Bitcoin futures. They are doing business in Chicago, which means that US-based customers can use their services. If you are a veteran trader, using Cboe services is a must. They offer a bunch of tools for technical analysis and trading options.
Best Mobile App for Technical Analysis
It is crucial to have access to your tools at all times. However, you cannot be by your PC 24/7. That is why you should install and use some of the free mobile apps for technical analysis.
Coinigy is a perfect tool to manage your portfolios and crypto trading endeavors on the go. The app is free for both Android and iOS and you can get it via their respective stores. All updates are live and the tool offers incredibly comprehensive information. Combined with a simple interface, that makes Coinigy a must-have app!
zTrader supports more than a dozen exchanges and hundreds of currencies. You can quickly move from one currency to other thanks to the responsive and user-friendly interface. The charts provided enable a reliable tool for technical analysis. The app is free, but it is only available for Android.
Blockfolio is a useful app that provides real-time candlestick charts and live order book for each currency supported. It also tracks the earnings and losses and sorts them depending on currencies you used. A custom news feed with recent news is also available. The app is free and available for both iOS and Android.
The features of TabTrader include BTC charts, as well as technical indicators such as moving averages, Bollinger bands, and others. You can even use the direct trading options from the chart. It supports Bitcoin, as well as Ethereum and Altcoin. TabTrader is available for free via the official website.
Technical analysis is crucial for traders to have success when investing in cryptocurrencies, as shown but this article. There are many platforms that offer the service in terms of charts, data indicators, and API tools. These instruments gather data and translate it into information for you.
Yet, we do need to emphasize importance of your own involvement. At the end of the day, you are the one with final decision on when and how to trade. Thus, you should not rely 100% on programs but use your own knowledge and experience as well.