What is Technical Analysis and Why is it Needed?

Technical-Analysis-Finwatchers

In basic terms the Technical Analysis (TA), a methodology, a technique that is used in the financial times like today, during buy and sell.


While Trading in either Stocks or Crypto, it works almost the same, there is no broders difference between stock’s technical analysis or any cryptocurrenc’s  technical analysis.


This method is quite easy to understand the behavior of price momentum digitally. 


Technical analysis is a trading discipline and guidance tool to measure investment valuation on charts for a short–term as well as long term directional trend signals.


On behalf of historical price momentum of any asset, speculators can assume further forecasts.


In Trading/Speculating, there is not 100% surety of success in a single attempt, it's a probability game.


Or if there is someone who can predict future trends with accuracy and 100% success rate, then please consider him/her, nothing less than the god of the financial world. 


There is most popular two ways to understand what is happening in any stocks/crypto asset.

  • Technical Analysis
  • Fundamental Analysis


These two Analysis are sufficient for any beginner or an intermediate Trader/Investor to invest in Digital assets.


The Technical Analysis displays the supply and demand zones on the behalf of historical data on chart. Among Traders/Investors there are four charts which are first priority like Bar chart, line chart, point and figure chart and the most popular is Candlesticks chart. 


The Candlesticks chart is most popular among speculators either beginner or intermediate.


The candlestick Chart is present below the Trading view chart where you can see the set of Green and Red Candles.


In simple terms, the green candlestick bar suggests bullish move conversely Red Candlestick suggests bearish move.


Source: Tradingview 


Now the Question arises, what's the meaning of bullish and bearish moves?


As we all know, in each particular industry there are some technical words and vocabulary, which shows for whom we are talking about.


Same case occurs here, in the Financial Market, the Bullish move/trend inform about gain in any individual stock/crypto price; On the flip side, the Bearish momentum/trend tells about the drop or fall. 


As reported by many big whales (investors) thoughts, we can easily find short-term trades on the candlesticks price chart by using trading tools and Traditional Technical indicators like Volume, Moving Averages, RSI etc.


These tools are really helpful while trading if you are well candid with them.  


Okay, So We Got to Know About Price Charts but How Does it Work?

The Candlesticks price chart records any individual asset’s price opening to price closing momentum and fluctuation behaviour in live markets.


The Technical analysis is an output of any asset price, Also, fundamental analysis helps to predict further opportunities before they happen.


From the historical data side, there are a number of price patterns that have been observed to take any upside/down positions, which are still reliable.

While no one can predict the next move completely, in fact, many times not all price patterns turn out to be true on speculators' predictions. So, beginner traders should stay away from this trap.

Previous Next

Disclaimer:
This information is for educational purposes only and does not constitute investment advice. No person should rely on it to make any investment. Investing carries risks, including the loss of capital. All opinions expressed are subject to change without notice. Past performance is not indicative of future results. Always seek the advice of a licensed investment professional before making any investment.