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^{cover design by @codingherald}

Greeting steemians hope we all had a great day. I'm quite excited about this challenge its really a great topic on write on.

In the field of trading, be in the cryptocurrency, forex or stocks space or any space that involves trading of currencies or currency pairs, technical analysis is one method of trading that can't be ignored as a majority of traders depend more on technical analysis for their trade setups and simulations. Trading crypto involves other methods like Fundamental analysis and Sentimental analysis and Technical analysis which all play a very very important and big role in trading and depending on the institution you trade with or the security, it'll determine the method you will go for same as a majority traders makes use of all the methods together in trading.

TECHNICAL ANALYSIS

What is technical analysis?

Defining technical analysis, i'll like to look into a platform that offers the technical analysts services or that offers a platform for technical analysis which is the trading view.

Technical analysis is a trading tool employed to evaluate securities and attempt to forecast their future movement by analyzing statistics gathered from trading activity, such as price movement and volume. source from Tradingview.

Having this definition in mind, we understand that technical analysis had to do with analyzing, organizing and "back testing " past trade history to be able to come up with a prediction or simulation for the current and future trades. And this is because technical analysts (those who engage in technical analysis) believe that the market gets to replay itself which means some parts or points in the market history have impact or contribute to the markets current behavior and also future behavior.

Importance of Technical Analysis.

Technical analysis plays a very big role in the crypto space today and is a method that can't be ignored for some reasons i'll try to list out.

Regarding efficiency, veracity and fastness, technical analysis plays a very important role in the crypto market and this is because the data and results and present 24/7 (always present) which means at any given time that you which to engage in the crypto market either by "longing"(buying) or "shorting"(selling), technical analysis data is always available and at your disposal. So you don't need to wait for a certain time for news before engaging in the market.

Technical analysis, also comes in very very handy when we get to retail traders (short term traders). Due to the fact the some traders might not want to hold a trade for long but might want to engage short term and make some profits, technical analysis brings in that privilege to be able to engage in just a minute trade and make profits without getting to worry and holding for long.

With the use of technical analysis, you get to have a deeper and profound understanding of the market movements and simulations because you get to make use of resistance, support, mitigation points and many more critical points in the market that you won't have with any other method. Getting to buy and hold cryptocurrencies for long term, technical analysis keeps you in tune with the market and a sound and correct analysis can give you a good entry position in the market.

Components Of Technical Analysis.

Dealing with technical analysis, i have a practical knowledge of conducting technical analysis and it is the main method i use in trading be it cryptocurrencies or forex.

^{sample practical technical analysis with BTCUSD(Bitcoin vs US Dollars)}

Working with technical analysis, we take note of points in the market like:

Resistant points,

Support points,

Order blocks,

Mitigation blocks,

Imbalance and many others just to name a few.

Different components of technical analysis are:

Charts, which can be divided into;
- Line charts: which are often obtained by connecting the closing prices over a given period.
- Bar charts: which are obtained using the high, low, open and close price in a given period. They are also known as OHLC chart.
- Candlestick charts:This is again based on High, Low, Open and Close. However, it gives you a different visual, which resembles like a candle with color differentiating the low/high explicitly.
^source

Indicators:
Indicators that are used in technical analysis to identify momentum, trends, volatility and money flow of security. They are calculated using the price and volume details and often two or more indicators are combined with the price specific charts (line /bar/candle stick) to predictively take a decision on buy/sell/ hold. some of the indicator types include: trendlines, moving averages and momentum indicators such as the moving average convergence divergence (MACD) indicator. There are many indicators, but are widely divided into overlays and oscillators. ^source

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^{types of charts design by @codingherald source}

Technical Indicators

Like defined earlier, technical indicators are used in technical analysis to identify momentum, trends, volatility and money flow of security. Technical indicators, are also pattern-based signals produced by the price, volume, and/or open interest of a security or contract used by traders who follow technical analysis. There exist 2 main categories of indicators know as Overlays and Oscillators . Some examples of technical indicators are: Relative Strength Index (RSI), Money Flow Index (MFI), stochastics, moving average convergence divergence (MACD), and Bollinger Bands®.

Technical indicators are based on approximate calculations with respect to a certain characteristic for instance price, trading volume, investor sentiments, or open interest data. That's why each indicator is different from the other. So depending on your trading strategy, indicators might turn out to be quite effective or not useful all depending on your technical analysis strategy. So in summary, technical indicators and very good in cryptocurrency trading if you know how to read and understand them and will of no use of instead of negative impact if you don't have a good mastery of them.

As a trader, i don't make use of indicators in my technical analysis so coming into choosing my favorite i'll say i don't have a favorite indicator since i used non. Not withstanding, the different indicators react to the market with respect to a specific characteristic for instance the change in price, change in volume and many other characteristics depending on the indicator type.

IMPORTANCE OF TECHNICAL ANALYSIS

Technical analysis has a lot to play in the trading ecosystem and just as anything good has its own side effects if not used probably.

To start with, technical analysis gives you and in depth understanding of the market with the use of charts so you get to understand how to read charts and you also get to know the exact points and time in history when the market reacted positively or negatively.

Also, technical analysis gives retail traders the ability to do scraping(short term trading ) and you analyze your trade with respect the history trades.

In addition, technical analysis gives you and understanding of the demand and supply aspect of the trading and builds your capacity and ability to predict or simulate trades.

Moreover, technical analysis gives you choices in the market in which you're free to choose from your strategy to your triggers. So you analyze your market with respect to your triggers in the market or commonly known as "points of interest".

In as much as technical analysis has many advantages, it's main disadvantages can come when there is inappropriate knowledge. So as a technical analyst, you get to sometimes loose money while learning and trying to figure out your strategy and if you don't get to master a winning strategy, you might end up always making loses in the market. Another disadvantage of technical analysis will come when other methods like fundamental analysis and sentimental analysis are left out. This is because the market at times will react with respect to news and some circumstances which you won't find in technical analysis.

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^{cover design by @codingherald}

WORD/ADVICE

If i'm giving out a word or advice concerning technical analysis, i'll start by start first of all technical analysis is a very good crypto trading method as it helps you understand some in depths and reasons why the market will react the way it does.

Secondly, i'll say go for what works for you. There are profitable traders who trade only fundamentals others that trade only technical analysis and are still profitable so what works for one person might not work for another but the best thing to do is learn it, master, trying and leave it only when it doesn't work for you.

Thirdly what'll say about technical analysis for someone wishing to learn it is get a good mentor(which is very important). This is because technical analysis can be very frustrating is you lack adequate knowledge and lastly as advice i'll say go for knowledge first before getting to do anything.

Hope this writeup was helpful or resourceful to someone.
Thanks for reading.

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rafk (68) · 2 years ago

Greetings my friend..

Happy to be reading from your entry..

You have made a great review on technical analysis and it's great.

Secondly, i'll say go for what works for you.

This is so true as most people get to use indicators in the market analysis. It's advisable to get verse with this tools before using them...

Your entry is great and I recommend you to go for short paragraph and more point form to ease reading...

Together your journey on steem is success.

$0.00

codingherald (59) · 2 years ago

ok thanks a lot for the remark bro

bongk (67) · 2 years ago

Amazing post on technical analysis bro I like how you explained each point, I wish you luck in the contest bro.

thanks bro🙏🙏

starrchris (74) · 2 years ago

Plagiarism my friend is so so improper please stop it, try been unique and creative, because you can do it

Steemit Crypto Academy Contest / S4W1 - Crypto Market Technical Analysis by @codingherald