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

Hello lovely people, I trust all is well with you. This happens to be the first week of the Steemit engagement challenge, and here is my presentation on the topic Crypto Market Technical Analysis. Hope you enjoy 😉

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How would you define Technical Analysis in the Crypto ecosystem? Mention its Importance.

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Technical analysis in the crypto space can be viewed as the crucial process of analyzing or interpreting the historical and current price movements of an asset to forecast its future price, in order to make good trading decisions with profitable outcomes.

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This helps traders to plan on the underlying token to be traded by utilizing appropriate technical analysis tools, research, risk management as well as considering market speculations, in order to succeed with one's trade and prevent or manage losses.

There are technical analysis tools search as, trendlines, moving averages, RSI and chart patterns which aid traders to make better trading decisions, but first traders need to learn more about how each of them work before their application.

Importance of Technical Analysis

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There are several positive aspects of technical analysis which makes it very relevant in the crypto space.
As said earlier, it guides traders on which asset to trade, when to trade and the type of order to be initiated.
Notwithstanding the fact that it significantly helps in risk management and profit accumulation, therefore very relevant.

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Do you have practical knowledge of how to conduct technical analysis? Highlight some of the components of Technical analysis.

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Yes, with the help of Crypto Academy and some personal research, I have the practical knowledge with regards to conducting technical analysis.

Some Components of Technical Analysis

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• Technical Indicators such as MA, RSI, Parabolic Sar etc.

• Speculations (Fear and Greed Index)

• Chart patterns

• Market trends

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What do you understand by technical indicators? Do you consider them effective for trading cryptocurrency? Which one is your favorite and how does it work? (Screenshots required where necessary)

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Technical indicators are technical analysis tools which are used on charts in trading to get the best out of the market.
Example; Relatively Strength Index, Moving Averages, Bollinger bands, Average True Range etc.

Of course, I consider them effective in terms of cryptocurrency trading and my favorite of all is the Moving Average.

Moving Average is a leading indicator which encompasses of periodic average price points.
When price moves above its line, it signals a bullish trend, whiles a movement below it showcases a bearish trend.

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The above SAND/USDT pair chart is a sell trade setup initiated using a 9-day moving average.

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Highlight the advantages and disadvantages of technical analysis. What's your advice to anyone about it?

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Here comes some good sides as well as negative aspects of technical analysis.

Merits of Technical Analysis

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• It increases the chances of trading success. Proper technical analysis increases traders level of making profits.

• Technical analysis tools are easy to come by. The tools normally come at no cost and they are available on many trading platforms.

• It aids in predicting future market prices. Considering the historical price movements helps traders to anticipate on the future prices.

• Technical analysis gives traders some level of confidence in their trading activities.

Demerits of Technical Analysis

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• It not 100% reliable. The fact that it help in making better trading decisions doesn't guarantee it as being perfect. In fact, technical analysis can sometimes mislead traders of which they will incur some level of losses.

• Rookies of the crypto space may find it difficulty to initiate better analysis, since it requires some level of competency, in terms of gathering information and making appropriate utilization of the technical analysis tools.

• It delays trading decisions; this is because there have to be background checks of markets and prices which is time consuming and sometimes stressful.

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My Advice to Anyone About Technical Analysis.

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With no reproach, I think technical analysis is very essential in trading because it gives traders confidence and help predict future prices which usually comes to pass, therefore it should be embraced.
With regards to the technical analysis, I will recommend the confluence method of trading in order to boost our chances of trading success, since the utilization of a single tool is highly unreliable.
Also, beginners should learn more about technical analysis so that they can make good use of it and gain some level of expertise, confidence and profits in trading.

After technical analysis, never leave the concept of risk management behind in your trading activities, so in case things do not go as expected from the analysis your losses will be minimal.

Conclusion

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Technical analysis is a vital instrument when it comes to trading, therefore it shouldn't be looked down upon.
Learn and get acquainted with the proper technical analysis approach to increase your profit level.

Thank you and stay blessed 😊