What are important considerations while making technical analysis of cryptocurrencies?

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Assalamualaikum steemians

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How are you? Hope so everyone would be safe and sound just like me as I am also safe Alhamdulillah...

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Technical analysis is my today topic that I am going to share with all of you because I know that these are the type of an analysis that are very important to understand if you are dealing with currency so I think everyone who is working at this platform is involved in definitely trade of currency that's why they should know important consideration while making any technical analysis.

In brief way technical analysis is all about chartist analysis which is used for make short time investment decisions in which you deal with current market conditions with the help of different charts and graphical data so my major purpose would be to highlight important considerations when you are making technical analysis.

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These are some of the important considerations that we should keep in mind while making technical analysis I am going to explain them briefly.

Price Patterns

There are some particular price patterns like support and resistant levels and chart patterns like triangles or Head and shoulder pattern and all these are studied under the category of technical analysis so these patterns are very helpful in providing information related to future price movements.

Indicators

When I talk about technical analyst that are expert in making technical analysis then there are large number of indicators like moving average relative strength index and moving average convergence divergence that are used by analyst for the identification of trends that are going on as well as momentum and entry and exit points of particular currencies.

Volume Analysis

Volume analysis is another important consideration when you are making technical analysis because by analyzation of trading volume you can determine that it is the strength and weakness of price move so validity of trend can be confirmed by high volume during upward trend or during downward trend.

Fibonacci Retracement

Fibonacci retracement is another one of the most important tool which is very useful in identification of support and resistance levels based or depending upon the Fibonacci sequence. Traders and different investors have strong believe that these are the levels that could act as turning points for the movements of price of particular cryptocurrency.

Candlestick Patterns

Candlestick patterns is another one of the most important consideration when you are going to make technical analysis so there are some of the specific candlestick pattrens about which different analyst are looking and these patterns are doji,hammer or some other patterns and these all are used for predicting reversal and continuations in future.

Timeframes

By use of time frames like daily,hourly or even minutes charts aur helpful in analysing cryptocurrencies by traders because there are different perspective of different price movements at different time frames.

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Market Sentiment

Market sentiment is also one of the most important consideration when you are going to make technical analysis because if market sentiment is positive then it means that overall price would pump and if market sentiment is negative then overall price would go in decline.

Risk Management

Risk management is also very important by the use of technical analysis because these are not full proof and we know very well that these are just predictions so there could be different techniques like setting stop loss orders for limiting significant losses and all these are used by traders that Know trading very well.

That was all about my topic that I have shared with all of you and I tried my best to share different important considerations regarding technical analysis very clear to understand to all of you.

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Thanks

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