Chart analysis

[Nisharawal]

Hello to everybody,

I have question about chart analysis. Are there any differences betwen chart analysis in traditional stock exchange and crypto exchange?  Considering that the crypto exchange is much more emotional in decision making? Can we use exactly the same analysis techniques or do we have to adjust them to our crypto reality? If yes, please give me some tips what I have to change that the analysis would be more accurate. 

Good question my friend, well to be honest i don't think that there is any big difference between crypto charts and stock charts. All the major  trending pattern, Chart patterns and other technical strategies works similar way to stock trading. The only difference is that crypto charts looks messy due to big price spike due to big volume and big volatility on single days. You can use the same chart analysis techniques on crypto trading which you are using on stock market, but make sure that breakouts and reversal pattern have good supporting volume for confirmation.

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[hahahafr]

They both are the same, you can compare them both, and you will notice that they have the same patterns in every situation, and you can compare all the patterns if you use bollinger bands, you will see that when a bearish trend is aproaching, all the signals are the same, and it applies to bullish trends too.
So there is nothing new with chart analysis, and if you are good at this, you will be a very good trader, in forex, stocks, and in altcoins too.

[Raistlinnn]

Theoretically, is it possible to be successful in short time traiding using only technical analysis, or is it impossible without fundamental analysis?

[amaral1977]

Hello to everybody,

I have question about chart analysis. Are there any differences betwen chart analysis in traditional stock exchange and crypto exchange?  Considering that the crypto exchange is much more emotional in decision making? Can we use exactly the same analysis techniques or do we have to adjust them to our crypto reality? If yes, please give me some tips what I have to change that the analysis would be more accurate. 

 

You can use the same tech indicators. However remember two very important points. Technical indicators are used considering the market history repeats itself. For cryptos there isn´t a good established history. Point nr 2 is that tech indicators are best when you have high volume and most altcoins are low volume. So technical analysis would work better on BTC trading against USDT because it has the longer history and high volume.

It can be used in other coins, but be prepared for losses.
Have fun:) and don´t be to emotional!

[TheQuin]

It is a straight candlestick, same as when used in NASDAQ. A candlestick confuses people because it is displaying. more information than the axis's normally would. Like 3 pieces of info displayed on a 2 axis grid. The main difference between the stocks and crypto is the fact that most of the crypto moves are based on total BS and rumors, feelings and just guessing, while at least a good part of the stock market trading is based on real world changes.

A candlestick is actually displaying four pieces of information and has become much more commonly used than it's predecessor the OHLC bar. As the name indicates it shows the Open, High, Low and Close of each time period. The candlestick only varies in that rather than a tick for the low and high it colours in the body of the candle. There was a guy called Steve Nison who got very rich from marketing the idea he took from an ancient Japanese rice trader.

[karmamiu]

                           I think both of them are likely the same as they have the same patterns and candle sticks that needs to be studied carefully, but as for my own point of view, neither of the two can be profitable as long as you are well experienced  and has a lot of knowledge about studying charts, and as for my opinion also, because of the unstable prices and volatility of the bitcoin's market it would be hard to just study the chart alone.

[aencarnaci]

I have a hard time analyzing charts in this industrt. In which I have noticed that traditional stock market and market cryptocurrencies is a bit different due to the high volality of market. In a period of time, it determines changes in prices as we can see are the waves. In which it is not observe on the other. Understanding charts are very important to know and obtain good income with investments. High volatility is always accompanied by high risks. Technical analysis is needed to predict the movement of values and reduce as possible.

Chart analysis is no doubt very much important thing especially for a trader. It carries a very significant role and it demands a very high level of precision and accuracy. The fact is no matter how much educated you are, you can never trust on your analysis as you never know what will happen in the coming days. Yet it can help you a lot in making better and wise decisions.

[gabmen]

                           I think both of them are likely the same as they have the same patterns and candle sticks that needs to be studied carefully, but as for my own point of view, neither of the two can be profitable as long as you are well experienced  and has a lot of knowledge about studying charts, and as for my opinion also, because of the unstable prices and volatility of the bitcoin's market it would be hard to just study the chart alone.

Right. If you've been dealing with stocks before entring crypto trading then you'll pretty much have a better picture of how to read the charts. Personally, i sometimes rely ok gut feel whenever i read the candlesticks to know mostly the time for entry.

[Vannie12]

I am starting to read charts because I want to start trading soon. There is a little difference between chart in traditional stock exchange and crypto exchange, the details are very important to consider. But when it come to techniques, better learning there differences too for easy adaptation.

[Anthonyxx]

Hello to everybody,

I have question about chart analysis. Are there any differences betwen chart analysis in traditional stock exchange and crypto exchange?  Considering that the crypto exchange is much more emotional in decision making? Can we use exactly the same analysis techniques or do we have to adjust them to our crypto reality? If yes, please give me some tips what I have to change that the analysis would be more accurate. 

 

Technical analysis is a great thing,but I would recommend it in two conditions.
The first one is you already have experience in trading,do not expect to be any easier for bitcoin charts + always parallely follow the news and updates.
The second is do not use it for altcoins.The market is way to volatile and often artificially pumped by the coin holder,
likely various youtubers etc.,and when they sell it the price dumps,making any technical analysis useless.
There are some hilarious examples,just look at the ChainCoin chart,beware of things like that.

[Swinging Phallus]

Hello to everybody,

I have question about chart analysis. Are there any differences betwen chart analysis in traditional stock exchange and crypto exchange?  Considering that the crypto exchange is much more emotional in decision making? Can we use exactly the same analysis techniques or do we have to adjust them to our crypto reality? If yes, please give me some tips what I have to change that the analysis would be more accurate. 

 

Technical analysis is a great thing,but I would recommend it in two conditions.
The first one is you already have experience in trading,do not expect to be any easier for bitcoin charts + always parallely follow the news and updates.
The second is do not use it for altcoins.The market is way to volatile and often artificially pumped by the coin holder,
likely various youtubers etc.,and when they sell it the price dumps,making any technical analysis useless.
There are some hilarious examples,just look at the ChainCoin chart,beware of things like that.

Yeah, this is very true. Alt coins are incredibly more volatile, I remember the massive dump that happened with ETH when the fake rumors of vitalik's death were everywhere. BTC has solidarity because the founder(s?) are anonymous and they are irrelevant since the protocol established it's own legitimacy. Eventually though we might see more psychological analysis in play for these markets once the playing fields are leveled but that may be a while.

[imyashir]

Hello to everybody,

I have question about chart analysis. Are there any differences betwen chart analysis in traditional stock exchange and crypto exchange?  Considering that the crypto exchange is much more emotional in decision making? Can we use exactly the same analysis techniques or do we have to adjust them to our crypto reality? If yes, please give me some tips what I have to change that the analysis would be more accurate. 

 

the crypto exchange is lot emotional because the crypto market is a faster than a stock exchange market. Here in the crypto market is easy to get a money if u have an idea about the trading analysis if u are a trader in stock is a same charting like candles stick. If u want to earn in trading just u need collect first knowledge before you enter in the market for u know what will u do in a crypro exchanger..

[TheQuin]

the crypto exchange is lot emotional because the crypto market is a faster than a stock exchange market. Here in the crypto market is easy to get a money if u have an idea about the trading analysis if u are a trader in stock is a same charting like candles stick. If u want to earn in trading just u need collect first knowledge before you enter in the market for u know what will u do in a crypro exchanger..

It really is not. The stock markets are dominated by high-frequency trading algorithms running on custom-made machines with built with FPGAs colocated in the exchanges. There a are some trading bots being used on crypto but they are much slower because of the latency caused by internet connections. Your chances of success are far higher in crypto trading due to the absence of these HF alogos.

[Nonakryse]

the technical indicators are pretty much the same as the traditional one's. The thing about the crypto market is that it's so much more volatile than traditional markets, by volatile I mean that the price increases or decreases way more than traditional instruments. For example the S&P index fluctuates around 0-2% max a day, while BTC can go anywhere from +/- 20%, which is quite insane. When comparing the technical indicators though they are quite similar with what you'd expect in the FX market. And on another note, the crypto space is much easier to be manipulated. There are people pumping as you might have heard, which doesn't really happen often in traditional markets, so you are more likely to get "played out"

[barabut]

Hello to everybody,

I have question about chart analysis. Are there any differences betwen chart analysis in traditional stock exchange and crypto exchange?  Considering that the crypto exchange is much more emotional in decision making? Can we use exactly the same analysis techniques or do we have to adjust them to our crypto reality? If yes, please give me some tips what I have to change that the analysis would be more accurate. 

 

Regular technical analysis tools would be helpful to support the decision in some certain point but it has to be studied in detail.

[dklodner]

It is a straight candlestick, same as when used in NASDAQ. A candlestick confuses people because it is displaying. more information than the axis's normally would. Like 3 pieces of info displayed on a 2 axis grid. The main difference between the stocks and crypto is the fact that most of the crypto moves are based on total BS and rumors, feelings and just guessing, while at least a good part of the stock market trading is based on real world changes.

A candlestick is actually displaying four pieces of information and has become much more commonly used than it's predecessor the OHLC bar. As the name indicates it shows the Open, High, Low and Close of each time period. The candlestick only varies in that rather than a tick for the low and high it colours in the body of the candle. There was a guy called Steve Nison who got very rich from marketing the idea he took from an ancient Japanese rice trader.

Would you like to try something more accurate? It's an experiment I finished few days back. It's a visualization of trading history, you can view it in cumulative or buy\sell view mode therefore you are able to see where and how much was traded. Also try to turn on "order book". It's a heatmap of orderbook, awesome way to see support and resistence.

https://cointerminal.io/heatmap

I am still working on better introduction since this concept of charting is very exotic.

[guoyu78]

Hello to everybody,

I have question about chart analysis. Are there any differences betwen chart analysis in traditional stock exchange and crypto exchange?  Considering that the crypto exchange is much more emotional in decision making? Can we use exactly the same analysis techniques or do we have to adjust them to our crypto reality? If yes, please give me some tips what I have to change that the analysis would be more accurate. 

 

Technical analysis is a great thing,but I would recommend it in two conditions.
The first one is you already have experience in trading,do not expect to be any easier for bitcoin charts + always parallely follow the news and updates.
The second is do not use it for altcoins.The market is way to volatile and often artificially pumped by the coin holder,
likely various youtubers etc.,and when they sell it the price dumps,making any technical analysis useless.
There are some hilarious examples,just look at the ChainCoin chart,beware of things like that.

Indeed trading requires a decent experience in order to perform great in this field. No technical analysis is useful for you until and unless you yourself have been through that situation in trading. The only analysis you need to trust is your own research and experience.

There is no doubt that crypto market is highly volatile and this is the real beauty of this market. Volatility is good for investors.

[TheQuin]

Would you like to try something more accurate? It's an experiment I finished few days back. It's a visualization of trading history, you can view it in cumulative or buy\sell view mode therefore you are able to see where and how much was traded. Also try to turn on "order book". It's a heatmap of orderbook, awesome way to see support and resistence.

https://cointerminal.io/heatmap

I am still working on better introduction since this concept of charting is very exotic.

No, I wouldn't. Heatmaps, Heikin Ashi, Renko... etc. It's all nonsense really. None of them can be described as more accurate as they are just different visualisations of the same data. A lot of people got very rich selling the latest, greatest charting method and fancy indicators. If you have the chance to visit a professional trading firm you'll notice that none of them actually look at charts while they are trading.
I only use charts to determine support and resistance levels i.e. where did the market turn round last time. That doesn't mean it will again this time but I know it's an area that all pro-traders will be watching. Then I just watch order flow to decide if the level will hold or they're going to smash it for stops. That actually is all trading is.

[dklodner]

Would you like to try something more accurate? It's an experiment I finished few days back. It's a visualization of trading history, you can view it in cumulative or buy\sell view mode therefore you are able to see where and how much was traded. Also try to turn on "order book". It's a heatmap of orderbook, awesome way to see support and resistence.

https://cointerminal.io/heatmap

I am still working on better introduction since this concept of charting is very exotic.

No, I wouldn't. Heatmaps, Heikin Ashi, Renko... etc. It's all nonsense really. None of them can be described as more accurate as they are just different visualisations of the same data. A lot of people got very rich selling the latest, greatest charting method and fancy indicators. If you have the chance to visit a professional trading firm you'll notice that none of them actually look at charts while they are trading.
I only use charts to determine support and resistance levels i.e. where did the market turn round last time. That doesn't mean it will again this time but I know it's an area that all pro-traders will be watching. Then I just watch order flow to decide if the level will hold or they're going to smash it for stops. That actually is all trading is.

Thanks for your opinion. I agree with you about Heikin Ashi and Renko. It was just a request from few users. Also I am not selling anything and I have no plans to monetize that in the near future. I just wanted to share my experiment.

I am open to discussion about heatmaps though. You've said yourself, watching order flow is important to determine if the support/resistance will hold. I might be biased but heatmaps have proved itself very useful in this regard (for me). Support and resistance is so easily visible from order book heatmap and the overall ratio of trading history heatmap can determine trend strenght better than ADx or whatever momentum indicators I tried to use.

It's true I am not a professional trader so I would appreciate some pointers to sources about pro trading and better trading methods based on your trading experience.

P.S. Heikin Ashi/ Renko are to my knowledge based on OHLCV data, Heatmaps on the other hand rely on trading history and order book snapshots. Am I missing something?

[TheQuin]

Thanks for your opinion. I agree with you about Heikin Ashi and Renko. It was just a request from few users. Also I am not selling anything and I have no plans to monetize that in the near future. I just wanted to share my experiment.

I am open to discussion about heatmaps though. You've said yourself, watching order flow is important to determine if the support/resistance will hold. I might be biased but heatmaps have proved itself very useful in this regard (for me). Support and resistance is so easily visible from order book heatmap and the overall ratio of trading history heatmap can determine trend strenght better than ADx or whatever momentum indicators I tried to use.

It's true I am not a professional trader so I would appreciate some pointers to sources about pro trading and better trading methods based on your trading experience.

P.S. Heikin Ashi/ Renko are to my knowledge based on OHLCV data, Heatmaps on the other hand rely on trading history and order book snapshots. Am I missing something?

That's Ok, I wasn't thinking you selling anything. I have experience from many years in investment banks and know some professional traders in prop shops. Every single one of them trades purely from a Depth of Market. That shows bids, asks, volume at price and cumulative trades at the current price. They only use charts to make a note of possible support and resistance areas first thing in the morning before they start.

Heatmaps are just the latest in a long line of snake oil being sold to retail traders. How can knowing where there were some orders that got pulled previously were help you? The only thing that matters is what is happening right now. Are orders getting filled or being pulled, are there icebergs producing orders as fast as the ones you are seeing being filled. These are the only things that will tell you what is happening now so you can make a good guess what will happen next.

If you want to see how pro traders do it I think you can find youtube videos by a guy called John Grady who is about the only trading educator I know of with prop trading experience and who is an actually profitable trader. (I'm not recommending any of his services, I haven't tried them, I'm just pointing out the videos show what a pro is actually looking at).

Also if you want to have a go yourself you can sign up for a free demo account at Trading Technologies (trade.tt). It's the software the vast majority use. The demo is 10 minute delayed data from the CME and CBOT, but you can pretend it's live.