Trading is a very demanding and tasking activity. Whether you are trading Digital currencies, national currencies, shares, bonds, stocks. It requires knowledge of that market, and available data and how to utilize information to make correct speculations on future price.
What is technical analysis? Technical analysis is trading technique which relies on market actions to predict future market movements.
It relies on combination of factors like, charts, market value, market history, trading volume, and trends.
Basically, technical analysis means using the past to predict the future.
Foundamental analysis is also a trading strategy which relies on project foundamentals, developmental stage, upcoming news and updates, and major annoncements and how this factors impact the market, and attempts to predict the reaction.
When using technical analysis to attempt to speculate on the market, there are key points to consider;
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Charts and Trends: Charts show the market movements. You can set it to your desired time frame, 24 hours, a week etc. You'd need to do more research on this to learn how to properly read charts and use it to predict the market.
Trends shows the market reaction at key points in time. For example, the cryptocurrency market is believed to drop when most traders go for summer vacations during August and the rise when they return around late September. With this you can speculate on how the market would react at specific points in time and to specific events.
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Support and Ressistance : Support in a chart is that point during a dip, where the value doesn't drop lower but rather holds and possibly bounces back. It's mostly caused by my traders who buy at the dip and supports the value.
The ressistance on the other hand is that point in a rise where the value doesn't go higher buy rather holds or drops. It's at this point most of the traders who bought lower down sell of to the late followers and dumps on them. The heavy supply could cause a sharp drop.
With knowledge of this you can predict the price movements at specific points in the chart.
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Moving Average : This is also a very important factor to consider. Moving average is similar to a chart, but it shows the average of the market ride or drop over a longer time, a week or a month. It is the average of the daily closing value over a specific time. I t gives a broader view of the market
They are of two types,
1. Simple Moving Average
2. Exponential Moving Average.
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Trading volume: Trading volume is the amount in circulation in the market. The trading volume gives you an idea of the level of rise the market can support or drops it can withstand.
A large trading volume indicates a stable market which can resist manipulations. A low trading volume is a market which is largely unstable and very subsceptible to market forces and manipulations.
Technical analysis is a very broad subject, and it is invaluable to a trader in his/her quest to be successful.
Dow theory provides a lot of useful knowledge and information in trading
https://en.m.wikipedia.org/wiki/Dow_theoryGood luck
