Value of technical analysis vs sentiment for you

[alani123]

Does technical analysis by others hold any weight for you when you're trading? This is something I've been meaning to get the thoughts of people in a while but I was afraid the overwhelming optimism would have drowned out impartial opinions.

In my view, technical analysis isn't much more than looking at charts and drawing lines. So called analysis that focus on bitcoin markets tend to completely overlook factors such as volumes even. The half-trolling "wall observer" thread in bitcoin talk seems to me like a better observer of bitcoin prices other than any of the well know technical analysts that focus on charts. This whole "science of charts" seems to have very negligible predictive ability if we're going to consider the ones that are public at least.

One thing that to me appears to have an impact on bitcoin markets is the sentiment. Which is something notoriously hard to measure. And not to forget, there's now academic bibliography that supports BTC has low correlation tor real world markets, but very high correlation among other cryptos.

[ice098]

Does technical analysis by others hold any weight for you when you're trading? This is something I've been meaning to get the thoughts of people in a while but I was afraid the overwhelming optimism would have drowned out impartial opinions.

In my view, technical analysis isn't much more than looking at charts and drawing lines. So called analysis that focus on bitcoin markets tend to completely overlook factors such as volumes even. The half-trolling "wall observer" thread in bitcoin talk seems to me like a better observer of bitcoin prices other than any of the well know technical analysts that focus on charts. This whole "science of charts" seems to have very negligible predictive ability if we're going to consider the ones that are public at least.

One thing that to me appears to have an impact on bitcoin markets is the sentiment. Which is something notoriously hard to measure. And not to forget, there's now academic bibliography that supports BTC has low correlation tor real world markets, but very high correlation among other cryptos.

In general idea, emotions will affect every holders decision making once bitcoin price fluctuates unpredictably. Compared with other crypto, bitcoin had establish a strong momentum even if some declined value took over dominance. Unlike altcoins, the price benchmarked at certain value and won't fall very cheap.
Charts do help us analyze more better, but you should also consider other factors like FUD and other minor problems that affected every specific price updates.

[Harlot]

In my view, technical analysis isn't much more than looking at charts and drawing lines. So called analysis that focus on bitcoin markets tend to completely overlook factors such as volumes even.

Let simply put it this way, technical analysis have existed for a long time to be deemed useless. It won't be used in the stock market and the forex if it doesn't hit any kind of price forecasting done by their own TA, but since it has been effective for them it still managed to be learned and be used frequently in these markets for several years now. Yeah sure if you look at these charts you will only see the lines being drawn and the bars it will be showing, but what makes it useful is how an analyst can translate these charts on where the asset will be heading or has the highest chance to go. I do look at the TAs of other people especially in Tradingview but I don't instantly believe what they are trying to say but what I do is to try to validate it on my own with my analysis. With this thing I can also learn on my own and see if what they are trying to say is accurate or not.

[exstasie]

Does technical analysis by others hold any weight for you when you're trading?

Yeah. I follow dozens of other traders, partly for fresh ideas that challenge my biases, and partly to measure trader sentiment. When most traders are all leaning one direction (either bullish or bearish) it usually means they are piled on the wrong side of the market. Short vs. long and open interest data can contribute to this sentiment analysis too.

In my view, technical analysis isn't much more than looking at charts and drawing lines. So called analysis that focus on bitcoin markets tend to completely overlook factors such as volumes even.

There are no perfect methods to price analysis, whether fundamental or technical. TA when properly used should give you an edge against the market. It doesn't equate to printing money.

Volume is a crucial part of my TA. High volume usually signals exhaustion at S/R and price extremes. It also tends to confirm dominant price direction in newly established trends.

The half-trolling "wall observer" thread in bitcoin talk seems to me like a better observer of bitcoin prices other than any of the well know technical analysts that focus on charts. This whole "science of charts" seems to have very negligible predictive ability if we're going to consider the ones that are public at least.

The WO thread is another useful source of sentiment data. It's no surprise they were mostly bearish a week ago.

I've seen many BTC analysts come and go over the years. Skilled technicians who offer consistently valuable insight are few and far between, but they are out there.

[Kelvinid]

Technical analysis places a very important role when you are trading. That is why traders would like to know how to read charts in order to have a good market analysis know the fact that this could help them to a projectile motion of the trend even though it all been unpredictable and yet, it is really effective. But if we are going to trade with our own analysis, by our emotions/sentiments it is better not to do this, we don't have a future of doing instead, it makes us fall and losses our funds.

[adaseb]

Technical analysis works maybe at best 20% of the time. You can't rely on it alone. Basically the best way to use technical analysis is if you are in a strong trend. So in 2017 you should of only took LONG positions in Bitcoin and after it broke support in Nov 2018 you should of only took SHORT positions in Bitcoin.

Use technical analysis but only if you have a good risk/reward. If there is major resistance $300 away and you are risking $100 then its a safe trade. Don't take trades where you are risking $1 for $1 because when you account for spread, fees, user errors its almost impossible to make money that way.

Most whales risk $100 but their take profit is >$500 or so. That way they don't need to be correct as much and still earn a profit.

[igglyboo92]

The half-trolling "wall observer" thread in bitcoin talk seems to me like a better observer of bitcoin prices other than any of the well know technical analysts that focus on charts.

What do you mean by that, "a better observer of bitcoin prices"? The posters in the wall observer thread are good at making price predictions??

[pooya87]

Does technical analysis by others hold any weight for you when you're trading?

by "others"? absolutely not.
in 99% of the cases that i have seen those who are doing technical analysis know any more than a 6 year old drawing on the charts. sometimes it is so bad that the lines they draw is completely random because they wanted to make a conclusion (eg. say a certain higher or lower price is possible) then they drew the line so that it passes their desired price!
apart from that TA is not completely reliable itself either. that is why many experts refer to it as "Pseudoscience" and don't believe in it at all.

[The Cryptovator]

I won't trust technical analysis others because some analyzers analyse based on chart, but it doesn't mean bitcoin will follow it. For me more important is trends or sentiments. How it will be if you combine technical analysis and sentiments? I think most of predictors are giving prediction by combining technical analysis and sentiments. I think like buy pressure/sell pressure is belongs to technical analysis. This pressure actually effect on bitcoin price. So combine both of them would be nice prediction.

[davis196]

If I had to choose between someone's technical analysis and sentiment,I would choose sentiment(even if it's partially wrong). In my opinion,technical analysis is exactly what you describe-reading charts and drawing lines without any real meaning,most of the time. It's an important part of every crypto trader's arsenal,but it shouldn't be combined with fundamental analysis+trading signals.Just relying on technical analysis simply doesn't work.

[bgaf]

Technical analyses is one of the best method when youre trading. Some says its only pattern or draw lines but the truth is it is helpful. Yeah most of the time its not accurate but if you learn it and become used to it. That can help you understand how the market for different coin will move. O have a lots of friends that knows how to deal with it. Fundamental is one way or another story. Its effective also when whales are manipulating it and some are riding with this and win huge gains. Timing is the important part but of course we cant know when to buy and sell unless news came and we already know it before it got release. Vice versa with the technical analysis which uses charts.

[beerlover]

When you want to buy oranges, do you value apples more or watermelons more? This is literally like that. If the only thing you are looking for is a quick short term profit, sentiment and TA has both failed people over and over again. TA offers a realistic approach that may work and that is why many people use it since it could at least tell you what bitcoin "should" do and many people care about it, of course bitcoin rarely ever does anything it should do but only does what it wants to do. However, sentiment is rarely right as well so that doesn't work neither.

So, it is totally useless to rely on both of them. What can only work is the idea that bitcoin is a long term profit machine that you can buy and forget for 5 years and comeback to make a lot of money, if you can wait that long and can afford to get some now, that would be the best investment you made, however if you can't, there is no right way to make a short term trade on bitcoin.

[Emperor of Man]

They're both methods of market analysis, trying to approach the market from different angles. Sentiment analysis (or the so called contrary opinion) actually has been considered one of the methods of technical analysis by many.

None of them works perfectly and you have to consider all of those methods together, but if I am to choose between them, chart analysis usually works better.

About trusting other people's analyses, I'd say most of them are not that trustworthy. There are lots and lots of charts here and there, which are trying to convince you to buy/sell crypto X or Y so that they can manipulate the price and enter/exit with better prices themselves. But every now and then you'll find someone who's both honest and good at market analysis at the same time. They are rare, but stick to them when you find them. 

[Hypnosis00]

Sentiment analysis and market view are not really working in trading. Quite more had suffered losses than achieving their goals. Unlikely, if we do the analysis that has a basis of it and that is reading into the chart. If we want to succeed in trading, we better use Technical analysis. Yes, sentiment analysis could also be applied but in moderation and we should have to consider most coming from technical basis otherwise, we end up nothing.

[hugeblack]

Does it help you in making a decision? Yes, definitely. Is it the only or influential measure in decision-making? of course not.

Technical analyzes measure how the market moves when there are not many factors influencing "the natural situation" so it will be good at predicting patterns of future change and how to profit when the price is changing and not under the influence of some external factors.
Maybe it is good for day trading or short term investment plans.

Building an investment plan in the medium and long term depends on a personal analysis of the market and a more detailed reading of the market progress.

[STT]

You are being too narrow in your definitions perhaps.  TA includes volume certainly, its very relevant to notice where a large amount of orders may exist and have executed previously.   I would even say TA serves the purpose of predicting higher volume areas, it cannot say for sure if the volume will be in resistance or not but it can say if a 'fight' is probable vs clear sky.


Sentiment is important, these two things dont oppose each other.   Pretty much everything real should be reflected somewhere on the chart in some way.

[sheenshane]

Any analysis won't give you accurate forecasting in trading volume resistance but if I'm going to choose the technical analysis over sentiment analysis. I prefer the TA. Yes, probably most traders are using this now, a simple drawing in a few lines on the chart price and now you have your own TA.

TBH, I'm not relying on this TA. Instead, much better is to develop your trading strategy and skill. Because sometimes we lose on trading because of our greed. Don't aim too much high percentage of profit, I prefer to gain profit even 1% but it is continuously gaining. Conservative in trading sometimes is a must.

Sentiment analysis? That is NOT needed, IMO.

[Yatsan]

It depends on how people view the TA's of others. If they understood the concept/idea of the TA's done, and somehow after reading/viewing it came up with the same conclusion, wouldn't it be right to agree or let it influence you? Of course, understanding it and letting yourself go with the flow are two different things. As for sentiments, well, it's just like gambling. Sentiments could somehow destroy or bless you, but it entirely depends upon luck and well, in either cases, the only thing to blame would be yourself. Still, in a sense, TA's can be actually affected by sentiments itself, just that TA's look more factual and informative thereby making it more persuasive, compared to sentiments anyway.

[FanEagle]

Long term and short term difference. If you want to buy something for long term of couple of years or even decades, that means sentiment is a lot more important because there is literally no chart that can help you with decades long investment and it would be totally unreliable and unrealistic difference.

However, if you want a short term either day trading or maybe at maximum one week, that is definitely for technical analysis since sentiment can't really predict a 5 day thing or day trading thing, if you put emotions into day trading you can never know what you are doing because you are going in blind without knowing whats going on, which is why many people buy while price going up and that is why they lose, you should not buy when its going up, you should buy when it is at the bottom.

[TheGreatPython]

If we want to separate the two that is fine, however do we really have to separate them? Isn't the humans with emotions and sentiments that are building the technical analysis as well. If you ask me when a person wants to look at something positive on TA they have all the tools in their power to build something like that.

If they want to look at charts that looks promising they can find indicators and stuff that will make it look like bitcoin is going up, if they feel like bitcoin will go down they will find stuff that will make it look like it will go down. I have seen two different charts on the same day that showed different directions all because it used different timelines and different indicators, so it is possible. TA is not really that further away from sentiment.