What is technical analysis?

The basic premise of Technical Analysis (TA): Analyzing a securities past price movements can help predict future direction. One must understand that technical analysis is more of an art than a science. In crypto, TA has become a self fulfilling prophecy as many day traders like myself look to certain levels be it fibs, EMAs, ichi levels etc to time our entries/exits/projections. This fact coupled with cryptos’ inherent volatility makes it a forex traders paradise as you can do quite well trading charts alone and discounting fundamentals.

However, as a long time student of FX I’ve always held that market analysis is a three pronged stool comprised of technical analysis, fundamental analysis, and sentiment analysis. All of these factors need to be taken into account in order to be consistently profitable. Avoiding one or two of the prongs threatens the stability of the stool; therefore, while you may sit upright for a period on TA alone, your best bet is to have all three prongs safely planted. This is one of the big reasons I always look at fundamentals and sentiment before checking any charts. The real hidden gems come out when you take the underlying fundamentals, combine it with consumer sentiment, and then verify these findings with technical analysis.

Didn’t understand half of the terms I mentioned above? Don’t sweat it.

Welcome to TA 101

Not ready to post just yet?

We recommend you watch this first before doing anything else:

Wasn’t that exciting!? While learning the basics of TA are not the sexiest aspect for aspiring traders, it is of paramount importance that you master the underlying principles before moving on to harder topics.

Think you understand trend lines, moving averages, or volume?

Post your own TA below so we can see how you did!

Stay tuned for our next post as we look to explore our Captain’s favorite indicator — The Ichimoku Cloud

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