How To Identify Market Trends With Technical Analysis

how to identify market trends with technical analysis

The world of cryptocurrency and block chain is a vast landscape and in quick evolution, in which quick price movements can be exciting and intimidating for investors. One way to move around these markets and make informed investment decisions is the use of technical analysis, a fundamental tool used in the field of finance and economy. In this article, we will deepen the basic concepts of technical analysis and provide valuable advice on identification of market trends using this powerful technique.

What is technical analysis?

Technical analysis is a method of analyzing financial markets by studying photos, patterns and trends using various indicators and tools. It is based on the idea that recent market behavior can be used as a guide for future price movements. There are several types of technical analysis, but we will focus on the most popular:

• Graphics : These are repetitive visual patterns that appear in graphics, such as trends, reversal or continuations.

• indicators : These are mathematical formulas used for graphic data to predict future price movements.

• Bollinger bands : A technical indicator that measures variability by drawing two medium mobile with a specific range.

how to identify market trends with technical analysis

To identify market trends using technical analysis, follow the following steps:

• Some popular indicators include:

* Medium mobile (MA): Average prices at different times

* Relative force indicator (RSI): measures the impulse of prices and variability

* Bollinger bands: measures price variability

• Analyze graphic patterns : Identify graphic patterns such as trends, reversal or continuation. Look for designs in accordance with the current trend.

• Identify excessive/excessive conditions

  

  : Use indicators to detect excessive conditions and general conditions. When prices reach extreme price levels (for example, historical maximum), this can be a sign of a potential return.

4.

• Use indicators to confirm trends

  : Use indicators such as RSI or Bollinger bands to confirm trends, especially in combination with other technical analysis tools.

Common technical analysis tools

Here are some typical technical analysis tools at the beginning:

• Medium mobile (MA) : Average prices at different periods.

• Relative force indicator (RSI) : measures the impulse of prices and variability.

• Bollinger bands : measures price variability by drawing two mobile average with a specific range.

• MacD (divergence of mobile convergence) : The moment indicator that detects changes in the direction of the trend.

• STOCHASKA oscillator : measures the relationship between price and relative strength.

Tips for effective technical analysis

• Exercise, exercise, exercise : develop your skills of technical analysis of graphics and trends in time.

• Be disciplined : Sing your investment strategy and avoid emotional decisions based on short -term market fluctuations.

• Use many indicators : Connect many indicators to confirm trends and reduce risk.

4.

• Do not try to predict : Technical analysis is not a glass ball; This is just a tool that helps you make conscious decisions.

Application

Technical analysis is a powerful tool for identifying market trends on cryptocurrency and blockchain markets.

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