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Technical Analysis (TA) is a trading discipline that analyses statistical trends acquired from trading activity, such as price movement and volume, to evaluate investments and uncover trading opportunities. By noticing patterns, traders can use technical analysis to their advantage.
It is commonly used to generate short-term trading signals from various charting tools, but it may also aid with assessing a coin’s strength or weakness concerning the more extensive market or one of its sectors. This data aids analysts in bettering their overall valuation estimate or a cryptocurrency.
However, TA is not foolproof; there can be major unforeseen events that drastically affect the market. For example, the recent market crash of May 2022 was widely predicted to happen because of the Russian invasion of Ukraine and the post-lockdown economy affecting the markets. Another interesting example is the massive 96% decline of Terra (LUNA). This was not predicted using TA, with the chart not displaying any sign of an impending crash. Instead, it was an integral issue within the whole concept of LUNA that, unfortunately, most overlooked.
Short-term, TA can be incredibly useful if employed well. But with the examples noted above, it cannot be considered 100% flawless.
*The content hereby presented is for informational purposes only. Nothing of this content that is available to you shall be considered as financial, legal or tax advice. Please, keep in mind that trading cryptocurrencies pose a considerable risk of loss.
*The content hereby presented is for informational purposes only. Nothing of this content that is available to you shall be considered as financial, legal or tax advice. Please, keep in mind that trading cryptocurrencies pose a considerable risk of loss.
Technical Analysis (TA) is a trading discipline that analyses statistical trends acquired from trading activity, such as price movement and volume, to evaluate investments and uncover trading opportunities. By noticing patterns, traders can use technical analysis to their advantage.
It is commonly used to generate short-term trading signals from various charting tools, but it may also aid with assessing a coin’s strength or weakness concerning the more extensive market or one of its sectors. This data aids analysts in bettering their overall valuation estimate or a cryptocurrency.
However, TA is not foolproof; there can be major unforeseen events that drastically affect the market. For example, the recent market crash of May 2022 was widely predicted to happen because of the Russian invasion of Ukraine and the post-lockdown economy affecting the markets. Another interesting example is the massive 96% decline of Terra (LUNA). This was not predicted using TA, with the chart not displaying any sign of an impending crash. Instead, it was an integral issue within the whole concept of LUNA that, unfortunately, most overlooked.
Short-term, TA can be incredibly useful if employed well. But with the examples noted above, it cannot be considered 100% flawless.
*The content hereby presented is for informational purposes only. Nothing of this content that is available to you shall be considered as financial, legal or tax advice. Please, keep in mind that trading cryptocurrencies pose a considerable risk of loss.
