Before investing in every market we have many options to find who to invest in, technical analysis is one of them.
What is technical analysis :
It is based on the fact that the market movement is not aleatory, that action in the past reflect in the future.
In order to use this tool we have indicators :
RSI
MACD
Moving average
And much more ! I will detail them in another blog post.
Why you should use technical analysis in your investing strategy ?
Technical analysis allow you to find interesting price to enter or to exit the market, it can also allow you to predict a potential changing trend and can be a good way to made profitable short-term trade. For exemple one of the most challenging question in this bear market is did we find a bottom ? Well, no one can be sure at 100% but a little bit of graphic analysis might help us :
In this exemple with the pair BTC/USD we can see that an indicator the RSI ( one of my favorite ) mark a divergence in a Weekly Time frame ( the bigger the Time frame the more powerful the movement is ). Anyone who know a little about RSI will tell you that it is a very good indicator of a changing trend. And we did see, that after BTC rose nearly 100% from it’s bottom (15 550 $ — 30 600 ) . Even tho it can be inaccurate it’s still a great tool to to locate us in a market especially a new stock or crypto we want to invest in.
Conclusion :
Technical analysis is full of indicator that can help us in our decision to trade it can also help newcomers to have rational decisions instead of succumbing to the fear of missing out ( FOMO )
Disclamer : This is not financial advice, make sure to do your own research before investing your money.
Feel free to ask questions and suggestions for the next article ! Have a nice day.
And as always thank you for reading !