Why is K-line technical analysis important? 🔺🔺🔺
I suggest that everyone in the cryptocurrency circle learn the basic K-line technical analysis, whether you are a value person, a MEME sentiment person, or a macro person...
The following arguments will completely change your prejudice against technical analysis, because I used to be dismissive of it.
1. In many cases, the market is largely dominated by market sentiment. An ounce of sentiment is worth a pound of fact. Technical analysis provides us with a unique measurement mechanism for various "irrational" (market sentiment) factors in the market.
2. Technical analysis is an important part of a trading method with clear discipline. All traders cannot escape emotional problems. This is our natural disposition, and strict discipline helps to mitigate its negative impact.
Technical analysis can help us face the market objectively. Only by standing a certain distance from the object of study can we better observe its overall picture. Technical analysis allows us to take a step back and observe the market, which gives us an unusual and perhaps more appropriate view of the market.
3. Sometimes technical signals themselves are the main driving force behind market movements. Since they are an important factor in driving market movements, you have to be wary of them.
4. The random walk theory states that the market price changes of the previous day have no effect on the market conditions of the next day. However, this academic theory omits an important market component: people. People today certainly remember yesterday's market conditions, and they take action based on their personal experience so far.
In other words, on the one hand, people's reaction to the market does affect price changes; on the other hand, changes in market prices will in turn affect people's reaction to the market. In this way, in the process of studying the market, price itself becomes an important part that we must consider.
5. Some fundamental news may not be known to the general public, but you can correctly expect that they must be included in the price information.
If someone gets some information that drives market changes before everyone else, then he is likely to buy or sell in the market first and will not stop until the price change offsets his information.
In this way, in some cases, such news may have been digested by the market as early as when the event occurred. In a nutshell, the current market price should fully reflect all the market information that is happening at the moment, whether this information is already known to the general public or is only in the hands of a very small number of people.