As we go step by step to evaluate our savings in the market, we now came to determine our buying and selling levels according to the game plan we will establish. There are 2 methods we can use for this in general terms; 1- Fundamental Analysis 2-Technical Analysis
These analysis methods serve as a guide for us to reach our goals on the path to financial freedom. This week I will talk about what these guides are and how they can be used. Let’s start if you are ready
1- Fundamental Analysis: Fundamental analysis is a method that examines economic, financial and sectoral data to determine the true value of an asset (e.g. stock, currency pair, commodity, crypto)
In order to learn fundamental analysis, it is very valuable to get an education from a competent person, but before that, you need to decide whether it is a suitable analysis method for you to do a research on what it is.
Of course, there are some metrics you should pay attention to in fundamental analysis. Some criteria used in fundamental analysis;
Macroeconomic Outlook: Before examining the instrument you will invest in, you should definitely look at the general economic outlook and see the big picture
WhitePaper/Technical paper: You can learn about the purpose of the project, its objectives, the differences between it and its competitors, so that you can find an answer to the question of whether the project really produces a solution to a problem.
Economic structure: The only thing that makes projects successful is not only that they really produce a solution to a problem. At the same time, while producing a solution, economic metrics must also be adjusted effectively. Ineffective token metrics can cause the project to fail, no matter how robust the project is.
Team: In order for the project to be successful, it makes a serious difference that the Cv of the team is also solid. For this reason, what the team members have achieved is very valuable
Investor: You can check who are investors, what those investors have invested in before, and whether their investments have brought profit or not. For example A16z, Sequoia etc.
MarketCap: In order to get maximum efficiency from your investment in a project, investing in lower but promising projects instead of projects with high market value will provide more profit.
Marketing: We can say that all the promotional activities of the team to announce the project in the market. Their activity on Twitter, the vitality of the community on discord / telegram, physical events, eliminating the question marks in the head with blog posts, etc. The fact that they attract people’s interest in the project with their works can create a reference for the project.
2- Technical Analysis: With Technical Analysis, the direction of future price movements is tried to be determined with the help of graphs and mathematical indicators reflecting past price changes. Prediction of the future market situation with technical analysis has an important place in developing trading strategies for investors in financial markets.
Decisions are made on the time to start trading and the trading volume to be made based on the forecasts created through technical analyses. Price change forecasts help market traders to make sound decisions before trading. There are different methods used in technical analysis:
Trend Following: Trends are very important in technical analysis. No matter which technical analysis method you use, the trend is your friend. Do not fight the trend, you will LOSE. Trend is your friends:)
Patterns: Predicting the point where the price will go with various geometric structures formed on the price movement. OBO-TOBO, Dish, Symmetrical triangle, Channel etc.
Indicators: Indicators developed based on price information are applied on price charts. Moving average, Rsi, Macd etc.
Harmonic Patterns: 5-point reversal structures that include well-defined combinations of consecutive Fibonacci retracements and Fibonacci extensions on price movements, leaving less room for flexible interpretation.
Fibonacci: A series of numbers obtained by adding each number with the number preceding it. The Fibonacci toole is drawn from left to right to the price movement. It is used in harmonic patterns and geometric patterns for find the target price. Important ratios; 0.382–0.5–0.618–0.786–1.272–1.618
Technical analysis and fundamental analysis do not give a clear conclusion about the instrument you will invest in, but only show you the point it can reach. Then it depends on the dynamics of the market. No method is the golden bowl. The important thing here is to choose the appropriate analysis method for ourselves and to make the most of the other method and to create our road map in a healthier way.