Some of the main critiques of technical analysis include its accuracy because historical data does not necessarily indicate future movements. More often, most indicators are “lagging”, which means price movements do not occur exactly the same way each time, or only form patterns that are identifiable after they have already played out. This makes technical analysis less reliable than it looks.
However, technical analysis does work in many situations and provides higher odds of you winning, especially if you combine it with fundamental analysis.
Crypto trading is not just looking at charts and trying to predict what direction prices will move next. Technical analysts study how markets work and try to understand why prices behave the way they do.
Crypto technical analysis becomes useful and insightful especially when markets move in an obvious bullish or bearish direction. There are times when the market moves sideways and this is where usually technical analysis becomes weaker.
Hopefully, the above technical tools and indicators will become helpful additions to your cryptocurrency trading strategies.
And while some traders rely on technical analysis alone to make trade decisions, we strongly recommend that you use both technical analysis and fundamental analysis when making trade decisions. On top of that, you need to have strict risk management. You need to know when to cut losses and when to start taking profits
. Don’t let one or two losses ruin your entire portfolio.
Having a good risk management strategy is actually more important than having a good trading strategy.