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Trading is one great way to multiply your portfolio. It is also one of the fastest ways to lose over half or all of your money in a few hours. It is not a pleasant place for new hodlers and amateurs.

One of the best ways of winning at trading the crypto markets is the ability to understand the market to discover and possibly predict future trends. It is a very powerful skill to have because even though no one can really predict the market with the utmost precision, good traders with the right skills can predict it to a certain degree. Sure there might be some losses along the way, but with good trade and analyzing skills, the success rate far outweighs the losses they may encounter. The general term for understanding and possibly predicting the market trend is called Analyzing the market.

There are two methods of analyzing the market. They are called:

• Fundamental Analysis, and;
• Technical Analysis.

Fundamental Analysis (FA)

Fundamental Analysis involves seeking out the intrinsic value of a market asset by examining related economic, financial, and other qualitative and quantitative factors. Fundamental analysts study anything that can affect the security/asset's value, including macroeconomic factors (e.g. economy and industry conditions) and microeconomic factors (e.g. financial conditions and company management). The end goal of fundamental analysis is to produce a quantitative value that an investor can compare with an asset's current price, thus indicating whether the security is undervalued or overvalued.

In a nutshell, with FA, you could tell if an investment is a good one or not by exploring and comparing the strength and weaknesses of the study asset. FA ask questions like; What's the company behind this asset? Who's on the team and what skills do they have? What experience do they have? Do they have a record of making things work? Is there a working product? Do people use it? Do people even need it? Is the company financially buoyant? Is their networking and partnership skills strong? Are they connected or affiliated to any top organization? How big is this connection? What's the asset's current market value? What's the total supply of the asset? What's the annual inflation rate if there is? etc.

Technical Analysis (TA)

Technical analysis is a trading discipline that evaluates investments and identifies trading opportunities by analyzing statistical trends gathered from trading activity, such as price movement and volume.

Technical Analysis is different from FA because it really doesn't concern itself with the economic evaluation of the asset. The only things it considers are the price movement and the volume of trade around an asset. The core assumption in Technical Analysis is that all known fundamentals of an asset are factored into its price. Hence, traders look at the chart history and use terms such as Support and Resistance to identify market entry points that are likely to yield profits.

There are plenty of great materials that can teach people on how analyze the market and trade with good success rates. The thing is sticking at it over time to be able to master and use these skills.

Someone from Coin360 put together a compact and easy-to-understand material about market analysis on Cointelegraph. I think it is a great place to start and get your interest piqued. Check it out: https://cointelegraph.com/explained/how-to-predict-crypto-price-trends-explained

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