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Hello everyone, how are you doing today? I hope everyone around here is doing all great, I welcome you to a new season of the Steemit engagement challenge, here on, I shall be participating in the crypto academy to join the contest theme: Crypto Market Technical Analysis.

As we know that when it comes to trading, and as well to be considered a good trader, technical analysis determines a lot in the crypto market, cryptocurrency movements tend to always repeat themselves in patterns, so with technical analysis, we get to have some advantage ahead of the market movement, and to predict what could happen next or the possible trend the market is expected to reach before making a new movement.

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How would you define Technical Analysis in the Crypto ecosystem? Mention its Importance

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Technical analysis could be defined as a method or a pattern of analyzing the crypto market in a chart, this is done in a way by which the next possible movement can be predicted due to the similar past movement we have witnessed in particular market behavior, this could be in a series of patterns or the past market volume could be used in analysis what is likely to happen next.

The Technical analysis has been saving traders for a while, as it helps in identifying possible trends or a possible retracement that is expected to occur in the market, and this gives traders an edge ahead of the market movement.

Technical analysis involves multiple methods of analysis, some traders could make use of Volume or Divergence indicators to predict the next movement, and some as well could make use of patterns, such a case of, head and shoulder patterns, falling wedge patterns, and others, all these are done to forecast what could happen next and as well to be on a safer side of the trade.

Importance of Technical Analysis

• it gives traders an edge on what is likely to occur in the market and with this, a trade could be placed ahead of the market arrival.

• Helps traders in setting their target and exit level, with T.A, traders can determine where their target level is to make a profit and also identify when to exit the market in case the market breaks the Analysis.

• Boost traders' confidence in a trade: when the T.A is properly applied, it gives traders full confidence in the next market behavior which thus makes them stay ahead of the market.

• Eliminate unnecessary risk: with Technical analysis, traders can simply identify a wrong or fake trend and as well exercise patience to look for a good entry.

• Helps in identifying the support and resistance region as well.

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Do you have practical knowledge of how to conduct technical analysis? Highlight some of the components of Technical analysis.

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Yes, I do have some practical knowledge on how to conduct technical analysis, as a case whereby I do mark the support and resistance zone first, with this done, I get to note when to set in my entry and applied the proper risk management to my trade.

The followings are the component needed for a proper technical analysis to stay ahead of the market moves and forecast its next movement.

Chart - the First importance is to pick the chart type that you found yourself to be comfortable with, there are several such as Bars, candles, Heikin Asi, Moving lines,s, and others, to perfect your analysis, you pick the one that you think best works for you, although the Candles Chart is most common, as it uses the green candle to depicts the buyers and uses the reds to depicts the market sellers.

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As could be seen from the image above, I am making use of the Candle chart type for my analysis.

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Timeframe - Another thing to be considered is the Chart time frame, which could be used to depict the market movement of the past time frame, you could make use of a lower time frame in the scalping market as this gets you to see the past movement of the short market frame, but when it comes to long term trading, I make use of the Daily time frame, so I could witness the past days movement of the market.

^{Image Screenshot From Tradingview}

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Identify Support and Resistance Zones - One thing that is most importantly in technical analysis is to identify the market support and resistance zone, as we could see that in the resistance zone, the market stops rising it starts falling, while in its support zone is when it bounces back from falling and start rising.

When these zones are identified, traders can then predict and know the exact trades to place, as you are expected to buy when the market hits the support zone, as as well expected to sell when the market is at its resistance level.

^{Image Screenshot From Tradingview}

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What do you understand by technical indicators? Do you consider them effective for trading cryptocurrency? Which one is your favorite and how does it work? (Screenshots required where necessary)

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Technical Indicators are Another component in the market analysis, these are indicators built in other to predict what is likely to happen next in the market movement, and I do find them effective as they tend to give a near true value of what has been happening in the market and what is likely to happen next.

My most preferable indicator is the MACD indicator, it is a moving average indicator which means it calculates the average price movement of the market and depicts the result, the indicator signals a buy when its moving line crosses the zero dashed line to the top and it signals a sell when it crosses the zero line to the bottom, this has been helping boost my strategy and helping to seek ahead of the movement in a trade.

^{Image Screenshot From Tradingview}

As can be seen from the image above that the signals gotten from the MACD indicators were right when compared to the chart as well, the market went bullish when the MACD crosses the zero dashed line, and we could as well saw the bearish movement when the MACD line crosses the zero line to the bottom, traders are to be careful when making use of this indicators as some give false signals as well, and at times the indicator lags.

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Highlight the advantages and disadvantages of technical analysis. What's your advice to anyone about it?

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Whatever has its good also has its bad side, here I will be giving a few examples of advantages and disadvantages of technical analysis.

Advantages of technical Analysis

• technical analysis helps traders in identifying the true market trend, so as with this case, traders could be sure of the particular trade to place.

• technical analysis helps in forecasting the next market direction, when a T.A is properly applied, traders can predict what is likely supposed to happen next in the market.

• Helps in identifying the support and resistance zone, when these zones have been applied, traders can then be sure of their entry and know when to exit a trade.

• helps in reducing loss, technical analysis helps traders in limiting their losses as it gives them an edge over the market, and when a reversal occurs, traders could quickly fall out and look for the next market entry.

• Technical analysis as well helps traders in identifying market traps, there are times when a market could spike, but when your T.A is solid, you get to identify that that was a trap by the market's strong hands.

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Disadvantages of Technical Analysis

• There are times when the patterns could be false, as in a case where traders already placed trade ahead and the market develops a new entry, this could tend to a great loss on the traders' end.

• Breakout: Technical analysis can procure in a loss sometimes as a situation whereby the market breaks the expected zone, which is not supposed to, but this is crypto, anything is bound to happen.

• Volatility - There are times when volatility could affect T.A, but technical analysis might not expect this, and solely dependent on T.A could make a huge loss for trades.

• Technical indicators mostly lags, when analyzing trades, indicators such as moving lines tend to depict signal late, and sometimes most of them depicts false signals, a dependence on this could lead to a loss on the trader's side as well.

My Advice regarding technical analysis is to be sure of a trade you want to place, and as well be aware of the market trends and avoid following trends, ensure to make use of two to three indicators before making your entry as there is nothing like 100% accuracy when it comes to T.A, and most importantly, you should only trade what you could afford to lose, and not only depends on T.A, as risk management makes the most of crypto trading.

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Conclsuion

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Here comes my conclusion on the topic: Crypto Market Technical Analysis, where I have as well identify the component needed to analyze a market, and as well explain the chart types and the best frames for analyzing trades.

Technical indicator as well gives traders an edge in the market but solely dependence on them could lead to terrible loss, as a case whereby Technical analysis is just 30% of trade, the risk management, and the trader's psychology owns the rest of a successful trades, and you should as well always watch out for news when making a trade on a particular market.

Thank you, everyone, for following through, I hope to see a great deal of you next time, Goodluck!!