Hello steemians and friends of Steemit Cypto Academy community,Good day to you all. I hope you are all doing good. I am also fine today. I am here to participate in the #steemitengagementchallenge and share to you the little knowledge about Technical Analysis.

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Definition and importance of Technical Analysis in the Crypto ecosystem

Technical analysis includes using mathematical inductors to assess statistical trend which is also used to predict the price in the crypto market. It is completed by looking at the past price changes and volume information to decide what the market works and anticipate how it will affect future cost changes.Technical analysis uses the idea of cost designs from the past and technical markers to break down the outlines and predict the future movement in cost. This can be applied to any market including Bitcoin (BTC).

Technical analysis assists you with precisely predict the lows and highs of Bitcoin costs throughout various time spans. Such predictions will assist you with pursuing instructed and data driven choices on purchasing Bitcoin at a decent cost and selling at a benefit. Technical analysis indicators assists the investors with knowing when to enter or leave a trade to create a gain. Technical analysis takes a gander at cost information and makes an interpretation of it into simple to-understand signals. These signs assist the investors with deciding the right chance to trade.

Components of technical analysis.

•Price and volume data

Like fundamental analysis consolidates an organization financial reports, financial conditions. Technical analysis uses two informational set, for example cost and volume. These are the most fundamental parts of technical analysis without which the investigation couldn't be performed.

Cost data comprises of real costs at which the purchaser and the sellers of that specific security agreed to transact. There are numerous transactions that occur over the course of the day, week, and month and even year. Thusly, these costs are consistently tracked and investigated to check the pattern of the security.Volume likewise assumes a critical part and is a proportion of the level of support from masses in fundamental cost change. Volume data estimates the number of contracts that have been traded in a particular time.

•charts

The price and volume data comes in humongous volumes as there are endless exchanges occurring consistently. Subsequently, it turns into a monotonous task to analyze this data in its raw or even in a tabular structure. One method for conquering this issue is to sum up this data and plot it on a chart, which gives a graphical representation of that data.This graphical representation of cost and volume data becomes the premise of technical analysis. The costs are summed up as four data points: high, low, open and close price, for the security inside a particular time.

What do you understand by technical indicators?

Technical indicators are heuristic or pattern based signals created by the cost, volume, as well as open interest of a security or contact used by traders who follow technical analysis. By investigating authentic information, technical analyst use indicators to predict the future cost developments. Technical indicators are methods used by entities during technical analysis to pursue investment decisions. It to a great extent uses previous costs to estimate future cost changes.

Moving Average Convergence Divergence (MACD)

Moving Average Convergence Divergence (MACD) uses two moving midpoints. In the event that the two midpoints are meeting or converging, the situation is viewed as convergence, and the moment decreases. Also, when the midpoints are diverging, the situation is divergence, and the moment increases. The methodology begins with making a Moving Average Convergence Divergence line and the signal line. In the event that the MACD crosses and moves over the sign line, it is generally a buy signal, and assuming the MACD crosses underneath the sign line, it is a sell or short sign.

Advantages and disadvantages of technical analysis

ADVANTAGES

1.The major advantages of technical analysis are that it requires less investment than fundamental analysis.

2.It permits us to assess patterns and trends of stocks using a chart analysis to conjecture movement of stocks.

3.As we all know timing plays a vital role in the stock market. Technical analysis assists us with the entry and leave focuses for our trading.

4.Technical Analysis covers different indicators which can be helped with any trading.

DISADVANTAGES

Mixed signals

At times, one of the technical indicators will show a sell signal and another indicator will show a buy signal. This creates confusion in trading choices. This is one of the burdens of technical analysis. Therefore, a few traders use a combination of technical indicators, volume, and moving averages to decide the entry and exits point.

Accuracy

When such a lot of Accuracy is sought out using Technical Analysis, the degree of accuracy isn't always 100 percent. Though the commodity forecast is given and every one of the technical indicators propose conceivable entry and exits points, effective trade isn't ensured. A commodity may either decrease after the entry or increase after the exit.

What's your advice to anyone about it?

Everyone has a good and a bad side. Similarly Technical analysis has advantages and disadvantages.Even though it requires investment than fundamental analysis but it’s degree of accuracy isn’t always 100%. It is the best tool for cryptocurrency.