Do you need technical analysis in crypto trading?

 There is no direct “yes” or “no” answer to this big question. Every type of trading would benefit a little from the use of technical analysis. But if there was one method of technical analysis that was really accurate then every trader would be able to become millionaires in a short time. The thing about technical analysis is that the parameters might remain the same but the way the parameters are used and the number of such technical indicators used to take a decision would change.

Crypto trading appears complicated but it is known to be one of the most profitable areas in the recent times. The volatility of a crypto currency market is something that almost every trader knows about. Some choose to invest long-term and use the crypto currencies for other online transactions. And some choose crypto trading bots like Ethereum Code in order to give a great start to their crypto currency trading journey. If you have never used a crypto trading bot before then check this out to read a review about Ethereum Code.

The importance of technical analysis

Finding the support and resistance levels is something that nearly all the traders would do when they choose crypto trading. This would help them set the lowest price the currency can reach and thus the maximum loss possible. Much like the other markets the crypto market too works in cycles. There are ups and downs that sometimes cannot be predicted. But the direction of change can often be found. The fundamental analysis might not be too relevant when it comes to crypto trading as it would be with stocks. So most traders rely on technical analysis.

The limitations

The market doesn’t always progress as the indicators indicate. The influential factors involve real people and trading bots as well, besides the governments and others. Though crypto trading would not be as strongly influenced by the government decisions or political changes as with the stock market, there are still minor effects felt. And with the growing talks about countries imposing rules on crypto trading the situation changes further. So even with those crypto currencies that are identified to be strongly moving in the upward direction, some sudden changes might change the traders’ opinions. This might lead to a few traders taking hasty decisions which in turn might impact the price of not just that crypto currency but others as well. So wise trader would know when and where to use technical analysis.