How To Use Technical Analysis In Crypto Trading

Crypto is quick. Prices are very calm in one moment and all over the place in another moment. I have witnessed it as it occurred. On one occasion I purchased a coin at what I believed to be an ideal price. A couple of minutes later, the price plummeted like a rock. I did not part with a fortune but that experience made me realize something guessing does not pay. That is when I began studying how to use technical analysis in crypto trading.

Technical analysis is as though reading the mood of the market. It allows me to view charts, identify trends, and determine what may happen in the future. I am not being lucky. I study the indicators–price trends of the past, volume fluctuations, and tendencies that tend to repeat themselves. It is something that gives a show of the chaos.

In this post, I will be guiding you through everything I have learned. I will do it in simple terms. No elaborate stuff of any kind. Simple steps to follow only. I am hoping to guide you to a place where you will feel comfortable doing the technical analysis yourself as I did it. So, let us get down to it.

 

 

 

What is Technical Analysis?

Technical analysis is just about studying price charts and making superior decisions on the basis of charts. Rather than attention to the news or the team behind the coin, it analyzes the past movement in price. The thought is that history is a semi-reoccurrence. In case something has happened in the past, this is possible to happen again. That is the rudimentary reasoning.

I used to believe that trading was all about having the right coin. I would hear of a new venture, get enthused, and invest. It occasionally proved successful. It did not in most times. I could not recognize why the price was increasing or decreasing. It was at this point that I discovered technical analysis. It made me take my time and think of the market differently. I began to see a regularity. Then, I began noticing the prices that would either increase or decrease.

People have another type of research which is referred to as fundamental analysis. This is where you consider what the project is about, who is managing it, and how helpful it would be in real life. That is good as well but not always beneficial in time matters. An excellent coin may also depreciate in the case of a declining market. I resort to technical analysis because I want to know when to go buy or sell.

This is the perfect method for the crypto world. Life is a fast-moving thing. The prices are volatile. The news may strike at any time. Technical analysis provides me with something that is stable. It has enabled me to make clearer decisions, panic-free, and more focused, even in a scenario when the market is like a scene of a riot.

 

 

Why Use Technical Analysis in Crypto Trading?

Crypto markets are not inactive. In minutes prices may skyrocket and in just the same amount of time, it may crash. I have witnessed coins that shot up in a night and plunged in the next morning. Such a motion can really play with your head unless you have an obvious resort to deal with it. This is one of the reasons why I base my analysis on technical analysis. It helps me to establish some sanity in the insanity.

The first time I began to give charts more corresponding attention I realized something. Some of the price movements recurred. The repetition, over and over, of the same forms, same behavior. It was not by coincidence. The market had some patterns in its movements. As soon as I started to realize those, I quit making unrealistic guesses. I began to place an eye on opportunities of entering and exiting with greater assurance.

I also understood how to better manage risk. In the past, I would totally commit to the trade in the hope that I would be the lucky winner. I could at times. In most instances, I did not. Technical analysis has made me plan. I determine the amount I am ready to risk, when to take a profit, and when things turn the other way around. Winning is a good thing but not making everything a loss in one unfavorable trade.

There is a structure and this makes trading less stressful. It also makes me pay attention and inclines me not to make decisions out of my feelings. I do not have to wonder what the market will move next. I search for what has already been implemented and I follow it. It is the true strength of technical analysis. It makes you quick, cool, and ahead of the game.

 

 

 

Core Concepts of Technical Analysis

Support and Resistance Levels

Among the most significant concepts that I learned in trading are support and resistance. They seemed complex right in the beginning, yet, they are quite simple. Support is such a floor whose price is bound to halt its descent. Resistance can be seen as a ceiling upon which the price is likely to cease. When these points appeared on a chart before me those points made me think that it was the first time that I was reading the market and not guessing.

I began to observe that there are some levels of the prices when they would be jumping. That is where the support or the resistance came into play. It was logical. The purchase takes place when the buyers believe that something is cheap and sellers arrive when they believe that a coin has risen high enough. I plan my trades with these levels. Quite frequently I purchase close to support and the indicator indicates that the price has held very well. When the price begins to slow down I would look to sell at or just above resistance.

In certain instances, the cost just gives in. That is when the fun starts. In the event that one price is moved upwards through a resistance, then the same point may become the fresh support. Then the reverse may also occur. When I was observing a coin falling through support and coming back up again, I can recall how it used to get hung at the same level. The thing was as though the market recalled it.

Moving trends are also applicable as support or resistance to me. I will monitor the price action to these moving levels. When it continues to bounce off an ascending line I consider that line as support. These are not random moves. They provide me with an improved perspective on the direction that the market wishes to take. With time, these levels have enabled me to become smarter in entries and exit through learning to read. It puts me in more control and it eliminates some of the guesswork.

 

Trend Analysis

It is one of the first lessons I have ever received as a trader, follow the trend. In case the price is increasing with time, then that is a bullish trend. When it continues to fall then this is a bearish trend. A sideways trend is when it is only moving sideways jumping between a peak and a trough. The theory is easy, however, it is hard to identify them in real-time.

I used to follow all action. I would get in when the cost began rising, only to have it drop again a few minutes later. And then I would get a fit, and sell. It took long before I discovered that I was not seeing the big picture. After I began to listen to the trend rather than each tiny pulsation, the situation became different. I was able to get the drift of the market.

I consider ups and downs. When the highs get higher and when the lows get higher, as well, that is normally a good sign. Anything is the contrary is trouble. And when the price only remains stagnant at the range, I wait. Those sideways markets are trapped. I know now, that it is a good move to not trade.

Trends have a narrative. They tell how the majority of people do. Are their expenditures increasing? Are they sold away? I attempt to hear that story. It assists me buy the flow and not against it. People are not always pendant to trends however it provides me with a more straightforward direction and it assists me in not making short-term decisions that are poorly calculated.

 

 

Essential Technical Indicators for Crypto Trading

Moving Averages (SMA & EMA)

Moving averages aided me in getting a grasp on unruly price charts. The first time I was exposed to a chart, I just thought that it appeared to be a bedlam of lines zigzagging everywhere. I was not sure where to be attentive. That is when I heard about moving averages. They iron all that noise out and present the average price over time. That allowed me to have a better insight into what the market was actually doing.

One of them is in two varieties. One of them is slower and more constant. The other responds quicker to price change. The slower one assists me to view the long-term trend. The faster one presents me with what is going on at the moment. I observe them getting around together.

A trick that I commonly employ is observation of the crossovers. That is when the faster line will be over or under the slower one. When it moves against it; then it is normally a good time to seek purchasing opportunities. As it crosses down it may indicate to be cautious or take the profits. I have used this arrangement once on a coin which had been lodged weeks. I was signaled by the crossover and it turned out to be one of my best trades of the month.

This combo with the 50-day and the 200-day lines is also on offer. Many pay attention to that. When the 50-day line becomes stronger than the 200-day one, it serves as a solid indication that the trend would be adjusting well. I have applied that to identify large moves before they happen to give an early warning to stop a large move. It never shows a perfect road, but at least I have something to base on.

Movings do not foretell the future. All it does is help me to know where we are at the moment and where the market might be going. They have prevented me from going into trade at times when I would have normally traded and avoided going off course when the markets have had large movements. When the market becomes confusing I never miss looking at the moving averages. They make me take my time and view things in perspective.

 

MACD (Moving Average Convergence Divergence)

Seeing the MACD, I could not understand how complex it was the first time I came across it. A group of lines that wanders over a graph. I voluntarily almost omitted it. However, when I got to know the meaning of those lines I could sense how strong an impact could be created.

I have two principal lines of interest. One is quick to respond to price changes and the other to a bit slow. The gap between such lines informs me about the strength of the momentum. It is when they approach each other or pass that I get interested. There is also a bar chart that reveals the level of separation of the lines. That section will assist me in knowing whether things are moving fast or slowly.

My main use of it is to identify a trend that may have been emerging or that may be weakening. Crossing the line is used when the fast line crosses over the slow one and it is usually an indication that things may begin to rise. That is when I began searching for purchasing opportunities. When it passes over, that is normally an indicator to be more careful. By just looking out, I have caught some good deals with just that one move.

I find it most favorite because it proves what I see. When I believe that the market is going up and MACD concurs with me, I am more secure. When it says something other than me, I listen step back, and look again.

It does not work perfectly. Nothing is. Although this instrument has enabled me to avoid entering bad trades or leaving good trades too soon. I will not say it enabled me to make a move alone, but it enabled me to check it before making the move. It is the added confidence that I require in a dynamic market.

 

RSI (Relative Strength Index)

The RSI is among my favorite indicators after realizing how great it performs in real-time. It indicates the overdoing of something in one direction with a coin. In the case when the figure is very high then it normally implies that the price has increased at a very high rate and will fall sooner. When it is very low it usually implies that the price has dropped very harshly in a manner that may rebound.

I recall watching a token that used to go crazy and pump. All the people around the internet were screaming to purchase more. However, when I checked RSI, it was down in the overbought region. That gave me a halt. I sat waiting rather than jumping into it. The price went down shortly afterward. That moment prevented me from a huge loss.

I find the application of the RSI the most when there is no movement in the market. Prices are not moving well in an upward trend. They are simply back and forth. Through time, RSI has made me realize when something is overstretched. When it appears to be oversold, I begin to wait to see the indication of a bounce. When it is overbought, I consider the possibility of taking profits or outright purchase to avoid profits.

It is not always an indicator of a perfect signal. There are some occasions when the price remains high or remains low for too long. However, it puts me on advance notice. It assisted me to calm down and pose a question to myself, is this, the right time, or am I following the hype?

It has worked best for me to add something to what I see on the chart and the RSI with the result giving me a better timing. It allows me not to make an emotional trade and follow smarter actions. That has helped me a lot in trading and also in the way I feel about my decisions.

 

Bollinger Bands

This was the reflection I got the first time I viewed the Bollinger Bands on a chart picture representing a price that was being rubbed between rubber bands. I remember that image, and it even assisted me in figuring out how they operate. It has a center line with one band at its top and the other one at the bottom. In the majority of cases, the price fluctuates amidst them. It may be too high when it reaches the top. It may be too low when it hits the bottom.

What is good with these bands is that they elongate and shorten according to activity in the market. When the bands pull in, then it normally indicates the market is silent, and we may have a major coming. When they open up you know they are hot. I have watched coins range staunchly fixed in a certain area, but only to explode in one direction or the other. By observing the bands, I was able to know those movements before they occurred.

There were moments when I saw the price touch the top band and then turn against hard. The same goes with the lower band. I do not take those hits as automatic purchases or sales but they make me take them more seriously. I begin to look at other signs as well. In case it all clicks, I take my shot.

They have assisted me in gaining an experience of volatility through Bollinger Bands. They alert me whenever the market is tranquil and when it is going crazy. This assists me in knowing whether I should jump in or not. I apply them to be patient and not to be hooked up in the wrong direction. It is not an ideal system but it is one that I have grown to have reliability in my day-to-day trade operations.

 

Fibonacci Retracement

First, the idea of Fibonacci retracement was beyond my expectations and sounded nonsense to waste my time on it. However, after trying it out I understood the utility in determining potential pivot points of the chart. Such levels of retracement are like mile markers. They display where to look for stalls, rebounds, or reversals when the price has made a mighty move.

This is an instrument that I have tried on several occasions to determine where to buy or sell a position. I use retracement levels from the bottom to the top of a large run-up. When the price begins falling I observe the reaction of the price at such important levels. When it stays still and begins to turn up again on one of those I get interested. My entry point may be that. In case I am in a trade, and the price moves up, then the same levels assist me in selecting locations to collect profits.

I remember once A coin leaped, And then retreated. A retracement level was spot on to a past support zone. I watched and the price stood still there, and then began to rise again. That is where I came in and it became a good trade. That is not always the case but when it works like that it is good.

These levels have nothing to say concerning the future. What they do is allow me to know what other traders monitor. That makes a lot of difference here. When there is enough attention being paid to a given territory, the territory will begin to count. Fibonacci retracement provided me with an opportunity to make my trading more structured, and I never wanted to leave the strategy.

 

Volume Analysis

One of those aspects that I did not pay attention to early was volume and I suffered losses because of it. I would witness a coin at high speed, jump in, and stall. I did not know why until I began to listen to the volume. After I did, everything was easier to understand.

When a price is moving yet other prices with big volumes are supporting that, I consider much more. It implies that the number of people who are purchasing or selling is very high. That makes the move more serious. When the price is going but the volume is poor, I become suspicious. I have fallen into false break-outs in the past- the sudden leaps followed closely by the disappearance. I now start by checking the volume. When it does not increase along with the price, I remain on the sideline.

This is assisted through tools. My habit is applying the OBV so as to have an impression of the buying and selling pressure over time. It creates an impression of whether there is silent accumulation or release. I look at VWAP to know whether the price is reasonable. I understand that the traders are going to be willing to straighten it when I see the price pushing a long way up or down.

Another lesson I have learned that is pretty good is to identify volume breakouts. My indicator comes when a coin has been silent and then suddenly there is an explosion in volume. It is usually the sign of an actual relocation. Just by looking out, I have snared a few good entries where that flurry of volume occurs before the price runs.

Quantity does not tell lies. It displays what people are doing and not only how the chart appears. In my case, it has become an important component when determining whether a setup was actual or a noise. It makes me feel confident to press the trigger button- or the caution to stop.

 

 

Chart Reading and Candlestick Patterns

The first time I laid my eyes on a candlestick chart, I did not know what this was. It simply resembled some rectangles that have lines at the end. However, after I knew the meaning of every component, it seemed that the market began to communicate with me. Each candle is a small story of where the price began, how far it went, and at what point it finished.

Candlestick charts enable me to understand what buyers and sellers do in real. A single candle is not a lot but when I look at them together, the piece of the puzzle is made clear. I have some patterns that I do observe every now and then. The especially reversal patterns. They come along when the market is already exhausted with one particular trend and may be willing to change its direction.

The engulfing pattern is the most powerful among those that I have used. In case the large candle overshadows the one above it, that draws my attention. In the event that I see a bullish engulfing following an extended downtrend, I can rest assured that buyers are re-entering. I have played that as a green light to begin purchasing. Conversely, when there is a bearish engulfing that follows a run-up in the price I know whether to exit or not to enter more.

These patterns do not bear magic but they show the feelings of the traders. I have found out that when a trend hesitates, seems confident, or even has a panic mood, it is likely to follow the mood of the market itself. Such appreciation serves me to not only know what the price is doing but also why it may be doing so.

It is this method of reading charts that has anchored my trades. I do not speculate anymore. I can see actual behavior on a candle-by-candle basis and that also makes me a smarter decision-maker with increased confidence.

 

 

Advanced Technical Analysis Concepts

Ichimoku Cloud

Last time, when I added Ichimoku Cloud to my chart, I was frankly confused. There was something that resembled spaghetti seeping across the screen. However, after giving it enough time to learn the different parts of it, it became very soon one of the most comprehensive frameworks that I employ.

I get an instant clue of the position of the market based on the cloud alone. In case it is above the price, I interpret that as a good place to be. I handle that as a warning when it is latent. At the inside of the cloud? This is normally where it gets ugly and I would end up delaying making any major steps.

It consists of five lines, but all of them are not accidental. Some reflect short-term price dynamics, and some go deeper in the past. Collectively, it forms a system that assists me in reading the direction of the trend, momentum, and even possible support and resistance, all at the same time.

This has been most useful when everything falls in place. In case the price is above the cloud, the fast and slow lines are directed up, and the lagging line is above the price as well, I am tempted to go into a trade. That arrangement does not occur frequently, when it does I listen closely.

I was once following the rules and did not take a trade when the price was way deep in the cloud. I expected it to burst out. It continued to chop sideways instead and I closed the trade at a loss. That is what educated me not to be disrespectful of what the cloud shows. It is not noise, but it provides order to my decisions.

Application of Ichimoku Cloud has aided me to practice patience which is one of the things I have not been doing. I do not just chase candles anymore. I await confirmation, clearance, and alignment. And that has had an enormous impact on my way of trading and how I feel when I am trading.

 

Market Structure Analysis

One of the worst mistakes I made when I started using crypto trading was being concerned too much about the charts and neglecting everything that was happening behind the curtain. Gradually it dawned on me that having an insight into the way in which the market is constructed, into its structure, was my genuine advantage. No longer were it candles and signs. It turned into a matter of knowing the individuals who played the game and their playing style.

Among other things, one of the first steps that I began to pay close attention to is liquidity. It does not matter how flawless the chart appears, in case the trading volume of a coin is not sufficient. I have been caught in trades as I was not able to exit in time. That taught me to test how easily I could enter and exit without making any significant price rises or drops. Greater ease of trade is caused by more liquidity. There will be less liquidity which will result in greater risks and more slippage. It is as easy as that.

Then there are the characters of the movies. It is not that people like me sitting at home pushing buttons. It has large participants as institutions, exchanges, and whales. Then there is the day-to-day crowd responding to the news, following pumps, or following trends. All these categories have some impact on the market. And when I observe price action I attempt to guess who is performing the action. That assists me in making decisions to either follow the movement or avoid going there.

The aspect of crypto that I hate and love is its decentralization. There is no boss, no golden source. The market becomes wild due to that liberty. It also renders it unpredictable. I have observed random tweets move prices so fast and I have witnessed a move so fast without warning as there is no such thing as a circuit breaker as in stocks. That is the virtue (and the mess) of the decentralized system. However, when I came to terms with that, I learned that I could play with that rather than against it.

Understanding market structure changed how I see everything. It gave me a way to step back and look at the whole picture. Now, before I open any trade, I ask myself—what’s the environment? Who’s trading here? Is there enough flow? That mindset has saved me more time than I can count.

The knowledge of market structure redefined everything in my eyes. It provided me with a means to have a Marshall Firewall. Today, the first thought that comes to my mind prior to opening any trade is- what is the environment? What person is trading? Is it flowing adequately? Such an attitude has rescued me numerous times.

 

Order Book Analysis

One of the things that I would never pay attention to was the order book. I considered it to be too complex. However, after spending some time to really analyze it, I felt how much it can tell me of what people are actually doing and not what the price might look like on the chart.

By looking at the bid and the ask prices when checking the order book, I will be looking at the market. The difference between the two known as the spread indicates the tightness or looseness of the market. The little spread tends to indicate much activity hence easy trade without sudden movements in price. A large spread instead causes my concern. That usually comes to signify that the market is thin and less secure.

My first encounter with a giant buy wall was the feeling of a person holding the price. There sat a mass of an order as big as a shield. I did not realize it then but the price was not going to go lower than that. It turned out that those are buy walls and that they can serve as support. Much the same is the case with larger sell walls the prices often cease to rise on their appearance.

When I read these walls, it makes me feel a sense of what the market can do next. It is not a promise but it provides hints. When I notice a buy wall is reducing or vanishing, then it is usually an indicator that buyers are giving up. When a cell wall breaks hard and goes through, it means buyers are strong and passing the resistance in confidence.

The beauty of the order book is its virtual reality. It is not a lag of signal. It is being done now. It is as though you have the window to the brain of the market. I have watched it and it has made me avoid fake breakouts and detect real ones at an early stage. Yes, I still use charts but I believe what the order book says as to the truth behind the price.

 

 

Risk Management in Technical Analysis

Risk-Reward Ratios

In the early days of trading, I used to run every setup which seemed to be exciting. I did not reflect much on the fact that I could lose lots of money and value in relationship to the fact that I could gain more. Such a belief was a Big mistake. A lot. I was informed about risk-reward ratios, and to be fair, it was a world changer.

Now when I even get into a trade, I am able to ask myself one thing, what is the potential reward relative to the risk I am undertaking? When I would risk one dollar, I do not want to earn less than two. That is a 1:2 ratio. Third, that is possible too in case I am able to. At a 1:3 ratio, I just have to win a fraction of each ten trades and I would still be profitable. That is quite a relief.

I recall one speculation upon a new coin that had just broken out of a long range. The preparation was fine, yet I did not rush anywhere. I was waiting, I was estimating where to put my stop under a possible adverse situation, and I was determining where to take profit in case it becomes a positive scenario. The figures fell in place to display a ratio of 3:1 in my favor. I ran in on the trade. Although the price did not jump so quickly to reach my target, it got there. I did not panic; since I had planned it.

Well-devised trading with proper levels of risks and rewards will make the trading experience not as gambling. I do not guess. I decide. When the math does not make sense, I proceed to skip it. There is no arrangement that I would ever take a risk with my capital in case the gain will not be greater than the loss. This habit alone has saved me more than any other habit has saved me against emotional decisions.

Any aspiring trader or person who is serious about trading should learn this early. It is not only a matter of numbers to risk-reward. It is discipline. It is all about achieving what you can and not letting greed or fear guide you. That is how I managed to remain in the game without burning my account.

 

Position Sizing Strategies

The first time I traded crypto I did not even know about position sizing. I simply selected an amount that seemed good and just pressed buy. It was sometimes successful. In most cases, it did not. I gambled either too much or too little. At some point, I learned that it was vital that I make a thought as to how much money I am investing into a trade.

I have used fixed dollars and fixed percentages. Using fixed dollars I would put equal money on every trade regardless of which coin or setup I was in. It was easy. No math. Nothing to second guess. When I would have bidden 50$, I would have risked 50$. This simplified things and I never had to make adjustments regarding this. There I saw a difficulty. The risk remained at the same level as my account rose. I was not scaling against my success.

Then I turned to the fixed percentage way of doing things. I began to put small losses on every transaction using a part of my capital. In my case, it approximated 2%. When my account increased, the size of the trade went up. When it dropped we saw a natural adjustment of the risk. It was more intelligent, and flexible. I did not play the same money risk on a small \$500 account as I would have played on a \$5,000 account. That made me more consistent.

Every approach is applicable. Fixed dollar keeps emotions at a minimum since it is predictable. A fixed percentage does not put you out of touch with the growth of your account. I have also learned to utilize both according to what I want to trade and how confident I am. It is not important what the rule is but important is to stick to the rule. You can not guess all the time. The planning makes the difference. That is how I work on keeping my losses marginal though I remain focused.

 

Portfolio Management

The first thing I did wrong when I started with crypto was buying a nearly total amount of my money in a single coin. I thought it was true. I believed that it would fly. It did so at least temporarily. What happened next was a crash and my whole portfolio fell overnight. It was at that stage that I learned one of the fundamental truths about trading, always make sure you have more than one basket.

The second time it was my diversification that came to the rescue. I began to diversify my investments by investing in various kinds of coins. The blends of good projects, several new ones promising and some mature ones served to cushion the rough edges. When any one of the coins fell down, the others could counterbalance it. I could not ride a single pick anymore and be successful.

Today, I view my portfolio in the way of a garden. I make decisions regarding the amount to plant in every area. This is what strategic allocation is. I do not always follow the gut. I put boundaries. Perhaps 40 percent of the cooled-down stuff in long-run holdings such as Bitcoin or Ethereum, 30 percent of less hegemonic coins I have studied, and the rest of the risky. It provides me with direction and makes me less emotional in market gyrations.

I rebalance on a monthly basis, or so. When an asset gets too large compared to others I rearrange it. I get some profit and shift it to something that is performing poorly yet still in good shape. That puts my portfolio into shape and does not make me overexposed to anything.

I have come to realize that crypto portfolio management is not merely trying to find profits. It is about being safe and keeping to it all that I have created. Smart allocation and diversification put me in control. In my case, that control provides me with peace of mind. So in a market as wild as this, peace of mind is golden.

 

 

Practical Implementation of Technical Analysis

Choosing the Right Timeframes

Timeframes are something that I did not know when I was beginning to trade crypto. I only glanced through the charts and made some guesses. At times I would even sell in minutes. On other occasions, I would continue around weeks. My findings were mixed up. I had also not realized that each type of trading required a rhythm.

This was something that I later understood when I was told that the correct time to take was like putting the right pair of shoes on. In the event that I wanted to run, I required running shoes. At least I would require boots to hike. The same goes when trading. When I am scalping, I consider the 1-minute or 5-minute charts. I look attentively at the screen and take action promptly. It is hardcore and I do not do it every day, but it can be fun when I am just interested in capturing small movements in price fast.

The charts that I use are 1-hour or 4-hour charts when trading swing. This is my style of preference. It allows me pause it allows me to think it allows me to plan and it allows me to wait until I see clearer signals. I do not have to be staring at the monitor twenty-four hours a day. I may keep a trade several days, or a week, according to the trend.

I also broaden the charts when I am going long-term, meaning daily or weekly charts. I am not interested in the noise in the short term. I simply want to get the bigger picture. It is the place where I invest in more serious things. Among those are the trades that I could keep for months. They allow me to sleep at night as I am not stressed up by small dips.

Every period has a separate version of a story. Something that appears as a mighty up-trend on the 15-minute chart may be a small snag on the daily. It is therefore my habit to compare the chart and my target. In the process, I get concentrated. I do not allow confusion. I do not panic.

The ability to get clarification on the timeframes transformed the trading process that I have. It has made me quit following all the moves and start developing actual strategies at my pace, at my time, and at my style.

 

Trading Platform Selection

The chart which I opened once for the first time in my life is still in my memory. It was in the form of a spaceship dashboard. I had no clue about what anything was. However, as time went by I was coming to some realisation. The exchange through which you trade is significantly important in the ease at which you trade. There are tools that are designed to be fast. Others can be used in deep analysis. I have sampled a lot and all of them were good in their own way.

When I search for a platform, I need to find a clean and quick platform. I would like to do things quickly like loading charts, drawing lines, checking indicators, and placing alerts without doing circus tricks. I require appropriate visuals since I make decisions out on what I see. When it requires lots of clicks to perform a basic task, I am gone.

I have long been using TradingView. It is the Swiss army knife of the charts. I can stack indicators, zoom in and out, and even save the layouts of various coins. The alert system is the thing that I like. I do not need to monitor the charts the whole day. When something important is happening; I can only see a ping in my phone.

I also tried Coinigy in case I want to access several exchanges on a single platform. It assisted me in monitoring my trades in one stop instead of switching tabs. It is more crypto-oriented, which simplified my life. Exchange tools are still sometimes useful to me. Other exchanges provide integrated charting facilities, and sometimes it is sufficient when the trades should be conducted quickly. However, whenever I need a second opinion, I check TradingView.

The selection of the platform is not limited to what is being used by everyone. It is about what seems good on your hands. The more knowledge you have about your tools the more comfortable you will feel taking the trades. In my view, the appropriate platform de-stressed the trading process and all in all, made it less cumbersome.

 

Backtesting Your Strategies

The lesson I learned the hard way is that a trading idea sounds good on paper, but not worth much in real life. I recall being excited about a set-up that I saw on the internet. I just leaped and found myself seeing my account dwindle. The lesson learned through such experience was the importance of backtesting.

I use backtesting whereby I go back and test a strategy on historic market data to find out how it would have performed. I have been doing it several times by hand. I look at the past charts, fantasize about being in the now, and make my recordings of trades one by one. It is a bit time-consuming; however, it does help me to grasp the strategy. I experience the victories and the defeat and that season real understanding.

Subsequently, I began backtesting with automated classes to go faster. These tools can execute thousands of historical trades in seconds. It is as though your strategy is placed in a time machine, and you observe what is it composed of. I however would not even then just look at the numbers. I question whether I would have hung on to the plan in the bad runs. When it appeared that the process was not working, would I have trusted the process?

However, with no quality historical data, it would just be like driving blindfolded. It is not possible to make something better without the knowledge of how it has been doing. I keep my screenshots, record the results in the spreadsheets, and read all this on a regular basis. I consider it a report card to my trading brain.

Backtesting was a confidence-giver to me: it made me believe in my setups. It was a guessing game which made a planning. It made me escape much pain that would have been unnecessary and taught me a greater insight into the true nature of market behavior.

 

 

Educational Resources and Continued Learning

Recommended Books

When I was learning technical analysis for the first time, I was confused. Amount of charts, patterns, and indicators resembled a foreign language. The solution which can help me overcome the confusion was to read some good books that could explain things the way I could comprehend them. Among the initial books that I got hold of was Getting Started in Technical Analysis by Jack Schwager. It did not address me like I was stupid. It took me through the fundamentals using real-life examples that seemed to be like genuine cases in the market. The book provided me with a base that I rely on today.

Another difference-making one was Japanese Candlestick Charting Techniques by Steve Nison. It altered my perception of price charts. I was not seeing only colors and bars anymore, but emotions: panic, greed, hesitation. It brought charts to life as though I was reading the judgment of the price.

As far as the effects of understanding more indicators are concerned, however, I can only honestly say that they were not as critical in my trading as I thought. It was as a result of setting my mindset. I had issues with self-discipline and FOMO, which only kept losing me money. This is when I came across the Trading in the Zone book written by Mark Douglas. It was not only that book that taught me about charts. It helped me to learn more about myself. It taught me that the patience and self-control of a trader have a bigger role to play in the success of trading than choosing the best entry.

The reading also assisted in reducing the noise in my mind and creating a trading ritual that was helpful to me. Do not miss the books, even when you are a newbie. They are nontalking teachers, yet they make clamor.

 

Online Learning Platforms

When I started to take trading seriously, I found out that I could not only watch YouTube clips or random tweets to learn. I was the type of learner who required a system to learn and that is when I began trying online learning systems. I think some of the most valuable lessons I have ever taken did not cost any money but were provided through the free platform, which was easy to follow and obsolete.

I recall that one day I happened upon Binance Academy at the end of the day. I thought that I would find a brief article about chart patterns but I ended up spending hours in their mini-courses. They present things in easy terms and I enjoyed the fact that I was able to learn at my own pace and yet I did not feel overburdened. Coinbase Learn contributed as well, initially. They will even provide a couple of dollars worth of crypto as a reward when you complete short lessons, which added some types of extra motivation to me.

At some point, I was hoping to take it a step further and thus bought some paid courses in Udemy. The course that I chose was devoted to the technical analysis of cryptos in particular, which allowed me to realize how the tools could be utilized on real charts. Seeing what was being said was not the only thing that was important to me the ability to rewind, replay, and make notes my own way made all the difference.

When you are new in the field or, at least, you want to hone your skills, you need not become bankrupt. I have come to understand that free stuff could even carry you very far, and when you choose to buy paid course, ensure that it is what suits you. No two people are the same in learning. In my case, a combination of short videos, real examples of graphs, and lessons step by step served best.

 

Practice Platforms

Next to all the wisdom in the world, practicing without printing a cent is one of the most clever decisions I made when entering criticism of crypto trading at first. I employed a simulator app that provided me with counterfeit finances to deal with live markets. Those are the hard lessons that I learned that way without going through my savings. I recall my initial experience when I saw my fake portfolio crashing overnight. It was quite real. And that is what it is about- it trains you how to cool down, how to think, and how to plan better the next time.

If you are brand new, then start off with something like CryptoSim and the like. They allow you to experiment with strategies at no pressure. Personally, I took weeks to get to know a variety of indicators, track the trajectory of the charts, and find my confidence only to do it with real crypto. It was not glamorous but it worked.

Being a part of a community assisted me quite well. I discovered a crypto community in Discord which was open to beginners. Initially, I simply read what they chatted about without commenting and learned through their posts. But already I was questioning and even received some feedback on my charts. The accessibility of more experienced traders was the difference. I have even gotten a mentor who taught me how to avoid emotion in trades. It was that type of direction that I could never achieve through a book or course itself.

Do you really want to grow as a trader? Stop, put down the simulator, and get the time to practice it and locate your people. It does not matter whether you get it wrong at the start. It is not important who they are but instead learning with them before they get you real money.

 

 

Tax Considerations in Crypto Trading

When I began to trade in crypto, I never realized that my actions would make my next tax bill. I figured that I was safe as long as I was not cashing out. It was an error on my part. I got to know the hard way that simply exchanging one coin with another or purchasing an item with crypto could qualify as a taxable event.

When I sold a coin, whether to capture some profits and roll those into some other token or to capture some profits somewhere, this created a tax event. What is important is whether I gained or was at a loss on that deal. Provided I would sell it in less than a year after I had it in my possession it was treated as short-term capital gain. That was taxed in the same way as earned income. However, when I made gains by holding more than a year, then they were considered long-term, and the lower rate was more common. That caused me to consider more closely when and why I sold.

The thing that really took me out of the woods was to have good records. I began to pay attention to each and every trade, each and every exchange, and each and every transfer of a wallet. I had a table of dates, values, and reasons for every move. At first, it seemed excessive but later during tax season, I was grateful I had it. I also obtained a crypto taxation program that downloaded all my trades on exchanges and organized them on my behalf.

My advice to any new inhabitants is to start treating their crypto as a small business. Each deal may matter. It is so much easier to remain great and fully organized at the earliest stage of life. It is not only to avoid getting into trouble. It is all about peace of mind and ensuring that you are left to concentrate on the trading instead of scampering around in the next few months trying to justify things.

 

 

Conclusion

Reflecting on my experience with entering the world of crypto trading, I understand to what extent technical analysis redefined my choices. They are not only about charts or lines. It is realizing what is behind the price. To me, it created chaos that I could actually read and respond to. I had ceased to guess. I began to figure.

It is not an overnight skill that was learned. I did wrong. I hunted trades. I was blind to cues. However; I kept at it. I continued to learn, read, test, and re-adjust. I also understood that risk management was not an optional thing. Its absence could still make an excellent analysis end in losses. I needed to remain disciplined even when it meant emotions came into play.

I want to say this to you, in case you are just starting out. Do not aim to do everything all at once. Start small. Sign up for an online demo account. Read the charts. Watch what can take place upon the emergence of some signs. Never gamble on what you can not afford to lose. First, install confidence. Become on that foundation.

The technical analysis took the power away. It made me look at the market in a more objective way. And it can do that to you too- if you will take the time. Keep learning. Keep improving. Lessons can be found in every chart. Each trade offers an opportunity to improve.

 

 

 

Read Also: How To Secure Your Crypto Assets

 

 

 

 

Frequently Asked Questions