The Golden Rules of Technical Analysis (Part 1) “The Four Key Principles of Technical Analysis”

The Golden Rules of Technical Analysis (Part 1) “The Four Key Principles of Technical Analysis”

Let’s dive into the world of crypto and practice trading in the Trading Simulator to find suitable investment strategies. It is necessary to understand the four key principles of technical analysis before learning how to use tools for trading. The important principles include:

Technical analysis is quantitative analysis.

Technical analysis involves analyzing quantitative factors. Investment analysis can be divided into two forms: fundamental analysis, which is a qualitative analysis that may not have numerical indicators, and technical analysis, which is a quantitative analysis that includes numerical indicators, such as market prices. In other words, technical analysis reflects the emotions of buyers and sellers in the market.

Price reflects everything in the market.

One of the theories of technical analysis is that “price discounts everything.” The prices traded in the market are considered to reflect fundamental factors, current news events, and market sentiment at that time. Therefore, traders should not rely on emotions but use reasoning as the basis for their decision-making.

Charts are used to analyze price trends.

Price trends can be divided into three categories: uptrend, downtrend, and sideways. One of the important tasks of technical analysis is to use charts to analyze price trends to apply appropriate trading tools and strategies. If the trend can be accurately read, it increases the chances of successful trading.

Technical analysis is used for trading planning.

After understanding the price trend, technical analysis can be used to plan trading strategies. Traders should read the indicators to determine suitable buying points, selling points for making profits, and cut-loss points if the price trend does not align with the predicted direction.

These are the four key principles of technical analysis that traders must understand before entering the actual market. You can practice trading in the trading simulator if you are still unready. It is comparable to understanding the fundamental philosophy of a subject before proceeding to the next lesson.

⭐ Build confidence in investing before spending real money.

It is said that every investment has risks, but a risk-free investment is an investment in knowledge with a trading simulator that won’t make you lose a single penny but will help you gain more knowledge and understanding of your own investment behaviour.

▶️How to Join the Trading Simulator Feature

*Cryptocurrency and Digital tokens are highly risky; investors may lose all their investment money. Investors should study all the information carefully and make investments according to their own risk profile.

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