Unlocking the Secrets of Trading Fundamentals: A Dive into Technical Analysis

December 18, 2023

Wondering what the buzz is about technical analysis and trading fundamentals? Well, grab your popcorn because we’re about to demystify this trading discipline with a splash of humor! Say goodbye to mind-bending jargon and hello to an easy-breezy understanding of the ins and outs of technical analysis (TA).

As you probably have noticed, we started publishing more trading content since last summer. We’ve posted and tweeted for the past 6 months that the bear is nearing its end, and it’s time to jump back into crypto. We’ve been calling the mayor coins, but we also cover some mem ecoins occasionally like last week’s $BONK. This last niche in crypto is more for degens and you can throw trading fundamentals out the window. But let’s get started with the basics.

If you’re new to this, make sure to also check our part 2 & part 3 on trading fundamentals.

Your Start With Trading Fundamentals

So, What’s Technical Analysis? Imagine you’re Sherlock Holmes, but instead of solving crimes, you’re deciphering the mysteries of the stock market. That’s technical analysis in a nutshell! No need for a magnifying glass—just some charts, trends, and a sprinkle of statistical magic.

Understanding the Techy Side Forget about snoozefest financial statements and earnings reports. Technical analysis skips the boring stuff and dives straight into the action—price movements and volume. It’s like reading the tea leaves of the stock market, predicting future shenanigans based on past escapades.

Back in the 1800s, Charles Dow and his Dow Theory laid the groundwork for technical analysis. Since then, it’s evolved faster than a Pokémon, with researchers like William P. Hamilton adding their two cents. Today, we’ve got a treasure trove of patterns and signals to play with.

Important to Know

Indicators: The Cool Kids of Techville In the vast universe of technical analysis, there’s a galaxy of indicators and patterns. Trendlines, channels, moving averages—they’re like the cool kids in the trading block. Some are all about spotting trends, while others gauge trend strength and predict the future. It’s like having a crystal ball, only cooler.

Here are some we like to work with:

Under the Hood: Assumptions Galore Now, let’s peek under the hood of technical analysis. There are two camps in the trading world: fundamental analysis and technical analysis. The number-crunchers in fundamental analysis pore over financial statements, while the techies in technical analysis believe that a stock’s price spills all the beans.

Charles Dow dropped some wisdom bombs, stating that markets are efficient and prices move in patterns—even when they seem as random as a cat chasing its tail. Today, analysts follow three golden rules: everything’s already priced in, prices groove in trends, and history loves to repeat itself.

Patterns to Look For

Here’s an overview of Reversal and Continuation Patterns.

Print this, sleep with it, and memorize it. Because this is what you’re looking for when you’re trading crypto.

Final Thoughts

In a Nutshell Technical analysis isn’t just about charts and lines; it’s a dance with the market’s heartbeat. So, throw on your trading shoes and join the party. After all, who said making money couldn’t be a tad amusing? Happy trading!

If you want to learn more, you can try this free trading course: Babypips. It’s not designed for crypto specifically, but it translates to crypto very well.

If you enjoy our content, you can support us by signing up for a Bybit Account with our referral link. Don’t forget to claim your bonuses if you buy/sell or trade crypto.

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