Trading 101

Trading 101

Trading 101

3 Types of Analysis.

You now know the why,  where and how of cryptocurrency trading, but you are not ready to make money yet. Knowing when to place a BUY / SELL order is not a science, but rather a finely honed skill. To make successful trades, you need to analyse and develop ideas to trade the market.

Are you ready to dive in?

Remember that the learning never ends and the important part of the analysis is that you constantly become more aware and as a result improve your knowledge of the particular industry.

Basic Market Analysis Strategies

Many traders favour certain strategies and believe that some are more applicable to the cryptocurrency industry. This may hold true for some, but we believe striking a balance is the ultimate objective for any new traders. There are 3 basic types of analysis:

  1. Fundamental Analysis
    Fundamental analysis is a method to view the market by analysing economic, political and social factors that may affect the supply and demand of an asset. Using supply and demand as an indicator is easy, but the real skill lies in evaluating the factors that affect the supply and demand of an asset.
  2. Technical Analysis
    You can think of technical analysis as more of a mathematical approach. Most of us immediately think of charts, yet we need to keep in mind,  when two people look at the same chart, they may have two completely different strategies. Technical analysis or TA for short is highly subjective.
  3. Sentiment Analysis
    This type of analysis is important because everyone is different. Furthermore, we may have different opinions of why a market reacts in the way it does. This is a more personal and again very subjective approach but has a valuable impact on your overall trading strategy. The ability to gauge a market on sentiment (bullish or bearish) could be the difference between making a million and a hundred million.

Which One is Best?

There is no one single approach which is best. In order to be a successful trader, you need to employ a combination of all three strategies. They work hand-in-hand to help you achieve trading greatness!

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