Cryptocurrency trading can be extremely rewarding, especially when the returns are exaggerated by using leveraged trading such as BXB’s tap trading platform. Before jumping in, users should know some basic technical analysis to help get a step ahead.
First things first: Technical analysis (TA) is a tool to better predict future market
behavior, but it is not a crystal ball. Nothing is a guarantee in the rollercoaster that is the cryptocurrency market. That being said, you want to have as many tools at your disposal in order to maximize your potential gains from cryptocurrency trading.
Let’s look at a few main types of TA that you should familiarize yourself with:
Basic Trend Lines
Basic trend lines are the simplest form of TA and a great place to start for beginning traders. These lines are used to identify “bearish” and “bullish” trends, and confirm the trend is continuing. Uptrends will act as a “support” level, and downtrends will act as a “resistance” level. The trend line is usually tested several times before being broken, and a break often is a signal for a trend reversal.
Another simple but helpful TA tool is called moving averages. This line is created by averaging out the price of a currency or coin over a certain period of time. This helps us to see if there is a recent trend when compared with a larger set of data. For example, if the moving average line of the last week breaks upward through the moving average line of the last month, it is a common signal for a “bull” trend.
An extremely important aspect of TA is to always keep the trading volume of any movement in mind. Big movements in the market with very low trading volume is often not the sign of a strong trend, and commonly the trend does not last. On the other hand, when a trend is supported by extremely high trading volume, it is much more likely to continue.
There are tons of TA basics to learn and become comfortable with, and recognizing trends will get easier over time. You’ll find that with BXB’s quick and easy tap trading, you’ll be able to see huge returns from applying simple technical analysis in real-time.