Crypto Trading

Get More Profits Through the Application of Technical Analysis in Crypto Trading

Trading
• Digitex
April 12, 2021

Technical analysis is among the most useful tools for traders, which especially comes in handy when day trading crypto.

For that reason, incorporating technical analysis into your crypto trading strategies is an excellent way to increase your chances for profits on the digital asset market.

In this article, we will explain what technical analysis is, how it is different from fundamental analysis, and what are the advantages and downsides of using it to discover crypto trading signals.

Let’s dive in!

What Is Technical Analysis And How Is it Different From Fundamental Analysis?

Technical analysis refers to the practice of evaluating investments and identifying trading signals by studying trends related to trading activity (e.g., price movement).

Simply put, it helps traders predict future price movements as well as decide whether to enter a position, when and for how long.

Technical analysis usually involves using multiple charting tools and indicators – such as the Relative Strength Index (RSI), the Money Flow Index (MFI), and the Moving Average Convergence Divergence (MACD) – to spot as well as interpret market trends and signals.

Fundamental analysis focuses on identifying an asset’s true value by analyzing its financial data (e.g., sales and earnings), the industry’s condition, and even general statistics about the economy.

On the other hand, technical analysis aims to find how the supply and demand on the market impact an instrument’s price, volume, and volatility.

Also, while fundamental analysis is best used for mid-to-long-term investments, technical analysis can be incorporated into day trading strategies.

Below, you can find the three fundamental principles of technical analysis in trading:

  1. The market prices everything: From a company’s financial data to market sentiment, everything is priced into an asset, according to technical analysts. The only exception is price movements, which are the products of supply and demand for a certain asset.
  2. Prices move in trends: Technical analysts believe that the market rarely moves erratically. Instead, no matter the timeframe used, they assume that prices exhibit trends.
  3. History often repeats itself: Based on market psychology, price movements regularly repeat themselves throughout time due to emotions like fear, excitement, and greed. Technical analysis evaluates these emotions via chart patterns to understand trends and predict future price movements.

What Are the Pros and Cons of Technical Analysis in Crypto?

Technical analysis has been widely popular among traders in the crypto industry. And for a very good reason.

While fundamental analysis works great for general market assets like stocks and bonds, it’s very hard to determine the intrinsic value of cryptocurrencies.

For that reason, technical analysis is a better choice to identify crypto trading signals, especially if we take the high volatility of the asset class into account, which makes it an excellent option for day traders.

Furthermore, technical analysis allows traders to identify and respond to market changes quickly.

With hundreds of indicators to choose from, traders can customize their crypto trading strategies to fit their preferences by leveraging technical analysis.

Combining trading knowledge, practice, and the right tools allows traders to accurately predict future digital asset price movements in most of their trades.

As with every trading practice, technical analysis has its own limitations.

One of its main downsides is related to market behavior, which can be unpredicted on certain occasions. For that reason, technical analysis can’t provide 100% accurate crypto trading signals for users.

Moreover, with so many tools to choose from, it’s hard for beginners to learn the ropes and select the indicators that best fit their crypto trading strategies. Also, some technical analysis tools are more reliable and precise than others.

Closing Thoughts

Along with fundamental analysis, technical analysis is among the most popular practices to evaluate financial decisions.

While the prior evaluates data to calculate the true value of assets to spot the ones trading at a discount, technical analysis is based on an asset’s price charts, identifying patterns to predict future price movements using historical market data and statistics.

However, while it’s nearly impossible to determine the intrinsic value of digital assets, technical analysis tends to work better for crypto traders.

Are you looking to learn more about crypto trading?

Check out the following articles to learn how the Bitcoin volume impacts traders, what the best crypto trading strategies are, and how to profit from scalping futures.

In case you are ready to test your skills, be sure to check out the zero-fee Bitcoin futures exchange Digitex to trade crypto for free!

April 12, 2021
Trading

Get More Profits Through the Application of Technical Analysis in Crypto Trading

Digitex
Crypto Trading

Technical analysis is among the most useful tools for traders, which especially comes in handy when day trading crypto.

For that reason, incorporating technical analysis into your crypto trading strategies is an excellent way to increase your chances for profits on the digital asset market.

In this article, we will explain what technical analysis is, how it is different from fundamental analysis, and what are the advantages and downsides of using it to discover crypto trading signals.

Let’s dive in!

What Is Technical Analysis And How Is it Different From Fundamental Analysis?

Technical analysis refers to the practice of evaluating investments and identifying trading signals by studying trends related to trading activity (e.g., price movement).

Simply put, it helps traders predict future price movements as well as decide whether to enter a position, when and for how long.

Technical analysis usually involves using multiple charting tools and indicators – such as the Relative Strength Index (RSI), the Money Flow Index (MFI), and the Moving Average Convergence Divergence (MACD) – to spot as well as interpret market trends and signals.

Fundamental analysis focuses on identifying an asset’s true value by analyzing its financial data (e.g., sales and earnings), the industry’s condition, and even general statistics about the economy.

On the other hand, technical analysis aims to find how the supply and demand on the market impact an instrument’s price, volume, and volatility.

Also, while fundamental analysis is best used for mid-to-long-term investments, technical analysis can be incorporated into day trading strategies.

Below, you can find the three fundamental principles of technical analysis in trading:

  1. The market prices everything: From a company’s financial data to market sentiment, everything is priced into an asset, according to technical analysts. The only exception is price movements, which are the products of supply and demand for a certain asset.
  2. Prices move in trends: Technical analysts believe that the market rarely moves erratically. Instead, no matter the timeframe used, they assume that prices exhibit trends.
  3. History often repeats itself: Based on market psychology, price movements regularly repeat themselves throughout time due to emotions like fear, excitement, and greed. Technical analysis evaluates these emotions via chart patterns to understand trends and predict future price movements.

What Are the Pros and Cons of Technical Analysis in Crypto?

Technical analysis has been widely popular among traders in the crypto industry. And for a very good reason.

While fundamental analysis works great for general market assets like stocks and bonds, it’s very hard to determine the intrinsic value of cryptocurrencies.

For that reason, technical analysis is a better choice to identify crypto trading signals, especially if we take the high volatility of the asset class into account, which makes it an excellent option for day traders.

Furthermore, technical analysis allows traders to identify and respond to market changes quickly.

With hundreds of indicators to choose from, traders can customize their crypto trading strategies to fit their preferences by leveraging technical analysis.

Combining trading knowledge, practice, and the right tools allows traders to accurately predict future digital asset price movements in most of their trades.

As with every trading practice, technical analysis has its own limitations.

One of its main downsides is related to market behavior, which can be unpredicted on certain occasions. For that reason, technical analysis can’t provide 100% accurate crypto trading signals for users.

Moreover, with so many tools to choose from, it’s hard for beginners to learn the ropes and select the indicators that best fit their crypto trading strategies. Also, some technical analysis tools are more reliable and precise than others.

Closing Thoughts

Along with fundamental analysis, technical analysis is among the most popular practices to evaluate financial decisions.

While the prior evaluates data to calculate the true value of assets to spot the ones trading at a discount, technical analysis is based on an asset’s price charts, identifying patterns to predict future price movements using historical market data and statistics.

However, while it’s nearly impossible to determine the intrinsic value of digital assets, technical analysis tends to work better for crypto traders.

Are you looking to learn more about crypto trading?

Check out the following articles to learn how the Bitcoin volume impacts traders, what the best crypto trading strategies are, and how to profit from scalping futures.

In case you are ready to test your skills, be sure to check out the zero-fee Bitcoin futures exchange Digitex to trade crypto for free!

Latest News

Trading Tools

5 of the Best Cryptocurrency Trading Tools

Digitex Futures
Trading
• Christina Comben
March 14, 2020

Anyone with skin in the game has heard of CoinMarketCap or Coinbase. For many of us, the price of BTC, ETH, and DGTX are the first things we look at in the morning (even before checking the time. But if you’re regularly trading cryptos, you don’t need to do it alone. There are plenty of great cryptocurrency trading tools that can help. 

It’s All About Managing Risk

Any trader knows that one of the keys to being on their game is getting good at risk management. And when it comes to crypto, that’s almost like breaking in a wild mustang! After all, how do you tame a bucking bronco? If you go in blind, the raging animal will almost certainly stomp right over you. But what if you tried again armed with the knowledge of a well-trained expert?

Wild animals, just like crypto, are unpredictable. But you can start to identify patterns. Using the right tools will show you how to read the markets, how to make use of the price fluctuations between exchanges, and take an educated decision about when to buy or sell. You can even make profits not just when the price swings up, but when it tumbles back down again. You just need a little help.

Want to buy DGTX ahead of the mainnet launch? You can do it easily and straight from us through the Digitex Treasury. We offer an instant trustless transaction with no slippage and no need to go through an exchange. Simply click below.

BUY DGTX
Cryptocurrency Trading Tools Everyone Can Use

There’s a plethora of cryptocurrency trading tools out there and it really depends on your personal tastes and needs as to which you prefer. Many traders use several different tools depending on what they want to know and which metric they’re trying to gauge. However, the following five are ones that every trader should have in their arsenal. 

1. TradingView

You can’t trade crypto without being part of TradingView. This is one awesome platform that provides immense value to both traders and investors. Beyond insightful commentary, a killer forum, and useful tips and tricks from successful traders, there’s also a host of excellent tools on hand.

Learn from others the types of strategies they use, as well as how well they work for them. Share comments and feel like part of a trading community, so you’re not just alone at your keyboard all day! 

You’ll see in-depth trading analysis in the shape of charts and historical comparisons (as well as which traders get it right more often) and gain valuable overall market analysis. There’s also a bunch of info on stocks and forex, but the bulk of TradingView commentary is on crypto. 

This is a site for seasoned traders as well as newcomers, however, it’s especially useful for those who want to know how to compile a technical analysis and build up their trading knowledge.

2. CoinGecko

If you’re really new to trading and looking for a tool that doesn’t come with all the bells and whistles of TradingView, be sure to check out CoinGecko. One of the best things about this tool (besides being simple and streamlined) is the fact that it’s completely free and you’ll get an at-a-glance overview of the best performing cryptos on the market. Think of it as a couple of steps up from CoinMarketCap. 

Not only do you get to see quickly how well each coin or token is performing but CoinGecko also uses key trading features, such as market capitalization, public interest, liquidity, and how much developer activity there is on the blockchain to come up with its rankings.

You can take as much or as little as you want from this tool, as it even tracks community engagement with each currency, as well as provides historical data and information on mining difficulty, should you be interested. 

This is more of a tool for investors since it allows you to decide whether a project ticks all the boxes you need to feel confident in your investments.

3. Cryptowatch

Owned by Kraken, Cryptowatch presents another free charting resource that lets you track your favorite cryptocurrencies. You can check the charts and prices from all major exchanges, including Bitfinex, Bittrex, Bithumb, and Coinbase Pro. 

Cryptowatch gives you one up on the market since you can watch any given comparison, say, for example, the BTC/JPY chart, and compare it to the BTC/USD. By doing this, you can glean whether certain markets are front-running others–and step ahead of large orders to gain an economic advantage.

You can also use some of the most common trading indicators such as RSI (Relative Strength Index), exponential moving averages, MACD (Moving Average Convergence Divergence), and many more. Cryptowatch is right up there with TradingView in value, although is probably more suited to seasoned traders.

4. Bitcoinity

Bitcoinity has several key features to it that short-term traders will especially like. For example, it displays combined cryptocurrency order books, as well as shows the arbitrage between cryptocurrency exchanges through an easy-to-read arbitrage table. 

By visualizing the price difference between exchanges on Bitcoinity’s table, traders can capitalize through arbitrage trading. So, for example, let’s say that the price of Bitcoin was $3,800 on one exchange and $3,850 on another. The trader could simultaneously buy from one exchange and sell on another while capitalizing on the $50 difference in price.

Of course, that’s an extreme example since most exchanges display very similar prices. However, many traders use arbitrage to build up small profits over time.

Another useful feature of Bitcoinity is its tool that shows combined liquidity across all major exchanges. This allows traders to assess support and resistance levels and, for more experienced traders, calculate the price-point where major liquidity lies.

So, let’s say that the price of Bitcoin was $9,000 and there were 50,000 bitcoins on the buy-side of the order book, but 80,000 on the sell-side. That could be a sign of sell-pressure mounting which could drive price action down.

5. TensorCharts

Once you’re feeling comfortable with TradingView or Cryptowatch, TensorCharts makes a good next stop. It’s another free tool, but not for completely novice traders. Some of the advanced charts here might make your head spin if you’re not sure what to look for. 

Like Bitcoinity, you can see all the major cryptocurrencies. But TensorCharts uses order book heatmaps. These heatmaps pool data from order books across several different exchanges and display red and green blocks for orders waiting to be filled on either side.

This is an excellent way for traders to foresee price-action and get a decent impression of what the market makers are doing. There are several good videos explaining how TensorCharts works, so if you’re interested in taking your game up a gear, check this one out below.

https://www.youtube.com/watch?v=DUkFI5CaA7A

Want to try your hand at trading commission-free on the Digitex Futures exchange? With the beta version handling insane volume and the Trading Battle on every day, you can practice your skills on our trading ladder interface and hone your strategy before the mainnet release on April 27, 2020.

JOIN NOW
The Takeaway

Check out these awesome tools to add to your trading arsenal today. But do your own research as well. The type of tools a trader uses depends on their strategy, requirements, and experience. These five are just meant to get you started!

 

March 14, 2020
Digitex Futures
Trading

5 of the Best Cryptocurrency Trading Tools

Christina Comben
Trading Tools

Anyone with skin in the game has heard of CoinMarketCap or Coinbase. For many of us, the price of BTC, ETH, and DGTX are the first things we look at in the morning (even before checking the time. But if you’re regularly trading cryptos, you don’t need to do it alone. There are plenty of great cryptocurrency trading tools that can help. 

It’s All About Managing Risk

Any trader knows that one of the keys to being on their game is getting good at risk management. And when it comes to crypto, that’s almost like breaking in a wild mustang! After all, how do you tame a bucking bronco? If you go in blind, the raging animal will almost certainly stomp right over you. But what if you tried again armed with the knowledge of a well-trained expert?

Wild animals, just like crypto, are unpredictable. But you can start to identify patterns. Using the right tools will show you how to read the markets, how to make use of the price fluctuations between exchanges, and take an educated decision about when to buy or sell. You can even make profits not just when the price swings up, but when it tumbles back down again. You just need a little help.

Want to buy DGTX ahead of the mainnet launch? You can do it easily and straight from us through the Digitex Treasury. We offer an instant trustless transaction with no slippage and no need to go through an exchange. Simply click below.

BUY DGTX
Cryptocurrency Trading Tools Everyone Can Use

There’s a plethora of cryptocurrency trading tools out there and it really depends on your personal tastes and needs as to which you prefer. Many traders use several different tools depending on what they want to know and which metric they’re trying to gauge. However, the following five are ones that every trader should have in their arsenal. 

1. TradingView

You can’t trade crypto without being part of TradingView. This is one awesome platform that provides immense value to both traders and investors. Beyond insightful commentary, a killer forum, and useful tips and tricks from successful traders, there’s also a host of excellent tools on hand.

Learn from others the types of strategies they use, as well as how well they work for them. Share comments and feel like part of a trading community, so you’re not just alone at your keyboard all day! 

You’ll see in-depth trading analysis in the shape of charts and historical comparisons (as well as which traders get it right more often) and gain valuable overall market analysis. There’s also a bunch of info on stocks and forex, but the bulk of TradingView commentary is on crypto. 

This is a site for seasoned traders as well as newcomers, however, it’s especially useful for those who want to know how to compile a technical analysis and build up their trading knowledge.

2. CoinGecko

If you’re really new to trading and looking for a tool that doesn’t come with all the bells and whistles of TradingView, be sure to check out CoinGecko. One of the best things about this tool (besides being simple and streamlined) is the fact that it’s completely free and you’ll get an at-a-glance overview of the best performing cryptos on the market. Think of it as a couple of steps up from CoinMarketCap. 

Not only do you get to see quickly how well each coin or token is performing but CoinGecko also uses key trading features, such as market capitalization, public interest, liquidity, and how much developer activity there is on the blockchain to come up with its rankings.

You can take as much or as little as you want from this tool, as it even tracks community engagement with each currency, as well as provides historical data and information on mining difficulty, should you be interested. 

This is more of a tool for investors since it allows you to decide whether a project ticks all the boxes you need to feel confident in your investments.

3. Cryptowatch

Owned by Kraken, Cryptowatch presents another free charting resource that lets you track your favorite cryptocurrencies. You can check the charts and prices from all major exchanges, including Bitfinex, Bittrex, Bithumb, and Coinbase Pro. 

Cryptowatch gives you one up on the market since you can watch any given comparison, say, for example, the BTC/JPY chart, and compare it to the BTC/USD. By doing this, you can glean whether certain markets are front-running others–and step ahead of large orders to gain an economic advantage.

You can also use some of the most common trading indicators such as RSI (Relative Strength Index), exponential moving averages, MACD (Moving Average Convergence Divergence), and many more. Cryptowatch is right up there with TradingView in value, although is probably more suited to seasoned traders.

4. Bitcoinity

Bitcoinity has several key features to it that short-term traders will especially like. For example, it displays combined cryptocurrency order books, as well as shows the arbitrage between cryptocurrency exchanges through an easy-to-read arbitrage table. 

By visualizing the price difference between exchanges on Bitcoinity’s table, traders can capitalize through arbitrage trading. So, for example, let’s say that the price of Bitcoin was $3,800 on one exchange and $3,850 on another. The trader could simultaneously buy from one exchange and sell on another while capitalizing on the $50 difference in price.

Of course, that’s an extreme example since most exchanges display very similar prices. However, many traders use arbitrage to build up small profits over time.

Another useful feature of Bitcoinity is its tool that shows combined liquidity across all major exchanges. This allows traders to assess support and resistance levels and, for more experienced traders, calculate the price-point where major liquidity lies.

So, let’s say that the price of Bitcoin was $9,000 and there were 50,000 bitcoins on the buy-side of the order book, but 80,000 on the sell-side. That could be a sign of sell-pressure mounting which could drive price action down.

5. TensorCharts

Once you’re feeling comfortable with TradingView or Cryptowatch, TensorCharts makes a good next stop. It’s another free tool, but not for completely novice traders. Some of the advanced charts here might make your head spin if you’re not sure what to look for. 

Like Bitcoinity, you can see all the major cryptocurrencies. But TensorCharts uses order book heatmaps. These heatmaps pool data from order books across several different exchanges and display red and green blocks for orders waiting to be filled on either side.

This is an excellent way for traders to foresee price-action and get a decent impression of what the market makers are doing. There are several good videos explaining how TensorCharts works, so if you’re interested in taking your game up a gear, check this one out below.

https://www.youtube.com/watch?v=DUkFI5CaA7A

Want to try your hand at trading commission-free on the Digitex Futures exchange? With the beta version handling insane volume and the Trading Battle on every day, you can practice your skills on our trading ladder interface and hone your strategy before the mainnet release on April 27, 2020.

JOIN NOW
The Takeaway

Check out these awesome tools to add to your trading arsenal today. But do your own research as well. The type of tools a trader uses depends on their strategy, requirements, and experience. These five are just meant to get you started!

 

Latest News

Why Do Most Traders Prefer Technical Analysis Over Fundamental Analysis? 1

Why Do Most Traders Prefer Technical Analysis Over Fundamental Analysis?

Digitex Futures
• Dave Reiter
July 30, 2019

In 1989, Jack Schwager published a book called Market Wizards. The book was based on a series of interviews that Schwager conducted with several of the most successful traders in the world. All the traders in the book had one thing in common; it took many years of practice to become profitable and successful. Each trader admitted to losing money for the first several years of their trading careers. In terms of trading styles, the traders developed their own unique approach to trading the markets. Some of the traders focused on fundamental analysis. However, the majority of the traders focused on technical analysis. Continue reading

July 30, 2019
Digitex Futures

Why Do Most Traders Prefer Technical Analysis Over Fundamental Analysis?

Dave Reiter
Why Do Most Traders Prefer Technical Analysis Over Fundamental Analysis? 2

In 1989, Jack Schwager published a book called Market Wizards. The book was based on a series of interviews that Schwager conducted with several of the most successful traders in the world. All the traders in the book had one thing in common; it took many years of practice to become profitable and successful. Each trader admitted to losing money for the first several years of their trading careers. In terms of trading styles, the traders developed their own unique approach to trading the markets. Some of the traders focused on fundamental analysis. However, the majority of the traders focused on technical analysis. Continue reading

Latest News

A Closer Look at Digitex Futures Exchange Features 3

A Closer Look at Digitex Futures Exchange Features

Digitex Futures
Trading
• Christina Comben
March 6, 2019

As you may have heard by now, Digitex has partnered with Spotware software developers to finalize our product for the public launch. With years of experience creating trading platforms for brokers, the team behind the popular Forex trading platform cTrader is an invaluable addition to our fold. Let’s take a look at some of the extra features this partnership allows us to bring you in the exchange. Continue reading

March 6, 2019
Digitex Futures
Trading

A Closer Look at Digitex Futures Exchange Features

Christina Comben
A Closer Look at Digitex Futures Exchange Features 4

As you may have heard by now, Digitex has partnered with Spotware software developers to finalize our product for the public launch. With years of experience creating trading platforms for brokers, the team behind the popular Forex trading platform cTrader is an invaluable addition to our fold. Let’s take a look at some of the extra features this partnership allows us to bring you in the exchange. Continue reading

Latest News