Analysis Basis - Analysis in BTCUSD Trading

Technical analysis for Bitcoin trading always comes down to three main things. When you look at Bitcoin price charts, these three factors pop up again and again in the market:

Bitcoin Prices Move in Trends
Market Price Action Discounts Everything
History Tends to Repeat Itself When it Comes to Bitcoin Price Moves

Prices Move in Trends

Bitcoin price movements follow trends - a market trend is a general price direction either upward or downward. In Bitcoin, the prices of Bitcoin follow trends. This means that once a market trend in a particular direction is formed, then the prices keep heading in that particular direction for a period of time. The future movement direction of the price is likely to be in the same market direction as that of the Bitcoin price trend than for it to be against it. Most of the Bitcoin strategies are based around this market concept.

Therefore analysis in will be the study of how to figure out this price trend so as to know and determine which direction the prices of Bitcoin are likely to head and move to next & henceforth help the online trader to know which side of the trade to take.

Price Action Discounts Everything

In trading analysis, the only thing considered when it comes to this trading analysis is the market price movement or what's commonly referred to as price action. Technical analysis study assumes that at any given time, the price of Bitcoin reflects everything which has or could affect the movement of the Bitcoin prices. This trading analysis therefore only studies the price action - which is the product of Supply and Demand of Bitcoin.

History Tends to Repeat Itself When it Comes to Price Moves

History tends to repeat itself mainly in the chart patterns of the price action. This repetitive nature of the price patterns is attributed to investor and trader psychology. This is because the online traders participating in the trading of Bitcoin tend to provide a consistent reaction to the market for most of the time. Technical analysis study uses these price patterns that are commonly referred to as chart patterns to analyze and interpret the movement of Bitcoin prices. Although the chart patterns represent historical data, these trading analysis patterns are still relevant because they show patterns which often repeat themselves.

Understanding analysis when trading Bitcoin prices can be a helpful method which the online traders can use in determining when the market is trending and when it is not trending. When Bitcoin prices are trending strongly in a specific direction, as a BTC/USD trader, you should consider entering trades that follow this trend. However, if the market is not trending, it's best to avoid trading, as frequent whipsaws in such conditions can lead to potential losses.

Unfortunately, most of the BTC/USD Crypto traders try to fight the market trends and buy or sell in the direction that is the in the opposite market trend of these trends - in an effort to pick a market top or a market bottom, only to see the market move further in direction of the continuing trend.

Another common mistake that traders often make when they are caught up in the wrong market direction is to add onto losing positions in the hope that once the trend reverses they will make money back faster by averaging down their losses.. This is however not a good trading strategy especially in a strongly trending market - it is something which the experienced traders never do, because they know that once prices start heading in a particular direction they continue moving in that particular direction for quite some time. "The Trend is Your Friend" is a popular saying among investors, never go against the trend.

This trading analysis study helps alert traders and investors to strong setups for bitcoin trades. Use them to know when to enter BTCUSD positions. Profits come from solid methods to spot trend direction and trade along with it. Markets have no guarantees, though. BTCUSD traders must practice to build reliable patterns for profitable online trades. One way is to open a demo account. Test strategies there until you learn to make profits with high-probability setups. Do this after studying key trading analysis ideas for BTCUSD.

About Analysis

With so many investors & traders using the same analysis tools, the analysis becomes a self fulfilling prophecy. This is because if so many investors use the same level as a buying point, the Bitcoin price then moves upwards as everyone makes similar moves at the same time.

The next question is how long these moves will last and hence traders must develop methods understanding Bitcoin chart moves so that as they can know how to figure out when to open and when to close their Bitcoin trades.

When you analyze Bitcoin prices, you usually look at charts alongside certain indicators. Traders hunt for patterns that have shown up before, under similar circumstances. If those same patterns pop up again, traders use them as a signal - maybe it's time to buy, maybe it's time to sell. The logic is pretty simple: if this setup worked in the past and pushed the price in a certain direction, the odds are better that it'll play out the same way again.

Learning How to Trade Bitcoin Prices Successfully with Technical Analysis

To know how to trade Bitcoin successfully using analysis it is important to understand the 3 strategies outlined below:

Bitcoin prices will always follow a market trend which can be identified by looking at the market price patterns of Bitcoin prices. In financial trading, Bitcoin as well as other instruments the only proven method to consistently earn profits in the online markets is by following a trend. "The Trend is Your Friend" is a popular saying among investors & traders because following trends when chart patterns is the most consistent method of making profits when trading Bitcoin Cryptocurrency and other financial instruments, as a btc/usd trader, never go against the trend.
The market forces of supply and demand for Bitcoin will drive the prices of Bitcoin up or down depending on the current factors. The demand for Bitcoin may go up when the world economy is doing well and people have more money to spend on luxury items and also for investing. Technical analysis study will seek to measure these demand supply forces based on the current chart patterns of Bitcoin prices and with the help of the various indicators. The supply and demand of Bitcoin will be reflected in the Bitcoin price action - therefore by simply looking at price movements traders can predict which direction the price of Bitcoin is likely to head towards. Traders also can use an additional technical indicator such as the MA, the RSI or support & resistance levels indicator to help them determine the next likely direction of the Bitcoin price charts.
The market not only indicates the history of the past prices, but also will follow the trend which was in place until its direction reverses. Traders can use indicators such as the moving averages, Bollinger bands or trend-lines trading analysis tools & indicators to help them determine current trend direction.

When the market lacks direction and moves sideways, it consolidates. No clear trend exists then. BTCUSD crypto traders should wait for consolidation to end. Prices just bounce around one spot without going anywhere specific.

Once the consolidation stops, prices will start heading in one or the other direction and new trends will be formed and traders can start placing trades in direction of the newly formed trend.

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