Concerning the use of traditional technical analysis (mathematical approach) in the crypto-currency markets, there are serious disputes, although it has been relatively successfully used in the stock and currency markets. In the crypto-currency community, half of the traders believe that for the market it does not apply to crypto-currency due to the other nature of crypto-economy, and the other half is sure that this approach can be used here. The choice is yours.
The most accessible for beginners are simple strategies based on technical analysis. They are built on easily determined patterns of movement of quotations, crypto-currencies, indicators, fundamental factors and news. There are many different means with which to analyze the digital market. Most of the simple strategies based on technical analysis, one way or another, are related to the indicator Moving average (moving averages). Lines produce a mathematical averaging of the price taken for a certain period. As the exchange rate changes, the value grows or falls, which makes it possible to determine the general trend of the movement of the crypto-currency instrument in the future and to make a profit, by simple mathematical calculation. The rules for using the moving average are quite simple: if the price is higher than the moving average, then the price increases, if lower, then falls.
Simple trading tactics rely not only on the Moving average, but also on the regularity of the movement of quotations on crypto-exchanges, which can be determined with the help of «Japanese candles». This type of graphical representation of the price allows you to track short-term trends in the market. An example of the use of «Japanese candles» is the so-called candle patterns, which are the «convolution» of the analyzed section of the graph in the transition to a larger period. Such patterns sometimes more clearly show the turning points and help in determining the direction of the trend.
Despite the existence of many different strategies, not all of them give positive results during trading. The main reason for failure is the occurrence of false trading signals, which entail losses. In order to avoid this, it is necessary to create clear rules that allow to anticipate all the variants of the development of events.
Almost all trading tactics are capable of making a profit, but the high level of risk and complexity in use can become a serious obstacle to increasing the profit. The best strategies contain a simplicity that guarantees positive results, a clear tactic of trade, they are flexible enough and ready for any changes in the market.
The best strategies for the digital market today are: trading on rollbacks, trading on impulses, trading on breakouts. They are able to give a guaranteed profit on any crypto-currency pair regardless of the circumstances.
The trading strategy of the crypto trader is that indispensable tool that allows him to have an advantage over the other participants of the digital market. Trading strategy is just as important as competent risk management, trading discipline and strong nerves. The absence of a trading strategy leads to random actions and, accordingly, to random results.
The article is in the translation stage, and is still being updated. I’m sorry for the mistakes. Good reading.