Crypto Analysis: A Key to Trading Success

in LeoFinance7 months ago

The importance of proper planning before striking or taking a step cannot be overemphasized. Planning and preparations help you to carefully plot out the possible routes to accomplish a task and also allow you to know the best path to take in doing so. More so, it opens you up to the many things that could go wrong such that you are prepared and pre-informed should things go south along the line.


Contrarily, when you make a move without carefully strategizing, you are bound to see failures. In the aspect of crypto trading, when you just initiate a trade whether taking a long or short position, without studying the market environment, price actions, and trends, you are bound to encounter losses. It's either you will get liquidated or you'll be in a negative PNL for a long period or you will have to trigger a stop loss. One of those three is a certainty when you trade carelessly.

Also, most of the unsuccessful businesses we have around us are a result of poor planning and strategizing. Not taking out quality time to plan and analyze only means that you are leaving the future/ outcomes in the hands of fate and chance. When you do so, you should be ready to accept whatever the outcomes may be. Remember, success doesn't happen by chance.

The Need For Crypto Analysis

The concept of analysis is a very vital factor in the realization of profits in the crypto trading business. Without proper analysis, you will always make the wrong moves in the market, and making the wrong moves will always result in losses. You don't want to see losses? Then, analyze before taking any position.

Crypto trading isn't like gambling where you can just predict or speculate without backings or facts to support your every crypto trade. Anyone that wants to make it big in the space must learn to always carry out adequate research and analysis.

Therefore, crypto analysis entails a careful study of a certain crypto market/ pair by considering parameters such as volume, price actions, chart indicators, market trend, news, updates, and developments around the said crypto which then gives a signal on the trading decision to make.

Fundamental and Technical Analysis

Furthermore, crypto analyses are of two categories. We have fundamental analysis and technical analysis. These two are distinct and important in their ways. None is more important than the other. However, a good knowledge of both concepts will give you an edge in crypto trading.

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As the name implies, fundamental analysis has to do with knowing the fundamentals, underlying principles, and the use cases of a particular project. A project with a clear use case will always do well in the market whereas a project with no actual use case would cause investors to incur losses.

To guide your trading activities, you need to study and know everything there is to know about a particular coin/ token. That way, you will miss investing in shitty projects. Fundamental analysis also involves paying attention to news and developments surrounding a certain project.

For example, whenever there is news that a certain crypto project has been attacked by hackers or exploited and funds stolen, it tells a trader that such project token will see an immediate or temporal decline in price as a result of a high selling pressure that'll follow. On the other hand, news of major upgrades, developments, adoptions, partnerships, and collaboration with top entities could cause a pump in the market.


Whereas, technical analysis has to do with charting through the use of various indicators, price actions, volume, and many other parameters. Charting involves the interpretation of candlesticks movement to ascertain future price movements.

In the aspect of complexity, technical analysis is more complex than fundamental analysis. To analyze the market technically, one must learn and understand the usage of indicators and patterns in the market. This method of analysis is mostly done by crypto experts but anyone can always learn technical analysis.

The bottom line is that, as a crypto trader, you should not take decisions irrationally rather carefully consider various market parameters and factors before initiating any trade. That way, you'll make profits and be successful in your trades rather than incurring losses.

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Fundamentals work better for me, always have.

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Fundamentals are always right. Technical too work for many

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There is so much sense in here. I can only say thanks for sharing. Glad to read from you.

I'm glad you found it useful

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A lot of great information in here and could help a lot of people who want to start trading and wanted some quick overviews on what you need to expect.


Yeah, I write from personal experiences.

I'm glad you found it useful

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