DeutschWhat is Chart Analysis?
You may already be familiar with chart analysis from the field of stock or foreign exchange analysis. It is also sometimes referred to as technical analysis and is, in a way, the counterpart to fundamental analysis. Chart analysis involves looking at the past price movements of a particular underlying asset, such as a stock. Based on the price history, an attempt is then made to identify regularities, so that it is possible to predict a probable price development for the future on this basis. However, this requires so-called trading signals, which provide information on how likely an increase or a decrease is at a certain price.
Chart Analysis Can also be Used for Cryptocurrencies
Since only a few consumers pay with cryptocurrencies, but the cryptocoins are primarily used for speculation, chart analysis can certainly be used in the area of Bitcoins Co. It works there in principle just like in the area of stock analysis. This means that, first of all, the historical price developments of a cryptocurrency, for example Bitcoin, are recorded in the chart. Then, the analysts try to read from the past developments when which interesting movements have taken place from a chart technical point of view. Chart analysis also needs trading signals, because only these give an impetus that a probably good time for a purchase or sale is given. In principle, the analysis can be used for the following financial products, among others:
- Shares
- ETFs
- Options
- Binary options
- Foreign exchange
- Cryptocurrencies
Psychological Factors Extremely Important in Trading
While fundamental analysis is almost completely unsuitable for predicting likely price developments in cryptocurrencies, chart analysis can at least be used to better assess how prices might develop in the future. However, especially with cryptocurrencies, psychological factors play a very large role. This is impressively demonstrated in the current situation, as there is currently a real run. Therefore, chart analysis and chart technology currently play hardly any role, but many speculatively minded investors simply want to buy cryptocoins. This is because they promise themselves the highest possible profits and do not want to miss the connection.
Conclusion on Chart Analysis for Bitcoins, Ethereum and Co
With chart analysis, it is possible to predict with a certain probability how the prices could develop in the future, even with cryptocurrencies. However, there remains of course an uncertainty and, in addition, psychological factors play a very large role, especially in speculation. Therefore, the analysis should not be overestimated under any circumstances. It is only to be regarded as a tool to increase the probability of finding the most perfect purchase or sale time a little.
