Analytics
Reading time: ~2 m
Technical analysis is one of the most important tools for predicting the price movement of an asset. Without basic knowledge, a trader simply cannot form a strategy correctly or protect himself from losses. Editorial BeInCrypto spoke with an analyst and author of the channel of the same name in Telegram and YouTube Ilya Solovey.
On the importance of analytics in the work of a trader
The crypto market, unlike the classical currency and stock markets, has a greater volatility. Therefore, there can be much more manipulations here. Manipulation is created by news, and everyone sees this news. It is unlikely that news is released in order for the majority of people to make money in the market.
“Only if the news was given to you personally by the owner of one of the major exchanges, then you should pay attention to it. But, you see, such situations do not arise for an ordinary trader. The key plus of technical analysis and analysis of the chart as a whole is that all the news and all possible scenarios are already included in the price chart. Yes, it is important to understand that news can affect the volatility of cryptoassets, but the price levels to which the coin will come and the levels from which it is worth opening a position are determined by analyzing the charts,” said Ilya Solovey.
As for the accuracy of the analysis, there is no trader who closes 10 out of 10 trades in profit. Therefore, it is very important to follow the rules of money management. You cannot risk more than 1% of your trading deposit on a trade. Otherwise, a few negative trades will unsettle you and take away most of your trading funds. For example, if in each transaction you risk 5% of the deposit, then in the event of 5 unsuccessful transactions, you will already lose 25% of your trading funds. This will lead to fear of opening new trades and to a lot of self-doubt in the market.
“I’ll also give you a little piece of advice: protect your profits. If you have a position in profit, put a stop loss at the position entry level and lock in part of the profit, about 20-30% of your trade. If the price goes against your trade, you will be able to re-enter the trade at a better price and will also be left with a part of the fixed profit instead of a loss,” commented the expert.
About types of analysis
Professional traders most often use technical analysis and volume analysis for trading. In fact, there are many fashionable areas of analysis now, for example, the concept of “Smart Money”, but in fact it is the same.
“In trading, I rely on several factors: the levels at which the largest volumes were traded — we can get these levels using the VRVP (Visible range volume profile) indicator. The price moves from volume to volume. It unfolds from the levels at which large volumes were traded,” shared Ilya.
And the price does not stop at levels where there is no volume:
“I rely on Fibonacci levels. To determine the levels of support and resistance, it is necessary to pull the Fibo grid on any strong impulse. Now the Fibo levels that are below us are our supports, from where the price shows upward movements,” commented Ilya.
Our task is to find such moments when both factors converge at the same price level: the volume levels will coincide with the Fibo levels. Combining these factors, we get very precise and clear entry points:
Basically, traders use no more than 2-3 factors to enter a trade.
It is worth noting that the use of too many factors for analysis harms the result in the same way as the use of just one factor. Here is an example when there are large volumes in the price range, but there is no Fibo level:
“I don’t use pattern analysis to trade. Any figure can be divided into horizontal and dynamic levels. It is worth paying attention to them. After all, figures can also be manipulated, because when studying technical analysis, beginners first of all go to study exactly the figures, ”said the analyst.
On the price forecast for BTC and ETN for the coming periods
Let’s return to the fact that the price goes from volume to volume. For ETH, key resistance and high volumes are at $2,000. If we break through this price level, then the road to the next levels with large volumes will be open for the coin: $2500, $2900, $3300.
If in the near future we do not see a breakdown of the $2000 level, then we will go to gain strength towards the nearest supports. Support levels are marked with blue lines.
As for BTC, here the key resistance is the range of $29,700 – $31,000. If we break this level with volumes, we can see $38,000, $42,000, $47,000. If this resistance range is not broken, then it will be safer trade from supports that are below current prices. I have marked these supports with blue lines.
See more price predictions for top cryptocurrencies here.
#trade #crypto #technical #analysis #Ilya #Solovey
