Learn Live ICYMI: Mastering Technical Analysis

Technical analysis plays a critical role in making timely and well-informed crypto investment decisions. Identifying indicators that align with your trading style and goals is important. In addition, these indicators must be used in conjunction with independent market research, as well as a deep understanding of macroeconomics.

In the ninth episode of our Learn 101 livestream, we uncover Mastering Technical Analysis.

Our new series, Learn Live ICYMI, provides a recap of our Learn 101 livestreams, offering you comprehensive expertise and insights from leading figures in the crypto industry in case you miss the livestream.

Joining the livestream on Aug 20, 2024, were two distinguished guests: Markus Thielen, Founder of 10x Research, and Toh Shun Gui, Japan BD Manager at Bybit. Under the moderation of Sabrina Chua, Crypto Evangelist and SEO Editor at Bybit, this episode explores Mastering Technical Analysis.

Key Takeaways:

• Technical analysis should be taken into consideration along with market sentiment and the investor’s trading style.

• Hands-on trading experience using your own funds, education and independent research is the best way to learn crypto trading.

• Stop losses and a smart allocation toward trades can help you mitigate risk.

Introducing the Market Sentiments — A Comprehensive Overview

Global economic events shape market sentiment and drive prices. When you know how to analyze market sentiment and volatility, you can position yourself to profit from your analysis of them. Markus Thielen illustrated this by discussing how Bitcoin’s price moved during the most recent Federal Reserve announcement. Initially, Bitcoin rallied around the announcement before seeing a sell-off. Currently, there’s once again movement in anticipation of an upcoming Fed announcement. According to Thielen, technical analysis is about looking at market structure and positioning for macroeconomic events.

Toh Shun Gui, on the other hand, said he believes that, for newcomers, it’s best not to trade when the market is choppy. He deferred to Thielen to show newcomers how to position themselves using technical analysis. Thielen stated that technical analysis allows traders to take advantage of opportunities in a time of risk or volatility by encouraging them to make unemotional decisions in times when fear is high. He uses a 21-week moving average to determine whether or not he should be active in the market at a given time.

Thielen stated that if you don’t make the right call, don’t take it personally. You don’t have to be accurate 100% of the time to make money. Instead, you need to be accurate closer to 55% or more of the time. For risk management, try using a smaller amount of your portfolio. Thielen believes that there will be more value investors in the crypto market who buy the dip.

There are signals to focus on when timing market sentiment. Thielen draws attention to the halving cycle. Using technical analysis, he discerns opportunities that begin 250 days before halving and extend 250 days after it. He also points out that the weekly relative strength index (RSI) eliminates noise present in the daily index, which enables you to see trends. Combining the 21-week moving average with these factors gives you a clearer picture.

Cracking the Code to Find the Best TA Combination

Thielen discussed reverse indicators when trying to crack the code. For example, when you look at the RSI both currently and in relation to the 5- or 7-day moving average, you can see momentum. In addition, you can push the moving average out on a longer time frame.

According to Toh, indicator overload can trigger poor decisions. He recommends finding a few indicators to monitor, based on your personality. Thielen reinforced this approach, remarking that confusion doesn’t enable you to make smart decisions. Find what works for you. If you like to buy the dip, look at momentum indicators. If you’re focused on long-term growth, look at moving average indicators.

Toh pointed out that losing money is actually a valuable experience. It teaches you fundamentals, such as the speed of the market. Thielen suggested that, when finding a strategy that suits you, don’t follow a social media trader. Make decisions and learn from your experiences using indicators that match your interests. Through your own experiences, you can learn about your emotions and understand what kind of trading strategy you need to use. 

Applying TA in Real Time

According to Thielen, you look at the 21-week moving average in real time. This needs to be taken into consideration with macroeconomic data and world events. An investor must look at the risk and reward for the current conditions. To minimize risk, he recommends using a stop loss to protect against losses due to major, sudden events. You can also mitigate loss by limiting how heavily you invest, based on your portfolio value. Having a strategy decreases both stress and the risk of loss related to emotionally motivated decision-making.

According to Thielen, conflicting signals often cancel each other out. However, he added that investors must also look at the big picture in relation to trends and events. Moreover, he recommends reading insights from other experienced investors to learn how they read the signals in given situations.

Closing Thoughts

Technical analysis plays a key role in identifying investment opportunities and aligning your decisions and strategies. Understanding what the indicators are and how they can help you identify opportunities is essential. Regular focus on education and making risk-managed decisions to gain real-life experience will help you apply technical analysis successfully.

This session of the Learn 101 livestream effectively highlighted Mastering Technical Analysis.

As part of the livestream, Bybit is holding an exclusive event that offers you the chance to participate in our pop quiz and win P2P coupons. The event period is through Aug 27, 2024, 11:59PM UTC.

Stay tuned for more discussions on the dynamic world of cryptocurrencies!

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