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  • Profile picture of David Osima

    David Osima posted in the group Crypto Guide

    6 months, 1 week ago

    Good evening ladies and gents, today we are learning about market analysis.

    To begin, let’s look at three ways how you would analyze and develop ideas to trade the market.

    There are three types of market analysis:
    Technical Analysis.
    Fundamental Analysis.
    Sentiment Analysis.

    Technical Analysis
    Technical analysis involves looking at patterns in price history to determine the higher
    probability time and place to enter a trade and exit a trade. As a result, technical analysis is
    one of the most widely used types of analysis. The movements on a chart from the price
    action generally gives clues about hidden levels of supply and demand. Other patterned be
    such as which currencies are trending the strongest can be obtained by reviewing the price chart.

    Trend lines.
    Trend lines are probably the most common form of technical analysis in trading. A trendline is
    a line drawn over pivot highs or under pivot lows to show the prevailing direction of price.
    Trendlines are a visual representation of support and resistance in any time frame. They show
    direction and speed of price, and also describe patterns during periods of price contraction.

    There are three types of trends:
    • Uptrend (higher lows).
    • Downtrend (lower highs).
    • Sideways trends (ranging)Fundamental Analysis.

    Fundamental Analysis.
    Fundamental analysis is a way of looking at the market by analyzing economic, social, and
    political forces that may affect the supply and demand of an asset. Using supply and demand as an
    indicator of where price could be headed is easy.
    The better shape a country’s economy is, the more foreign businesses and investors will invest in
    that country. Fundamental analysis is the process of looking at a business at the most basic or
    fundamental financial level. This type of analysis examines the key ratios of a business to determine
    its financial health. Fundamental analysis can also give you an idea of the value of what a project (crypto coin) is worth. The goal is to determine
    the current worth of the coin, and, perhaps more importantly, to identify how the market values
    the coin. Even if you don’t plan to do an in-depth fundamental analysis yourself, understanding the
    key ratios and terms can help you follow crypto more closely and accurately.

    Sentiment Analysis
    Each trader has his or her own opinion of why the market is acting the way it does and whether to
    trade in the same direction of the market or against it. The market basically represents what all
    traders feel about the market. Each trader’s thoughts and opinions, which are expressed through
    whatever position they take, helps form the overall sentiment of the market regardless of what
    information is out there.
    The problem is that as retail traders, no matter how strongly you feel about a certain trade, you
    can’t move the markets in your favor. Sentiment Analysis also known as Opinion Mining is a
    field within Natural Language Processing (NLP) that builds systems that try to identify and extract
    opinions within text. Usually, besides identifying the opinion, these systems extract attributes of the
    expression e.g.:
    • Polarity: if the speaker expresses a positive or negative opinion,
    • Subject: the thing that is being talked about,
    • Opinion holder: the person, or entity that expresses the opinion.

    Thank you for engaging it is very much appreciated 🙏🏾

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