What Are Common Cryptocurrency Technical Analysis Mistakes

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When it comes to analysis, investors stick to some fundamentals such as industry trends, revenue and valuation. However, these fundamental factors don’t provide you with a clear picture of the market price. You need to be good at cryptocurrency technical analysis to make price movement predictions. You need to study historical data about the price and volume of the cryptocurrency or any other asset you want to technically analyze.  

No one can make 100% accurate market predictions. The aim of cryptocurrency technical analysis is to predict the market environment. Technical analysis helps you in making safe investments and maximizing profit. If you want to invest in cryptocurrencies, follow cryptocurrency news to stay up-to-date. 

Crypto trading technical analysis is not easy, especially for a beginner. First of all, you need to know the basics of crypto technical analysis. Keep in mind that you cannot avoid all mistakes. Avoid mistakes that can be avoided to increase your chances of good returns.

Here are some of the common crypto trading technical analysis mistakes:

Not cutting your losses

When you are trading, first of all, think about protecting your capital. Many traders lose their capital because they don’t emphasize the importance of this important point. Your long-term performance will disappoint you if you are not working with your capital in mind. 

When you trade cryptocurrency derivatives with leverage, one bad trade will negatively impact your portfolio. If you are not careful, you may end up losing too much too quickly. Therefore, start with small. Try your investment strategy with a small amount of money.


Many new traders think that they should keep on trading without taking a break. However, making money with crypto trading requires considerable data, research, analysis and patience. Therefore, trade only when the market environment is suitable for trading. Most successful traders make only a dozen trades and earn great profits every year.

Shorter Time Frames

Many traders select short time frames for cryptocurrency trading. Just like overtrading, this mistake can also negatively impact your portfolio. If you want accurate results with technical analysis, study higher time frames. When you are following a chart pattern or an indicator, higher time frames provide you with accurate signals. You get more reliable identifiable chart patterns. 

Think again if you are considering revenge trading. If you have suffered a loss after investment, don’t invest immediately. Take time and do proper crypto technical analysis before making your next investment decision. Don’t let your emotions influence your investment decision.

Lack of Flexibility

Don’t expect consistency in cryptocurrency trading. A strategy that helped you succeed in one market condition may not generate returns in other market conditions. Being flexible is important to succeed as a cryptocurrency trader. 

Bitcoin, Ethereum and there are many other cryptocurrencies in the market. The price of a cryptocurrency may increase or take a nosedive due to the market environment. Therefore, don’t stick with one cryptocurrency only. Technically analyze more than one cryptocurrency. 

Ignoring The Extremes

Cryptocurrency technical analysis is often highly accurate and reliable. However, it can be less reliable in extreme market conditions. A piece of big bad news about an asset can completely change the emotion and psychology of the masses. Your decision should not be based on technical analysis only. You must pay attention to extreme market conditions before making an investment.


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