Why doesn't traditional technical analysis work in the crypto market? - page 2.

adroitful_one

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Quote from: bitekoin on August 20, 2018, 12:01:14 PM

There are two main methods used to analyze potential investment choices in stock and to and make investment decisions: fundamental analysis and technical analysis. Technical analysis is favoured by many statisticians and financial gurus, mainly if you are looking at speculation. It seems from its various characteristics that TA could fare well in this crypto space, but how come a majority of models I have seen have been abysmal in detecting some trends in the cryptosphere?

Well, I have used TA with some success in the crypto space. As long as you stick to well established coins and don't try doing any technical analysis on pump and dump coins, it will more than likely help you out. A lot of coins are just pump/dumps and people dump their free coins they get from airdrops. This kind of thing doesn't happen in the stock market. Also, the market is completely unregulated, so you have a lot people with a lot of money manipulating the market

swissgang

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I think most coins are simply pump and dump, so technical analysis in fact does not make sense. It is good for short term.

styca

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Quote from: bitekoin on August 20, 2018, 12:01:14 PM

There are two main methods used to analyze potential investment choices in stock and to and make investment decisions: fundamental analysis and technical analysis. Technical analysis is favoured by many statisticians and financial gurus, mainly if you are looking at speculation. It seems from its various characteristics that TA could fare well in this crypto space, but how come a majority of models I have seen have been abysmal in detecting some trends in the cryptosphere?

I think two key considerations are:

Trading volumes are often thin. This means that when a coin has a certain price, that price is not firmly established. So wild fluctuations are inevitable - particularly evident with smaller coins, where a big buy or sell can potentially wipe out the whole order book.
Every coin relates to BTC (and/or ETH) as the other half of the trading pair. So it's not the same as traditional markets, where a product can lean on the stability of a fiat currency. So what this means is that BTC or ETH price moves can dramatically affect the price of smaller coins.

An example combining these two - Say a coin has a price of 0.1 BTC, with BTC at $6,000. But that price is based on a single order, the next sell is at 0.2 BTC, and the next buy is at 0.05 BTC. In this scenario, a single buy or sell can double or halve the coin price. But maybe the order book is so thin that there are no more orders fulfilled for another week, and during that time, BTC climbs to $9,000 - so this coin at 0.1 BTC has suddenly had a 50% price rise in fiat.

Victorycoin

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Quote from: bitekoin on August 20, 2018, 12:01:14 PM

There are two main methods used to analyze potential investment choices in stock and to and make investment decisions: fundamental analysis and technical analysis. Technical analysis is favoured by many statisticians and financial gurus, mainly if you are looking at speculation. It seems from its various characteristics that TA could fare well in this crypto space, but how come a majority of models I have seen have been abysmal in detecting some trends in the cryptosphere?

I think it is not exactly correct to say TA have been abysmal in detecting trends in the cryptocurrency market, because the comparison with the stock and forex markets seem not to take into cognizance the fact that the cryptomarket is not only young and still evolving, but far less capitalized than anyone of them, thereby making it easily influenced by the slightest strong beat in the ecosystem. With time and much more adoption by the masses especially business owners, I think the accuracy of the predictions looks good to improve.

Zadicar

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Quote from: bitekoin on August 20, 2018, 12:01:14 PM

There are two main methods used to analyze potential investment choices in stock and to and make investment decisions: fundamental analysis and technical analysis. Technical analysis is favoured by many statisticians and financial gurus, mainly if you are looking at speculation. It seems from its various characteristics that TA could fare well in this crypto space, but how come a majority of models I have seen have been abysmal in detecting some trends in the cryptosphere?

No doubt that TA is really always the main tool to be used by most traders but I would say that not all the times these TA's would be effective yet we do know that crypto market is always been volatile and most of the time it would really be mainly affected by news which means fundamental analysis would still required inspite on focusing yourself on just using technical. This is why I'm using both things because you can make your own analysis basing on whats the current condition of the market.

Tylev

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Quote from: bitekoin on August 20, 2018, 12:01:14 PM

There are two main methods used to analyze potential investment choices in stock and to and make investment decisions: fundamental analysis and technical analysis. Technical analysis is favoured by many statisticians and financial gurus, mainly if you are looking at speculation. It seems from its various characteristics that TA could fare well in this crypto space, but how come a majority of models I have seen have been abysmal in detecting some trends in the cryptosphere?

We still see that especially this year, no analyzes on the crypto-currency market do not work. On the one hand, the decentralized nature of the crypto currency is triggered, and on the other hand, we see that bitcoin is actively intervening from the side in the price of bitcoins.
At the end of each year, the crypto-currency market is rising and on the basis of this we hope that this year will be the same growth. However, bitcoin often presents us with unexpected surprises.

bitekoin

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There are two main methods used to analyze potential investment choices in stock and to and make investment decisions: fundamental analysis and technical analysis. Technical analysis is favoured by many statisticians and financial gurus, mainly if you are looking at speculation. It seems from its various characteristics that TA could fare well in this crypto space, but how come a majority of models I have seen have been abysmal in detecting some trends in the cryptosphere?

Topic: Why doesn't traditional technical analysis work in the crypto market? - page 2. (Read 248 times)