Through WeViveLive’s articles on Fundamentals, NouVive seeks to provide subscribers with supplementary knowledge on technical analysis. These supplementary articles will allow you to become more comfortable with how cryptocurrency trading works, better understand our traders’ analysis accompanying Market Signal reports and capitalise on more informed trades.
This article is aimed at beginners and will outline some basic things all Nouvive traders should take into account when starting out. If you’re still thinking about getting started with trading, we hope that by the end of this article you’ll be better informed about how it all works.
Firstly, you should use a diversity of time frames for your charts. This allows you to understand price history and the current trend of the cryptocurrency in relation to that. With bigger time frames, you can also see major swing points, levels and long-term trendlines much easier. This will allow newcomers to apply their knowledge with more ease than with smaller time frames. Understanding the big picture is fundamental at every stage of trading.
You should also remember that support and resistance lines are not specific points. They are actually zones where buyers and sellers have the potential to step in. You should thus view these lines as general areas of buying and selling interest rather than explicit price points. Fundamentally, you should be prudent when drawing your lines and flexible when price start interacting with them.
In terms of more general advice for newcomers to cryptocurrency trading, you should remember that if your technical setup is correct, you won’t need to force your lines. You shouldn’t force the setup to give you what you’re after – you shouldn’t lie to yourself. Instead, you should let some trades go. Newcomers often force trades and lose money. Fight this instinct and keep the bigger picture in mind.
The above applies just as much to the use of indicators. You shouldn’t be using these as a crutch to accommodate your inability to chart and trade with the use of price action on its own. We recommend that first you get comfortable with charting without indicators and then you should slowly add them to get an idea of how price will react to the lines. You should not an indicator without explicitly understanding how it operates. A common example is traders using nothing but Ichimoku Cloud for charting. This leads to faulty technical analysis as there is no understanding of fundamentals. Instead, slowly build up your knowledge by reading our Fundamentals series, keeping up with WeViveLive, getting in touch if you have questions and engaging in discourse with traders of every skill level on ViRoom.
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