Fundamental analysis vs. technical analysis: battle of the cryptofield!
ヾ(☆▽☆) Hey padawan! Have you just joined cryptotrading feeling like an itty-bitty kitty among angry bitcoin wolves? Don't worry, I'm here to help you choose your own cryptohero.
In this article, we focus on two main types of analysis – technical and fundamental.
Let's see what it is, what its advantages and disadvantages are.
(￢‿￢ ) Technical analysis is based on the study of charts and patterns of asset price movements. It's like poker, where you observe the game trying to read the cues!
- Simplicity: Technical analysis does not require in-depth knowledge about businesses or economic events.
- Visual approach: Charts and indicators give a visual representation of price movements.
- No context: The technical analysis doesn't take into account current events and business fundamentals.
- False cues: Sometimes graphics can give false cues, resulting in wrong decisions. Too much memes can lead to a waste of money.
The fundamental analysis is looking at financial data, news, and other factors that influence the market.
In a way, fundamental analysis is like a puzzle, where in order to get a correct answer, you need to sweat a bit! (๑˘︶˘๑)
Pros and cons of fundamental analysis:
- Broad context: Fundamental analysis takes into account the financial condition of the company, news, economic indicators and other important factors. You can see how prosperous the company is and how stable its revenues are.
- Long-term perspective: Fundamental analysis helps to assess the potential of an asset in the long term. This is helpful if you want to invest in the long run.
Complexity: Fundamental analysis requires a thorough understanding of financial performance and economic processes. This can be difficult for some lemmings.
Time is running out: Fundamental analysis takes time to study data and news. Sometimes big news can already affect prices while you are still doing your analysis… and there will be a discrepancy :)
Conclusion
So which analysis to choose???
There is no single correct answer. Some traders prefer to combine the two approaches in their decision-making. You can use technical analysis to enter a position, and fundamental analysis to test the long term.
Finally, the choice depends on your preferences, your trading style and how much time you are willing to spend analyzing.
Keep in mind that the two analyses have their advantages and disadvantages and it is important to constantly develop and improve your skills.
Good luck in the market! Keep ya head up, pup! (◕‿◕)♡
Source: https://t.me/letit_ai