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Pro traders likely analysed price action and investor emotions by using the candlestick charting style. Although modernized in the late 1800s by journalist Charles Dow, the core principles of candlestick charting remain intact today. Both the modern and historical technical analysts who swear by the style regard price action as more important than earnings, news or any other fundamental principles. In other words, all known information is reflected in the price, which is precisely displayed in the candlestick. A candlestick represents the price activity of an asset during a specified timeframe through the use of four main components: the open, close, high and low. The “open” of a candlestick represents the price of an asset when the trading period begins whereas the “close” represents the price when the period has concluded. The “high” and the “low” represent the highest and lowest prices achieved during the same trading session. Every candlestick uses two physical ...

This blog explores the possibility of Cryptocurrencies as a solution to hyperinflation, if you haven’t read the previous blog on the Introduction to Hyperinflation , please do so. The invention of cryptocurrency has added a whole new dimension to the digitization of the global economy. It offers an alternative to conventional forms of central bank money or ‘fiat’ currency. It also offers new approaches to setting monetary policy, free from political interference and the damaging consequences of hyperinflation.  Fiat currency is money that is not backed by an underlying asset or commodity but is given the status of legal tender by law. Legal tender is something that a business is obligated to accept as a means of payment. But the fiat itself is inherently worthless. Its value is based on users’ faith that a given nominal amount of currency - the face value - will entitle them to a certain amount of goods or services in exchange. Put differently, money enables indivi...

Introduction Hyperinflation is a term to define rapid, extreme, and out-of-control price upsurges in an economy. While inflation is a measure of the pace of rising prices for goods and services, hyperinflation is swiftly intensifying inflation. Although hyperinflation is a rare event for developed economies, it has occurred many times throughout history in countries such as China, Germany, Russia, Hungary, and Argentina. Hyperinflation occurs when prices have risen by more than 50% per month over a period of time. For comparative purposes, the U.S. inflation rate as measured by the Consumer Price Index (CPI) is typically less than 2% per year, according to the Bureau of Labor Statistics. The CPI is merely an index of the prices for a selected basket of goods and services. Hyperinflation causes consumers and businesses to need more money to buy products due to higher prices. Whereas normal inflation is measured in terms of monthly price inc...

In the previous blog we went through all the markers that you need to remember while you are technically analysing the market. In this blog we will be going look at two types of Technical Analysis. Read on to find out more. Elliott Wave Analysis The  Elliott Wave principle  is a form of technical analysis that cryptocurrency traders use to analyse market cycles and forecast market trends by identifying extremes in investor psychology, highs and low in prices and other collective factors. Elliott Wave traders believe that markets are affected by collective investor psychology, or crowd psychology, and that it moves between optimism and pessimism in natural sequences. It seems to be a discipline suited for cryptocurrency traders because, at this time, they are being solely driven by investor psychology since there are no true underlying fundamentals backing its price rise other than aggressive buying due to limited supply. The key to success when using Ell...

Since we are already acquainted with what Technical analysis is, ( please read the Introduction blog to get started if you already haven’t ) let’s jump right into the aspects of technical analysis that you should definitely pay attention to:   Trend Lines Trend lines, or the typical direction that a coin is moving towards, can be most beneficial for traders of crypto . That said, isolating these trends can be easier said than done. Crypto assets might be substantially volatile, and watching a Bitcoin or crypto price movement chart will probably reveal a selection of highs and lows that form a linear pattern. With that in mind, Technicians understand that they can overlook the volatility and find an upward trend upon seeing a series of higher highs, and vice versa – they can identify a downtrend when they see a series of lower lows. Additionally, there are trends that move sideways, and in these cases, a coin doesn’t move significantly in either direct...

Crypto traders have several tools to evaluate the cryptocurrency market. One of them is a method known as Technical Analysis . Using this process, traders can get a improved understanding of the market sentiment and isolate significant trends in the market. This data can be used to make more educated predictions and wiser trades. Tech Analysis considers the history of a coin with price charts and trading volumes, no matter what the coin or project does. As opposed to technical analysis, fundamental analysis is more focused on establishing if a coin is over or under valued. To get a better idea of technical analysis, it is crucial to understand the fundamental ideas of Dow Theory that tech analysis is based on: 1)     The market considers everything in its pricing. All existing, prior, and upcoming details have already been integrated into current asset prices. With regards to Bitcoin and crypto, this would be comprised of multiple variables like current, past,...

Margin trading with cryptocurrency allows users to borrow money against their current funds to trade cryptocurrency “on margin” on an exchange. In other words, users can  leverage  their existing cryptocurrency or dollars by borrowing funds to increase their buying power (generally paying interest on the amount borrowed, but not always). For example, you put down $25 and leverage 4:1 to borrow $75 to buy $100 worth of Bitcoin . The only stipulation is that no matter what happens, you’ll have to pay back to $75 plus fees. In order to ensure they get the loaned amount back, an exchange will generally “call in” your margin trade once you hit a price where you would start losing the borrowed money (as they will let you borrow money to trade, but they don’t want you losing that money). A margin call can be avoided by putting more money into the position. A given exchange will have a range of different leveraging options (2:1, 3.33:1, 4:1, 100:1, etc.). Mar...