The purpose of technical analysis of the market is to determine the current trend and to confirm forecasts for further price movement using various graphical tools. The result of the analysis is to determine the right moment for the transaction.

Thus, the purpose of technical analysis is to see the reasons for opening a position on the chart itself.

In technical analysis, it is important to understand how this particular quote is formed at a given second. Fans of technical analysis say that all news, fluctuations in supply and demand, all expectations of traders, etc. – everything is based on the current price. It is important to understand this when entering the market.

Technical analysts look at the historical trading activity and try to identify opportunities based on it. By assessing the strength or weakness of a particular market, technical analysts can analyze price action and volume, chart patterns, use technical indicators, and many other charting tools.

Technical analysis is also a useful framework for risk management. Because technical makes deal management more specific and measurable. Therefore, some traders use technical analysis solely as a basis for risk management.

Technical analysis is very popular among cryptocurrency traders. However, how practical is it? The influence of speculation on the crypto market makes it an ideal playing field for technical analysts as they only consider technical factors.