Most important charts to watch for your crypto investments [Video]

Along with, "What are the most reliable crypto price prediction websites?" the question, “which charts should I follow?” is one of the most asked, and most important for traders and investors looking to maximize their chances of making the best returns they can with their coin choices.

Understanding technical analysis charts properly can take years of practice, trial and error, and analysis - it's not as simple as up or down.

To learn how to read, analyze, and interpret charts is one of the most formidable skills you can develop if you want to win at crypto.

Knowing your death cross from your dojo, or your engulfing candle from your shooting star, could be the difference between profit or loss.

Listen to anyone who knows about charting, technical analysis, and candlestick interpretation techniques, and they’ll make it look easy.

Blinding you with Japanese terms like a “Rickshaw Man” (the nickname for the long-legged doji) and “Tasuki Gaps” (a rising window formed by a white candle and then a black candle), competent technical traders love to show off their knowledge.

It really is a world apart from trading on fundamentals from accounts, and all the tangible evidence gathered from financial statements and physical observation.

No pre-prepared chart is going to have all the indicators that you would want to use – this is why the majority of crypto traders create their own.
These are generally shared on Reddit and other open platforms, then discussed in forums, chat rooms, or sites for a particular altcoin or strategy.

There is an enormous variety of technical analysis tools and software out there. Here are some of the most popular ones, in no particular order of importance or utility.

Technical analysts examine trading activity and price as useful indicators of the asset's future price movements. Stocks, commodities, currencies, futures, and cryptocurrencies are all examples of assets studied through the lens of technical analysis.

Charles Dow, co-founder of Dow Jones & Company and the Wall Street Journal founder and editor, created the first stock index

After his death, the Wall Street Journal collected Dow's thoughts, published in a series of editorials, into what is now known as “The Dow Theory.” It's important to note that technical analysis has developed through the years to incorporate the patterns and signals we are familiar with today.

For any technical analysis to be accurate, it must be able to determine whether the market has considered all the relevant information regarding an asset. In the minds of traders who use technical analysis and market psychology, it is a given that history will repeat itself.

Technical analysts can use fundamental analysis and trading signals to assess whether an asset is worth approaching and when to buy and sell it so that they can maximize profits. 

Financial information that affects an asset's price can anticipate its future growth through fundamental analysis. You can use such fundamental analysis to examine a company's earnings, industry performance and brand value.

To help traders make more educated decisions, many use technical analysis to identify both bullish, and negative, market fluctuations.

The Dow Jones Industrial Average (DJIA) was created in 1884 - it is a price-weighted index tracking the 30 largest publicly traded firms in the United States. It is still used today.

According to Dow, the stock market was a trustworthy indicator of the health of the economy, and analysis of the market might reveal important market patterns.

Some experts, like William Hamilton, Robert Thea, and Richard Russell, have added to Dow's idea. Some components of Dow's theory, like its focus on the transportation sector, diminished in importance over time. While traders continue to follow the DJT, the DJIA is the dominant market index.

There are six tenets of the Dow theory that make up its overall framework. Time doesn’t allow us to cover them all, but we'll go over some of them.

Above all else - remember - the market reflects everything.

It is an essential principle of technical analysis, and one that is central to Dow's theory, that asset prices represent all available information, including that which is unknowable. As an illustration, if the market expects a corporation to announce favorable results, it will raise the asset's price.

The Efficient Market Hypothesis (EMH), which claims that asset prices represent all available information and trade at their fair value on stock exchanges, is similar to this notion.

According to Dow's theory, there are three distinct types of market trends, but fundamental changes in the market can last for months or even years. A bull market is one in which asset values rise over time, whereas a bear market is one in which asset prices fall over time.

Secondary trends are found inside these primary ones and these could act against the core trend. Pullbacks in bull markets, when asset values momentarily move back, or rallies in bear markets, where prices temporarily move up before continuing their downward trajectory, are examples of secondary trends.

Tertiary trends, which often last a week or a little longer, are ignored because they have no bearing on long-term price changes.

There are three stages to primary trends.

Trend analysis is a useful tool for traders looking for buying or selling opportunities. While the primary trend is bullish, traders can use a negative secondary trend to acquire an asset at a cheaper price before it continues to rise.
It's tough to see these patterns, especially when you consider the Dow theory, which argues that fundamental trends go through three stages. - sometimes a stage is skipped, or it’s so slight it’s easy to miss.

For example, prior to the reversal of a trend, a bull market or a bear market is in its accumulation phase, which happens while market sentiment is still primarily negative or positive, respectively.

If a new trend is just beginning, astute traders can take advantage of this by either building up their positions in anticipation of an upward movement or distributing them in anticipation of a downward movement.

The public participation phase is the second phase. Once a new major trend has begun, investors across the board start either buying more assets to take advantage of rising prices or selling to reduce losses while prices are falling. In this second stage, prices rapidly rise or fall.

We know the last phase as the excess phase during bull markets, and during down markets, the panic phase.

The general population continues to speculate when the trend is about to end during the excess or panic phase. Market participants that grasp this concept sell or buy before a bearish or bullish primary phase, respectively.

Although there is no certainty that these trends will continue, many investors use them as a guide when making investment decisions.

Looking at charts and practicing technical analysis is an ongoing skill that needs to be acquired.

As time goes by, you will begin to recognize patterns, signals, and levels, which used to be a jumble of lines, colors and shapes. Almost like bringing a fuzzy image into focus and being able to see the close detail for the first time.

Keeping a journal or spreadsheet of your charts is a superb way of being able to begin seeing patterns and opportunities by comparing data shown on them over time.

Study other trader’s charts, and follow those who are accurate on FinTwit on Twitter, or the various discussions on Reddit and Quora.