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Do Professional Traders Use Technical Analysis?

Do professional traders use technical analysis? New to the world of finance, have you been a part-time trader, or are you thinking of quitting your 6-9 job to become a professional trader? technical analysis is a way professional traders identify trends in the financial market.

In this blog post, will go into detail to explain trading, technical analysis, who professional traders are, how to trade professionally, what it takes to become a professional trader, tips for using technical analysis, the advantages and risks of using technical analysis in trading, etc.

Table of Contents

Introduction

Technical analysis is a method used by professional traders to identify patterns and trends in the financial market. Technical analysis helps traders and investors to make well-informed and more profitable trading/investment decisions.

it gives you the ability to identify patterns and trends in market data that may help them to predict future movements of a commodity.

What is trading?

Trading in the world of finance is regarded as the process of buying and selling securities. This is often done using a computer, Thanks to the advent of the internet. It is a financial activity that allows traders and investors to make money by buying and selling securities.

What is technical analysis?

Technical analysis is the process of using tools provided in your charting platform to study the behavior of markets and make better trading and investing decisions. It gives you the ability to identify patterns in the market data that can suggest future market trends.

Basic technical analysis is the most basic type of technical analysis, and it focuses on finding patterns in the data that can suggest future market trends. To do this, basic technical analysis uses indicators of technical analysis, such as volume, price, and price action.

Who are professional traders?

There are many professional traders in the world. they are a set of individuals who are skilled in the commodity market and the trading of different securities.

Professional traders are in many different professions, such as investment bankers, investment analysts, commodities traders, and stock market analysts. They use their skills to trade different securities and to make money.

How do traders trade professionally?

Some traders see trading as a get-rich-quick scheme. Trading professionally comes with a great price, and never forget, “with great risk comes a great reward”. trading professionally is not about trading frequently, but rather treating your trading activities like a business.

  • Trading Plan: This has to deal with your investment plans and objectives, your trading strategy, how you intend to trade when you trade, and the amount you risk on each trade.
  • Sufficient Trading Capital: Trading should be treated like a business, you need money to make money, ensure that you have adequate trading capital before you engage in any trading activities.
  • Have A Target: To become successful in any area of endeavor, there must be a goal. it is either to make money or become relevant to society. you should have a well-defined goal, eg. To make 5% monthly, be specific.
  • Stay Disciplined: This is the most difficult part beginner traders and investors should work on, discipline is everything, stick to your trading plan.
  • Have Patient: Tough times never last, if you find yourself losing patience, then you should consider taking a break. successful traders didn’t make it all in one night, focus on the process and you will be rewarded with profit.

What does it take to be a professional trader?

There are many things(skills) that it takes to be a successful or professional trader, but one of the most important skills is experience. Experience is what allows you to learn and grow.

When you have experience trading, you can make better decisions and better financial decisions. This is why it is so important to have experience in the trading field. It will allow you to be successful in your trading and investment career.

What type of analysis do professional traders use?

When it comes to trading and investments, there are a variety of analytical methods that professional traders use to analyze financial market data. Some of the most common methods used by professional traders include fundamental analysis, technical analysis, and sentiment analysis.

  • Fundamental analysis: In short, fundamental analysis is the study of economic, social, and political factors that affect the value and volatility of a commodity. It can be used to help make decisions about whether to invest in a commodity or not.
do professional traders use technical analysis
Fundamental analysis by Chikwem Chinedu Ogugua on Forexfactory
  • Technical analysis: Technical analysis is a process of reviewing market data and identifying patterns that may suggest short or long-term price action. It is a powerful tool for traders and can be used in several ways, including identifying opportunities to buy or sell stocks, forecasting future trends, and analyzing financial reports.
do professional traders use technical analysis
Technical analysis by Chikwem Chinedu Ogugua on Tradingview
  • Sentiment analysis: This is simply the study of how traders and investors are reacting to a market situation, this could be optimistic or pessimistic. It is conducted with a natural language processing technique.

Difference between professionals and non-professional traders

While there are numerous types of traders, there is no one all-encompassing type of trader. A professional trader is someone proficient in the use of trading tools and strategies, while a non-professional trader is someone who does not have the same level of proficiency.

There are different types of traders depending on their individual goals and interests. Some professional traders focus on market analysis, while others specialize in binary options or shorting stocks. Some traders are also interested in trading metals, CFDs, or options.

There are many different goals and interests that a professional trader can have, so it is important to find one that is best suited for your investment objectives.

What are the advantages of using technical analysis in trading?

While technical analysis is used to identify trends and discover patterns in the financial market, There are many advantages to using technical it in trading and investment:

  1. Technical analysis allows you to make better trades by understanding the patterns that occur in financial data.
  2. Technical analysis can help you identify trends in financial data that you can use to make informed investment decisions.
  3. Technical analysis can also help you identify potential opportunities in market conditions.
  4. Technical analysis can help you to identify potential risks associated with the financial markets
  5. Technical analysis can also help you to identify which stocks are overpriced and which stocks are undervalued.

What are the risks of using technical analysis in trading?

although the advantages of technical analysis are enormous, There are many risks associated with using technical analysis in trading. the disadvantages can be summarized as follows:

  1. Technical analysis can be time-consuming.
  2. Technical analysis can be unreliable.
  3. Technical analysis can be misleading.
  4. Technical analysis can be inaccurate and misleading.
  5. Can lead to loss, if used incorrectly to find patterns in the financial market

So, do professional traders use technical analysis?

Well, this is quite interesting, without technical analysis it could be very difficult to trade or invest in the financial markets.

Some of the most common types of technical analysis used by professional traders are Bollinger Bands, Fibonacci ratios, candlesticks, etc.

  • Bollinger Bands: Bollinger bands are a technical analysis tool developed by john Bollinger, It is primarily used for trading stocks, commodities, securities, and more. The bands comprise a volatility indicator that measures relatively the highs or lows of commodity prices about previous trades. Using standard deviation volatility is measured therefore changes with increases or decreases in volatility.
do professional traders use technical analysis
Bollinger bands chart by Chikwem Chinedu Ogugua
  • Fibonacci ratios: A fibonacci retracement is a technical tool used by technical investors/analysts for determining the support and resistance levels of a commodity. It uses a Fibonacci sequence of numbers whose ratio provides potential price levels to which markets tend to retrace after a portion of a move before the trend continues in its original direction, this could be an uptrend or a downtrend.
do professional traders use technical analysis
Fibonacci chart by Chikwem Chinedu Ogugua

Tips for using technical analysis in trading

To be successful in the world of finance, there are a few things you should always keep while trading and investing.

First and foremost, good trading habits. You need to do your research before you start trading, and you need to be able to stay focused. You also need to be able to make quick decisions, and you need to be able to rise your trading career.

Another important thing is experience. You need to be able to trade in different markets, and you need to be able to handle different types of risks. You also need to be able to read market conditions and make informed decisions.

Are professional traders profitable?

There is no definitive answer to this question. However, some factors that could help identify whether or not professional traders are profitable could include their trading styles, experience, and success rate.

Additionally, it is important to consider other factors such as the current market conditions and the potential risks associated with their trading activities.

Conclusion

Technical analysis is a process of analyzing information about markets and securities in order to identify patterns and trends.

Technical analysts use a variety of techniques, including trend analysis, price analysis, and technical indicators. They use these techniques to identify opportunities and identify potential problems in the markets.

Some traders use technical analysis in order to identify opportunities in the markets. They may use it to identify trends, signals, and patterns in the markets.

Others may use it to identify potential problems in the markets. Technical analysts may also use it to help them find solutions to problems in the markets.

We would love to hear from you–do you have any contributions to share or question to ask on this topic? Please share your thoughts and experiences in the discussion forum or comments below, and let us know what you think, we look forward to reading and answering your questions!

is technical analysis useless

Is Technical Analysis Useless?

Is technical analysis useless? Are you new to stock, fx, and cryptocurrency trading? If so, you’re in for a treat! Technical analysis can help traders forecast price movements and make better trading decisions., does this sound useless or useful, read through to find out more.

In this article, We’ll cover topics like what technical analysis is, its usefulness, how it can be used, drawbacks, and tips on how to become a profitable trader or investor.

What is technical analysis?

Technical analysis is the process of understanding the behavior of markets and making informed investment decisions. It is a fundamental tool used by market makers and traders in the stock and financial markets.

Fundamental technical analysis unlike technical analysis considers the overall health and strength of an economy, company, and commodities, while technical analysis considers the various factors that can affect the stock price. Technical analysis is used most often by market makers and traders.

what is the usefulness of technical analysis?

Technical analysis is a branch of financial analysis that deals with the interpretation of technical indicators.

This analysis is important for both individual investors and institutional investors, as it can provide insights into the future performance of a stock or other securities.

Technical analysis can be used to identify patterns in the data that may suggest future success or failure for a country’s currency or company stock. This type of analysis can also be used to identify potential opportunities in the stock and commodity market.

Technical analysis can also be used to help investors make informed decisions about their investments.

Key Points:

  • Technical analysis can be used to identify overvalued and undervalued stocks.
  • Technical analysis can also be used to identify trends in the stock market.
  • Technical analysis can help investors make informed investment decisions.
  • Technical analysis is the use of charts, graphs, and other tools to predict the future price of an asset.
  • Technical analysis can be used to identify trends in the market and make informed investment decisions.
  • Technical analysis can also help traders forecast price movements and make better trading decisions.

How can technical analysis be used to make trading decisions?

Technical analysis is a process of understanding the behavior of market prices and making trading decisions based on that understanding. Technical analysis can be used in the stock market, forex market, and other markets.

When used correctly, technical analysis can help traders make decisions that are based on sound information, which can lead to profitable trading outcomes.

There are several steps that technical analysis must go through in order to be effective, and these steps can be difficult to follow without more information.

What are the risks associated with technical analysis?

Technical analysis is a form of financial analysis that uses information about a stock or group of stocks to make investment decisions.

It can be used to identify patterns and trends in the data, identify buying and selling opportunities, and make informed investment decisions.

There is a variety of risks associated with technical analysis. Some of the most common risks include over-the-counter (OTC) stock trading and market manipulation. OTC stock trading can lead to price manipulation, where a company artificially increases or decreases.

However, trading alone with technical analysis as most traders do could be a big mistake any beginner trader should make.

In finance, there are specifically three basic analyses every trader and investor must conduct before risking his trading capital in any stock, bond, or commodity pair.

Statistics have proven that 67% to 75% of (CFD) contracts for difference traders lose money, this is not as a result of trading inability but rather as a result of ignorance, fundament analysis, technical analysis, and sentiment analysis are the three major analysis an investor or a trader should always be aware of.

Conclusion

There is no single right answer to this question, as different people have different opinions on the effectiveness of technical analysis.

However, some people believe that technical analysis is not effective at all, while others claim that it can be used in a helpful way. Ultimately, the effectiveness of technical analysis is ultimately up to the individual reader to decide.

Technical analysis is very essential to any retail trader, brokers, market makers, and investors, however, it can never be used as an indicator or proof of where the price of a commodity or stock will be in the future.

This is a great article on (Is technical analysis useless? We would love to hear from you–do you have any contributions to share or question to ask on this topic?

Please share your thoughts and experiences in the forum or comments below, and let us know what you think, we look forward to reading and answering your questions!

Aud/Cad Trading Idea: Tokyo-London Session

Aud/Cad Trading Idea: Tokyo-London Session

Aud/Cad Trading Idea! Just a few days after our previous analysis, the pair played out as speculated. Could this be an additional trading opportunity to scale into our trade or sit back and watch the market? Continue reading to explore this trading opportunity.

Economic events on Aud

Unemployment Rate:

The unemployment rate is used to measure the percentage of the total workforce that is unemployed and the ones actively seeking employment during the previous month, Although it is generally viewed as a lagging indicator.

The number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market situations, this data is released monthly, about 15 days after the month ends.

If however, the Actual data released is lesser than the Forecast, it is considered good for the preceding currency.

CurrencyForecastPrevious
AUD3.9%4.0%
High Economic Impact

Economic events on Cad

Overnight Rate:

This measures the interest rate at which major financial institutions borrow and lend overnight funds between themselves, The rate decision is usually priced into the market, so it tends to be influenced by the Bank of Canada(BOC) Rate Statement, which focuses on the future.

Short-term interest rates are the paramount factor in currency valuation – Investors/traders look mostly at other indicators merely to predict how interest rates are likely to change in the nearest future.

This data is scheduled 8 times per year, however, if the ‘Actual’ data released is greater than ‘Forecast’, it is considered good for the currency.

CurrencyForecastPrevious
CAD1.00%0.50%
High Economic Impact

Highlight

Aud/Cad pair as speculated from our previous analysis retested the broken resistance of the Descending broadening wedge pattern where it bounced off, thus making a new high testing 0.95000 price level which resulted in a minor pullback on the pair.

Using the stochastic indicator on the above daily chart, we can observe that the Simple moving averages(SMA) are already in the oversold region, this is an additional confluence that buyers are jumping in with their orders.

Conclusion

The unemployment rate is used to measure the percentage of the total workforce that is unemployed and the ones actively seeking employment, however, if the Actual data released is lesser than the Forecast, the Aud/Cad pair will be expected to continue its trend.

What are your thoughts on this Aud/Cad trading idea? Is it useful ? or is it a waste of time? Let us know by commenting on this post or our forum, and be sure to check back shortly for more trading-related content.

AUD/CAD Trade Idea

Aud/Cad Trade Idea ” London Trading Session”.

High probability of short opportunity on AUD/CAD trade idea, Pair pulls back to retest the broken support/supply zone, Wondering if pair will continue or make a new high? Read through to find out more.

Economic Data Events On CAD

Building Permits m/m:

This measures the current changes in the total value of new building permits issued to investors/citizens, It’s an excellent gauge of future construction activity. Basically obtaining a building permit is among the first steps in constructing a new building/residence.

CurrencyForecastPrevious
CAD2.1%1.3%

This is released monthly, about 35 days after the month ends, if the ‘Actual’ result is greater than the ‘Forecast’ then good for the currency.

Employment Change:

This measures the absolute changes in the number and population of employed people during the previous month, It is vital economic data released shortly after the month ends with a huge impact on the economy. The combination of importance and earliness makes for hefty market impacts throughout the period of its release.

Employment creation is an important leading index of consumer spending, This accounts for a majority of overall economic growth and activity.

CurrencyForecastPrevious
CAD24.5K153.7K

It is released monthly, about 8 days after the end of every month, if the ‘Actual’ data released is greater than ‘Forecast’ it is good for the currency.

AUD/CAD

4 Hour Line Forex Aud/Cad Trade Idea

Unemployment Rate:

The unemployment rate measures the percentage of the total workforce that is unemployed people and once actively seeking employment during the past month, Although it’s generally perceived as a lagging indicator.

However, the number of unemployed people is an important signal of overall economic health simply because consumer spending is highly correlated with labor-market conditions.

CurrencyForecastPrevious
CAD6.0%6.0%

The unemployment rate is usually released monthly, about 8 days after the end of the month; if ‘Actual’ released data is less than ‘Forecast’ it is considered by investors good for the currency.

Ivey PMI:

this measures the level of a diffusion index-based Survey of about 175 purchasing managers conducted, selected geographically and by sector of activity to inspect the economy as a whole.

Respondents are asked to rate the relative level of business conditions and activity including employment, production, new orders, prices, supplier deliveries, and inventories.

It’s a leading index of economic health and activities – businesses respond quickly to market conditions, and their purchasing directors hold perhaps the most current and relevant information to the company’s view of the economy.

CurrencyForecastPrevious
CAD64.361.2
Medium

The data is released monthly, about 5 days after the month ends, ‘Actual’ release greater than ‘Forecast’ is good for the currency.

AUD/CAD

Firstly as being the first quarter of the year market seems unpredictable in previous analysis but Aud/Cad pops up a trade idea / short opportunity as the pair pulls back to retest the broken support zone.

Secondly, Before the end of Q4 pair traded sideways as a disagreement between investors which resulted in the formation of a chart pattern considered by investors to be Descending broadening wedge, It is characterized by increasing price volatility and diagrammed as two diverging trend lines, one rising and one falling.

Conclusion

However, AUD/Cad Trade Idea from the 4Hour line chart above we can observe that pair traded with high liquidity around the resistance of descending broadening wedge pattern, later during last week trading session pair broke and made a high of 0.93000 of which it rallied down breaking a key support zone 0.92500.

Moreover, the break in structure was quite a confirmation that the pair will continue bearish throughout the week, AUD/CAD pair sold as speculated and then tested a support zone of 0.91800 which resulted in the current ongoing retracement, this implies that the pair might continue its downtrend.

Additionally paying attention to the upcoming economic data release is necessary because vital information is released which makes a huge impact on the currency.

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5 Crypto Currencies Under $1 Worth Buying In October 2021

Listed below are the Top 5 Crypto Currencies Under $1 Worth Investing In for massive Promising Returns In October 2021..

VeThor Token(VTHO)

VeThor is one of the tokens which is employed by the VeChain Thor block chain. The token was originally launched in 2015 which later went through a heavy rebranding process in 2018.

While VeChain Token is the native tokens for its platform, VeThor Token (VTHO) plays an essential role in the overall functionality of the block chain technology.

The VeThor Token may be a notable Standard coin, which represents the value of using the VeChainThor block chain. Its primary purpose is to enhance processes, deals and activities on the block chain, and it basically represents the smart contract tier of the network.

Market Cap:

$393,839,390
₿6,503

24 Hour Trading Vol:

$25,227,472
₿412.323

Circulating Supply:

41,212,281,571

Vethor/Usdt Pair Observation

VeThor Token(VTHO) pair is currently consolidating on the resistance zone this may attract buyers resulting to a momentous breakuout .

Nervos Network(CKB)

Nervos(ckb) is a layered crypto- thrift network. it uniquely separates the structure of a crypto- thrift into two layers a verification level ( level 1) that serves as a trust root and smart custodian, and a generation level ( level 2) for high- performance deals and sequestration protection.

This basically provides an overview of the Nervos Common Knowledge Base (CKB), a public permissionless blockchain and level 1 of Nervos. CKB uniquely generates trust and extends this trust to upper levels, making it a trust network.

Moreover possesses the value to store of the Nervos network, furnishing public, secure and suppression-resistant custodianship services for fortune, personalities and other common knowledge created in the network.

The Nervos Common Knowledge Base (Nervos CKB for short) is a preservation concentrated,” Store of fortune “block chain and Architecturally it’s designed to smart support on- chain state and off- chain calculations,

Economically it’s designed to give sustainable security and decentralization. Nervos CKB is the base level of the overall Nervos Network.

Market Cap:

$520,117,585
₿8,363

24 Hour Trading Vol:

$97,010,439
₿1,565

24h Low:

$0.0159575
₿3e-7

24h High:

$0.019357
₿3e-7

Circulating Supply:

28,248,004,692

Nervos/Usdt Pair Observation

5 Crypto Currencies Under $1 Worth Buying In October 2021
Nervos/Usdt Analysis by Chikwem Chinedu Ogugua on Liquiditytradeideas

This pair is on a consolidation part after a swing high, pair heading to the resistance zone which may pull-back and retest the support zone 0.01000 before a bullish breakout/rally.

Akita Inu(AKITA)

100 decentralized community trial with it claims that1/2 the altcoin have been transferred to Vitalik Buterin and the other half were locked to a Uniswap pool and the keys burned.

24 Hour Trading Vol:

$19,660,750
₿316.06

24h Low:

$0.0000022
₿0

24h High:

$0.0000025
₿0

Total Supply:

100,000,000,000,000

Akita/Usdt Pair Observation

5 Crypto Currencies Under $1 Worth Buying In October 2021
Akita/Usdt Analysis by Chikwem Chinedu Ogugua on Liquiditytradeideas

The pair from the chart above is in range bound and has tested the resistance zone though may pull back and hit the mini broken support zone before breaking out..

SwiftCash(SWIFT)

Swift-cash is an open- source, self- funded system of decentralized governance and ecosystem, derived out of a desire to produce a digital store of value and a peer-to- peer cryptocurrency for diurnal transactional use along with cheat- evidence lotteries,

This can be played by anyone in the blockchain without any custodian or third-party service involved, as well as on-chain HODL/ Term deposits. it uses the Proof-of-Stake algorithm to reach agreement and allows up to 10 of maximum affectation to be spent on proffers that are embraced by enough stakeholders.

Another 10 of maximum affectation goes directly to stakeholders who help secure the network via Miners and Master-nodes, then the rest of maximum affectation which is 80 can go to HODL/ Term deposits, which are time locked in the blockchain between 1-12 months.

Market Cap:

$227,570
₿3.653706

24-Hour Trading Vol:

$0.12
₿0.000002

Circulating Supply:

189,465,829

Total Supply:

5,000,000,000

Swift/Usdt Pair Observation

5 Crypto Currencies Under $1 Worth Buying In October 2021
Swift/Usdt Analysis by Chikwem Chinedu Ogugua on Liquiditytradeideas

This pair is in the formation of a broadening chart pattern, from the chart above we can observe that the pair is in a range close to the support zone this is a call for a close watch as the pair may rally up soon.

Nest Protocol(NEST)

Nest Protocol is a decentralized mystic protocol that aims to deliver the fastest and most accurate prices to other Defi platforms. Their result involves collateral citation, arbitrage verification, and other modules to form a price-sensitive and attack-resistant mystic.

Market Cap:

$26,590,356
₿427.746

24-Hour Trading Vol:

$6,418,700
₿103.169

Circulating Supply:

2,029,506,592

Total Supply:

10,000,000,000

Nest/Usdt Pair Observation

5 Crypto Currencies Under $1 Worth Buying In October 2021
Nest/Usdt Analysis by Chikwem Chinedu Ogugua on Liquiditytradeideas

The pair on the 5 cryptocurrencies is on the bottom play forming a bearish pennant considered by technical traders as a bullish reversal chart pattern, nest/usdt pair is precisely on the button of the pennant/ support zone.

we may consider waiting for a breakout for entry confirmation. Above are the 5 cryptocurrencies & Here is a link to our Previous analysis/News on Crypto-currency.

Conclusion

The above-listed alt-coin is among the most watched of all cryptocurrencies as they have a high reward-to-risk ratio, what are your thoughts on this collection? Is any of them worth investing in or is this a total waste, kindly let us know in the comment section or forum?