What is a trend analysis? Why do you need one?

In this video I can talk with you about trend analysis. So we need to do a trend analysis in order to judge whether a coin is going to go up in value or not. Now in traditional for instance stock trading you need to look at the company. The same thing you also have to do with of course the company that issues the cryptocurrency. Nevertheless the connection between the actual price and the value of the company or what's behind that technology is not as close that say it is closely linked for instance in stock trading. So you should emphasize for yourself to look at the chart. So you need to do a trend analysis in order to be able to judge whether a coin is going to go up in value or not. So first of all what exactly is a trend analysis now. The definition of a trend analysis is in financial markets traders and investors using a trend following strategy believe that prices tend to move upwards or downwards over time. That is the only thing that really a trend analysis is we want to figure out. All right. If for instance the price of a certain coin of a certain stock let's say going up or is it going down. Now when the price is going up we want to go along if the price is going down. We're going to go short. So you want to sell a coin. So what exactly is that special about trend analysis now. A trend analysis will in no case at all be 100 percent true. Most of the time you look for instance in the past and you think. Right. This happened already a couple of times in the past and I'm pretty sure that the chart that we are looking at right now looks like the chart in the past before a certain movement happened. So what we say is because we learn from history that after such a movement often for instance an increase or a decrease in the price happens it might happen this time again. So basically we base everything on history. What we want to do is we want to spot the trends and we want to invest money in that trend before that trend is actually moving in the direction of where we thought it's going to go. And this is how traders make money. So we all try to forecast at least 50 percent of all trades correctly. So 50 percent of all movements have to be correct in order for us to make money. Now in most cases even four out of 10 is enough. Nevertheless we want to be certain in 50 percent of all cases or we at least when it hit 50 percent of all coins and we want to make sure that 50 percent of our predictions are correct at least whether it's going up or going down. But the problem is and this is something that many traders will tell your platforms. We are 100 percent certain that this cryptocurrency is going to make a lot of money. Don't believe these people. There is no 100 percent certainty. There isn't even a 99 percent certainty most of the time you are literally gambling not cryptocurrency. You know I have to be frank with you I don't want to tell you anything that was not true but cryptocurrency is often about gambling sometimes. I mean trading decisions where I didn't even know why of course at my systematic growth as I looked at all the data they could generate. But I said you know I have that feeling I want to invest some money and often it turned out to be quite good. But of course if you don't have that intuition if you don't have that feeling you're of course always on the stick to your systematic process and never believe that you're 100 percent certain never be sure about any trade. Always be analytical and always reflect on your process. So in the next couple of videos what we're going to do is we're going to have a look at trend analysis and I'll show you step by step how to analyze charts how to for instance draw certain lines that will indicate whether a stock or actually cryptocurrency is going up or down and that will also help you to find better decisions to make bad decisions in the crypto world. So right. It's not your fault. Video thank you so so much for watching and we'll see each other in the next one.