Most people who trade bitcoin or any other asset will try to use technical analysis to determine their trading strategy. The use of technical analysis as being highly criticized over the years for obvious reasons. Below is a brief list of reasons why technical analysis should not always be used as the only indicator of how assets will behave.

6. Humans Crave Patterns

One of the primary reasons technical analysis exists is because it allows anyone to determine a specific pattern. Unfortunately, every pattern one thinks to see is biased, as most people only see what they want to see. Humans find patterns meaningful and helpful. However, there are those who will share a specific pattern – or prediction – in the attempt to trick people into doing that trader’s bidding.

5. There Is No Proof Technical Analysis Works

Up until this very day, there are people who swear by technical analysis and those who think it’s utter vaporware. Both camps are right in their respective way. No one ever successfully provided trading analysis works, yet no one can disprove it either. People often tend to forget there is a normal statistical distribution of successful and unsuccessful traders. Technical analysis won’t improve one’s trading strategy, as there are dozens of external factors beyond one’s control.

4. Predicting The Future is Impossible

When it comes to using technical analysis, traders use past information to predict what the future may hold. Unfortunately for traders, no human has devised the gift of successfully predicting the future. Using previous information may hint at what could come in the future, but it is by no means a credible source to make accurate predictions. Trends and pattern will eventually be broken, yet very few seem to accurately “guess” when this happens.

3. Everyone Gets Lucky Now And Then

Some traders who rely on technical analysis to determine the bitcoin price movement will gladly tell you there is no other way to gauge the market. It is true some technical analysis predictions have been correct in the past, albeit there have been some clear misses as well. Everyone will get a prediction right every now and them, but that doesn’t validate the means used to get to this conclusion.

2. There is No “Skill” Involved

Many people assume people who conduct a technical analysis are some sort of geniuses. Nothing could be further from the truth, as one’s forecast is not better or worse than the next person’s. Throughout history, there has been no one who kept a clear record of successful predictions based on technical analysis, it is doubtful this situation will ever change.

1. Turning Points Are Impossible To Predict

When it comes to dealing with a free market such as bitcoin, there will be turning points determining the price movement. Predicting a turning point is impossible, as there are no clear indicators as to why and when this will happen. Even the best technical analysis in all of finance can’t predict turning points. This also makes it impossible to make accurate long-term predictions.

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