The 10 Commandments of Technical Analysis: Follow Them to Succeed in Trading!

March 2, 2022

These are the Ten Commandments in using technical analysis for designing trading strategies.  My goal with this article is to provide you with an in-depth look at my trading strategy, attitudes, principles, and tactics. They are some simple but well directed rules or laws to being successful in your trading, and you may not like the consequences if you break one of them. By studying and incorporating these commandments into your existing market framework, they should help you execute your own winning trades. These Ten Commandments of Technical Analysis have been tried and tested by other traders before you. You should take heed and learn from them because they may just help you to survive to trade another day. So here they are, my 10 Commandments of Technical Analysis.


First Commandment – Never Purchase on Hype

If you are purchasing because everybody on Facebook says it is a good idea, it is most likely a bad idea, because the gains are already at a peak and you are probably going to end up losing your money. To beat the hype, you should use technical analysis. It is very important to purchase in before everybody is talking about a coin.


Second Commandment – Technical Analysis Is an Opinion Based Art

Technical analysis is an opinion based art and you might read a chart completely different than somebody else on the internet. That’s the reason why you should learn to do your own technical analysis (Here is an example). Either do the technical analysis on your own, or find one person (preferably professionals who make forecasts for a long time in different markets, not only crypto) you trust. You are going to get a lot of different opinions if you listen to everybody.


Third Commandment – Do Not Follow Everything Technical Analysis Tells You

Technical analysis is great. However, it is not everything and one of the largest drawbacks of technical analysis is that it only uses quantitative data. This means that the numbers are the only thing that you are dealing with. Crypto’s are easily affected by news, so next time you are looking to make a trade based on your analysis, you should check the news first


Fourth Commandment – Becoming Rich with Crypto’s Is Not a Reality

Cryptos are not going to get you rich. Many people think that they are going to double or triple their money in a month with cryptos. But everyone would quit their jobs and do it if investing was easy. It is very important to do a lot of research and find a good strategy. Making money will take some time. However, in the end it will all be worth it.


Fifth Commandment – Never Use Technical Analysis on Low Market Cap Coins

People send me a lot of questions about small coins that I have never heard of. I never try and use my algorithms with these coins. The reason for that is that it is MUCH less accurate. Indicators become overly reactive and they are much less trustworthy when coins are extremely volatile.

Sixth Commandment – Do Not Use Only One Indicator to Create a Purchasing Decision

You should think of indicators as verification tools. Since every indicator is verifying different aspects of a coin, you never want to only use one indicator to verify a coin. You should use multiple different indicators so that you know your verifications are correct.


Seventh Commandment – If You Are Going To Purchase, Purchase Fast

Indicators usually give you a late signal, so you do not want to wait too long after the indicator says to purchase or else you are going to miss out on gains. It is very important that you pay attention to your indicators and pull the trigger when the stars align.


Eighth Commandment – Know What Gain You Want If You are Short Term Trading

If you are short term trading, you should never go into a trade without an idea of a gain that you would want. In fact, I normally put sell orders in at the percent gain that I want because I will automatically get that gain once the coin hits that price. This strategy is great because I do not have to sit and watch my computer all day.


Ninth Commandment – Compare Coins to US Dollar (Or Any Other Solid Currency)

When you are looking at an indicator on a chart, the result of the indicator depends totally upon what currency you use to compare your coin to. Many websites will compare coins to BTC by default, but my opinion is that it is best to compare coins to US Dollars (or any other solid currency). The reason why I think that US Dollars are better option is that BTC fluctuates much more than US Dollars, and your technical analysis of a coin could be skewed by the performance of BTC rather than the coin itself.


Tenth Commandment – Do Not Make a Trade You are Not Confident with

If you are not feeling confident and are scared to make a trade, DON’T DO IT! Crypto investing is really risky if you are not sure what you are doing. It is not worth losing your hard earned money over a scary trade. The thing to remember is to do a lot of research, find good strategy and be confident with every trade that you make.


There you have it, the 10 Commandments of Technical Analysis. The lesson to learn here is that no trader is perfect and that everyone makes mistakes. Technical analysis can only increase the chance that you will make correct decisions, which means that you should try to treat bad trades as a learning experience.

I recommend you print these commandments out and put them somewhere near your trading area. The market can be unforgiving, so from time to time you might want to check this list to evaluate whether you are violating any of these Commandments. If you disobey one of these Commandments you will probably experience that sick feeling in your gut as you watch your trading capital disappear.

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CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of

Rene Peters

Rene Peters

Rene Peters is editor-in-chief of CaptainAltcoin and is responsible for editorial planning and business development. After his training as an accountant, he studied diplomacy and economics and held various positions in one of the management consultancies and in couple of digital marketing agencies. He is particularly interested in the long-term implications of blockchain technology for politics, society and the economy.