Welcome to the 5th lecture on Cryptocurrency Trading. Today I am going to discuss Market Structure. But before I continue, I will love to do a quick recap of what we have discussed in the previous 4 lectures.
I started by introducing what financial market is. I discuss the different types of financial market, I also explained what instruments are and what tickers are. I discuss the 3 types of analysis which are technical analysis, fundamental analysis and sentimental analysis.
I have discussed in detail what technical analysis is and the different ways of representing price on the chat in a market which led to explaining candlestick in detail and the different candlestick patterns.
Today we are moving on to Market Structure.
Market Structure is the study of the behavior of the market.
We have 3 types of market which are
- Trending Market
- Ranging Market
- Choppy Market
Trending Market
There are 2 types of trending market which are Uptrend and Downtrend.
Uptrend is characterised by series of Higher Highs (HH) and Higher Lows (HL)
Downtrend is characterized by series of Lower Highs (LH) and Lower Lows (LL)
Any move in the direction of the trend is called the Impulse.
Any move that is counter trend is called Pull Back or Retracement or Corrective or Correction Move.
Support and Resistance
Support is the zone where price finds support from falling further.
Resistance is the zone that resist price from going up.
Trend Line
Trend Line is a line drawn to form a bounding for the price movement in market chart. For a trend line to be valid, we need two or more touches.
Ranging Market
Ranging Market is a market that has a defined top (Resistance) and Bottom (Support). Price moves sideways.
Choppy Market
It does a difined top and bottom and the market moves in a tight range.
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TO BE CONTINUED...
Read up my previous posts on Cryptocurrency Trading
- Cryptocurrency Trading Lecture 1: Introduction
- Cryptocurrency Trading Lecture 2: Technical Analysis
- Cryptocurrency Trading Lecture 3: Candlesticks
- Cryptocurrency Trading Lecture 4: Candlestick Patterns