Steemit Crypto Academy Contest / S15W6 - Chartist analysis.

Hello and Welcome Steemians, today I'm here again to complete the challenge from Steemit Crypto Academy Contest / S15W6 - Chartist analysis. This challenge will improve information for readers about chartist analysis. So, let's learn about it and get started.

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_{What is chartist analysis? And the importance of chart patterns.}

For crypto and stock traders, there are lots of indicators, tools and techniques. Chartist analysis is a technical way to predict future prices by analyzing the patterns made by prices in the past. It is one of the basic techniques to put investments in stocks, and they're quite famous in crypto too.

How does it work, by psych of traders that put volume in the market of stock or crypto? There are many kinds of traders: scalp, intraday, and holding position traders. The scalp and intra-day traders make small bumps in the patterns, while those who have long positions make bigger bumps and patterns in the price chart. With the help of these changes, chartist analysis can be done. The patterns are examined by the highest and lowest limit of price in a specific time frame, and the line is drawn to show the resistance or support.

In sum chartist analysis is used for
1-Identify trend
2-Identify Counter trend
3-Facilitate in opening buy/sell positions
4-When teamed up with other tools, they both provide a more stable analysis

There are many examples of Chartist analysis; some of the most famous are;
1-Ascending/Descending Triangle
2-Double top
3-Double bottom
4-Wedge Shape Pattern
5-Head and Shoulder
6-Inverse Head and Shoulder

_{What is the shoulder-head-shoulder pattern? Show screenshots using the BTC/USDT pair. You can use another cryptocurrency pair if you wish.}

The shoulder head shoulder pattern, as the name suggests, has three components, The head, which is highest sandwiched by almost equal but lower than the head, increases in price. It indicates an upcoming price crash in the market. The psyche behind it is that traders believe that the highest price that the stock could achieve in a specific time is completed, and it will not go more than that. So intraday traders or scalp traders, if they identify one shoulder and head, can place their money on the second shoulder to get profit. But for long-term traders, it is a closing point.

_TradingView

In the above chart of BTC/USDT of 4H we can see that how a head is formed between two shoulders, a neck line is formed which act as a strong support and according to trend it should get break, and when it does after the second shoulder it goes very down. It is a very good example it can not be typical horizontal head and shoulders but it can be oblique too.

_{Explain the formation of the inverse head-shoulders pattern. Show screenshots of a cryptocurrency pair that displays this pattern.}

As the name suggests, the inverse head and shoulder pattern will work inversely. In a specific frame, the lowest point will be the head, sandwiched between two shoulders that are lowest but still higher than the head. It indicates an incoming uptrend in price in the market. The psyche behind it is that traders believe that the lowest price that the stock could achieve in a particular time is completed, and it will not go more than that. So, it is an opening point for intraday traders, scalp traders, or long-term traders.

_TradingView

In the above chart of BTC/USDT of 1H we can see that a head is formed between two shoulders as explained, a neck line is also formed which is a strong resistance breaking of it will be a strong signal for long position. Again a very good example that inverse head and shoulder can also be oblique.

_{For the technical analysis of the Steem, would you use chart patterns? Explain your answer.}

Using only one type of technical analysis can be riskier, therefore, I will use three different technical analysis on Steem price chart. It will prove strong idea of how Steem price is going and what is it expecting trend in the future. I used recent chart in short time frame for helpfulness and better insights.

_TradingView

In the above chart of STEEM/USDT of 4H, we can see that I have applied three different technical analysis tools, which are;
1-Inverse Head and Shoulders
2-Triangle
3-Wedge

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INVERSE HEAD AND SHOULDER
Inverse head and shoulder strongly favour the upcoming bullish trend as the price breaks the resistance represented by the head and shoulder's neckline.

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TRIANGLE
A triangle is formed after inverse head and shoulder, which also shows how, for some time, prices roam around in a small position, and then the resistance is broken by the price again, suggesting a solid bullish trend.

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WEDGE
Right now, the price between resistance and support formed by the wedge breaking of resistance will be a solid bullish point, but as the wedge is upward, the support can be broken, too.

According to this analysis, the market is risky right now. However, constantly checking the price is also essential for long or short positions.

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CONCLUSION

In conclusion, traders used chartist analysis techniques from the early days of trading to predict the upcoming price. These technical analyses are based on market behaviour and traders' psych. An understanding of different patterns and techniques can be helpful for any timeframe trader. Keen knowledge of these is what every trader should have.

I'd like to invite @sahmie , @khursheedanwar @ngoenyi , @steemdoctor1 , and @hamzayousafzai for this task.

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regards,
@abdu.navi03