Hello All....
Today I will try to join the class of professor @lenonmc21, about Trends, Supports and Resistances and Simple Chart Patterns. This is a very interesting class. well, I will do the homework by answering some of the questions given.
Define in your own words what is a "Trend" and trend lines and what is their role in charts?
Trends
Trends are one of the basics in technical analysis that traders must know. trend is the movement of a cryptocurrency price on the market caused by the activities of sellers and buyers. so it can be said that a trend will occur if a direction is formed following the increase and decrease in the price of a cryptocurrency. There are two types of trends that we often hear about, namely the bullish trend and the bearish trend.
A bullish trend is a cryptocurrency price movement in a market that is moving up or is experiencing an increase in price, while a bearish trend is a cryptocurrency price movement in a market that is moving downwards or is experiencing a price decline.
Trend lines
trend line is a line that is needed by traders to be able to determine and ascertain what trend is happening. A trend line is a line that connects the maximum or minimum points on a graph.
The role of trends and trendlines in charts
as we know from the basic explanation above, trend lines are important information that traders can use to find out what trend is happening so that traders can decide when is the right time to enter the market. in trading, making a decision on when to enter the market is very much needed, this all requires initial information such as knowing and determining what trends are happening.
Explain how to draw an uptrend line and a downtrend line (Show a screenshot of each).
Uptrend Line
screenshoot from tradingview
To draw an uptrend line is to connect the lowest points (support points) in a graph, while the lines are drawn diagonally upwards. as we can see in the picture above I have marked some points and I have drawn a line up to connect the dots.
Downtrend Line
screenshoot from tradingview
to draw a downtrend line is by connecting the highest points (resistance points) in a graph, while the lines are drawn diagonally downwards. as we can see in the picture above I have marked some points and I have drawn a line down to connect the dots.
Define in your own words what "Supports and Resistances" are and how we can identify both zones (Show a screenshot of each one).
Supports
screenshoot from tradingview
support is an event in the market when an asset experiences a price reversal from a decrease to an increase in the price of an asset. if we look at the chart above, we can define it as a reversal point from a downtrend to an uptrend. we can mark from the yellow candlestick (downtrend) that it has turned into a blue candlestick (uptrend) like the chart I edited above.
Resistance
screenshoot from tradingview
Resistance is an event in the market when an asset experiences a price reversal from an increase to a decrease in the price of an asset. if we look at the chart above, we can define it as a reversal point from an uptrend to a downtrend. we can mark from the blue candlestick (uptrend) that it has turned into a yellow candlestick (downtrend) like the chart I edited above.
Explain in your own words at least 2 simple chart patterns with screenshots.
Ascending Triangle
screenshoot from tradingview
Ascending Triangle is a pattern on the chart that occurs due to buyer activity that pushes prices up for some time. we can see the pattern of an ascending triangle in the chart above that the pattern was initially in the form of a diagonal line connecting the support zone then we could draw a horizontal line to get a resistance zone so that it took the form of an ascending triangle pattern.
Descending Triangle
screenshoot from tradingview
Descending triangle is a pattern on the chart that occurs due to seller activity that pushes the price down for some time. we can see the pattern of a descending triangle in the chart above that the pattern was initially in the form of a diagonal line connecting the resistance zone then we could draw a horizontal line to get a support zone so that it took the form of a descending triangle pattern.
Conclusion
In technical analysis, trends are the most basic things that traders must know. and traders must also know the levels of support and resistance in conducting technical analysis so that traders can know when is the right time to start trading, because to start trading requires analysis to get the expected profit.
Thank you for reading my homework
CC: @lenonmc21