It is critical to understand technical analysis if you want to become a successful Cryptocurrency trader. For example, you must be familiar with the popular chart patterns that appear regularly on cryptocurrency charts.
Chart patterns are distinct candlestick formations made up of a variety of candlesticks that make prominent figures in the chart. These candlestick patterns aid in predicting the possibility of a specific market behavior in the near future.
Chart Patterns Can Be Divided Into Three Groups
Bullish patterns signal that an uptrend is likely to continue. Bearish patterns indicate that the price will most likely continue to fall. The reversal patterns are the third group: Those few well-known chart patterns frequently indicate that the prevailing trend is coming to an end, and a price breakout in the opposite direction can be expected.
In all time periods, the well-known chart patterns may be found. As a result, the patterns listed below may be found in both one-minute and daily charts.
Despite the fact that those patterns are no assurance of a certain market behavior, the possibility of the projected market move is much higher than the opposite behavior.
Essentially, chart analysis may be used to lay out your trading strategy ahead of time. That is, you should have a strategy in place ahead of time, based on the research, of where to place your orders based on what you predict the market to do in the near future.
The indicators let you plan ahead of time where you should set your target, such as setting profitable sell orders at levels that are most likely to be hit.
Of course, no price movement can be guaranteed, but experienced traders work with probabilities – and being correct in more than half of the time is enough to make money.
The Three Types of Chart Patterns
Bullish Patterns (price going up)
- Flag
- Pennant
- Measured move up
- Symmetrical triangle
- Ascending scallop
- 3 rising valleys
- Cup with Handle
- Ascending triangle
Bearish Patterns (price going down)
- Symmetric triangle
- 3 descending peaks
- Descending scallop
- Descending triangle
- Flag
- Invertede Cup with handle
- Measured move down
- Pennant
Reversal Patterns
- Head and shoulders top
- Tops rectangle
- Double bottoms
- Diamond bottoms
Conclusion
So, when you're looking at crypto charts or any other tradable asset's graphs, you should be able to see those patterns right away. Take a minute to discover how they appear, and you'll quickly get accustomed with them – especially after you start recognizing them in real-time price fluctuations.
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