• News
  • Celebrities
  • Finance
  • Crypto
  • Travel
  • Entertainment
  • Health
  • Others

Seeing Clues In Charts - Everything You Need To Know About Technical Analysis

Choosing a target is the first step in picking a cryptocurrency to trade on the cryptocurrency exchanges you've registered accounts with. To see the chart for a particular cryptocurrency, just click on the symbol in the Ticker or Instrument section on your trading screen. Then, you may study the current trends and any pertinent chart patterns that may be present.

This is how most charting works. You can start reading or understanding charts without actually seeing them. In most cases, users and investors use Trading View to get the most out of their charting studies. And with charts, we mean technical analysis.

If you want to learn more about technical analysis and charts, read more on this blog.

About Candlesticks

Munehisa Homma, a Japanese rice merchant and author of the first book on the psychology of markets, is often credited with inventing candlesticks in the 18th century. It wasn't until the last several decades that the rest of the globe rediscovered his concept and began employing candlesticks in charting. They provide a more complete picture of the market's fluctuations than straight lines.

Each day's closing price is shown as a dot on a line that connects all the dots on the daily line chart. There's a daily candlestick chart where each dot is replaced by an individual "candlestick," which depicts each day's high (the open), low (the close), and highest (the high) price (the close).

Patterns Within Patterns

The price begins to move in a lateral manner near the conclusion of the chart, which we refer to as a "basing" pattern. The selling pressure is fading, and individuals are buying and selling in equal amounts, keeping the price stable between the dotted lines of the graph.

The resistance line is on the top and the support line is on the bottom. It is a self-fulfilling prophesy for traders when the price reaches the support line and they start purchasing in the belief that the price will rebound off of the support line. It is also common for traders to sell in anticipation of an upcoming negative movement when the price is nearing the resistance line.

Since breaching a strong resistance line is generally followed by a big rise, the longer this base carries on, the more confident you may feel about the breakout. Basing lasts for the better part of a year in this example.

Charts and technical analysis
Charts and technical analysis

Chasing Breakout

is not advisable...

In the event that the breakout point is missed, what are your next steps? It's possible that you don't see the base pattern until it's already broken out. Maybe you're on vacation and only have half an eye on the markets. You may feel like you have no choice but to get on the bandwagon. It's a fresh rising trend, after all! Isn't there more money to be made?

You should avoid chasing breakouts. You may be thinking that as long as you don't sell your Bitcoins, you won't miss out on the Bitcoin boom that will ensue when the price eventually rebounds. The benefit of hindsight is undeniable. Unfortunately, you've violated rule number one, which is to take the money you've lost and go on--this is what we call "cut loss."

Keeping your finances in order includes avoiding false breakouts. Buy at the breakout point and place a stop-loss order to protect yourself from large losses in case of a steep drop in price below your stop-loss level. You may prevent yourself from losing money by placing a stop-loss order on a trading exchange.

Triangles Are Not Always Reliable

Charts are full of triangles. You'll start seeing them as soon as you start searching for them. If they don't have horizontal edges, they aren't very trustworthy as trading indications.

What About Wedges?

Pennants, sometimes known as wedges, are triangles with an upward or downward slope. Downward-facing wedges tend to break out higher than upward-facing ones. Most of the time, they are continuation patterns, which implies that they represent a brief response against the main trend.

Flags

Richard Schabacker coined the word "pennant." Also, he mentioned flags, a typical continuation pattern akin to the wedge/pennant, but with parallel lines. A rising trend is interrupted by periods of sideways movement, which may be upward or downward slanting. The breakout point from a flag, like a wedge/pennant, may present a favorable chance to leap into a continuing upward trend, especially if the flag's lines are horizontal instead of diagonal.

Head & Shoulders

Head-and-shoulders resemble the human head and shoulders. But it's beginning to sound as ridiculous as those individuals who believe the cloud outside their window looks like Elvis. Many realize that. But head-and-shoulders (H&S) is only a convenient shorthand for depicting a more complicated pattern. Based on considerable academic research, it's one of the most dependable patterns that may be used to increase trading profitability.

Volume Is Essential

In addition to price, volume is the most important metric. When looking at a daily chart, the volume is represented as a series of bars at the bottom of the chart, as indicated before. Volatility bars are often colored red or orange when prices have decreased and green or lighter if prices have increased.

There are several occasions when volume might be beneficial. As an example, breakouts are often followed by a substantial rise in trading volume after the market has been running sideways for a long period. However, if the volume does not rise, the breakout is likely to fail and be shown as a fake breakout.

Summary

Technical analysis is one of the best strategies to implement if you want to make money in stocks and crypto. Since crypto doesn't have fundamentals, you can always use technical analysis to back up your trade.

About The Authors

Camilo Wood

Camilo Wood - Every day, to make a conscious decision to do something, say something, or act in a way that will improve my work experience. I assist organisations in disrupting the status quo of transition. I teach them how to turn their community from enduring change to evolving through change using a realistic and repeatable structure.

Recent Articles

  • Crypto Accessories Every Crypto Holder Should Know About

    Crypto Accessories Every Crypto Holder Should Know About

    These days, crypto accessories and gadgets can be found everywhere. There is a vast selection of products available for purchase, ranging from cryptocurrency wallets to devices that make buying and storing NFTs easier. If you enjoy cryptocurrencies and would like to own some, trade some, and play around with it, read on. These Bitcoin accessories will quickly become some of your favorite electronic gizmos.

  • MoviesCouch Hollywood Movies Download – Down, Down The Drain

    MoviesCouch Hollywood Movies Download – Down, Down The Drain

    It looks like one site will let down film lovers who used to frequent it for movies that they can download for free. If you’re looking for MoviesCouch Hollywood movies download, prepare to be disappointed.

  • Best Lotion For Jerking Off That Won't Damage Your Skin In 2022

    Best Lotion For Jerking Off That Won't Damage Your Skin In 2022

    Many people nowadays are looking for the best lotion for jerking off that will enhance their self-pleasure moments while not harming their skin.

  • Gerard Butler Net Worth - The Real Leonidas Of Sparta

    Gerard Butler Net Worth - The Real Leonidas Of Sparta

    The Scottish actor Gerard Butler net worth is $40 million. Gerard originally majored in law, but he gradually drifted toward acting and grew to be one of Hollywood's most known faces.

  • Keanu Reeves - $380 Mill Net Worth, Career, Earnings And Lifestyle In 2022

    Keanu Reeves - $380 Mill Net Worth, Career, Earnings And Lifestyle In 2022

    A musician, actor, producer, and philanthropist, Keanu Reeves net worth is $380 million. He has acted in scores of movies throughout the years, some of which have grossed billions of dollars at the box office. He is likely best known for the John Wick and The Matrix movie series.

  • MoviezAddiction.Website – Feeding People’s Craving For Films, TV Shows

    MoviezAddiction.Website – Feeding People’s Craving For Films, TV Shows

    Addicted to movies and TV shows? Not wanting to make you become more obsessed, but have you heard about MoviezAddiction.website, a source of thousands of films and shows you can download?

  • Can You Trust Rhino Air Hockey?

    Can You Trust Rhino Air Hockey?

    Work and family take up so much of our time these days that it's surprising how little time we have left for our enjoyment and fun. But just because we're adults doesn't mean we have to make our whole lives about work. You need to play Rhino Air Hockey Table to add joy to your life, relieve stress, and connect with other people and the world around you.

  • How Much Is A Mail Order Bride? Mail Order Bride Cost Estimated

    How Much Is A Mail Order Bride? Mail Order Bride Cost Estimated

    Interested in mail order bride pricing? Our estimations of mail order bride cost will help you on your quest for a foreign soulmate. Read this to learn more!

  • Head Of AmCham Guatemala Juan Pablo Carrasco De Groote: The “Art Of The Deal” (Guatemala-style)

    Head Of AmCham Guatemala Juan Pablo Carrasco De Groote: The “Art Of The Deal” (Guatemala-style)

    For over 10 years, the head of AmCham Guatemala has been Juan Pablo Carrasco de Groote – the unchanging face of the chamber of commerce.