Cryptocurrency chart patterns
Peaks are reached at areas of resistance, troughs at areas of support. Support and resistance are central themes to interpreting not only charting patterns, but also a number of Mathematical Indicators. Support and resistance lines particularly within recent price action help you determine trade entry and exit levels, by providing estimates on the upper and lower trading range. Before placing trades, crypto traders should assess potential trading ranges as estimated by support and resistance levels.
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- Is Bitcoin headed towards record high? Explained in 4 charts
- Keep up to date with Liquid Blog
- How to Read Charts in Crypto Trading?
- Financial Technical Analysis Crypto Narrative Chapter 5 Classic Chart Pattern
- How to Read Crypto Charts?
- Cryptocurrency | Technical Analysis & Trends
- A Beginner Crypto Trader's Guide to Reading Candlestick Patterns
- Top Chart Patterns Every Crypto Trader Should Know
- Chart patterns
Is Bitcoin headed towards record high? Explained in 4 charts
We as humans feel comfortable with patterns, which are homologous with habits, and from that, we can see and start patterns anywhere we go without even noticing a lot of the times we do! Thankfully, that also is true for and can be applied to trading. These patterns, once identified, can give you significant clues regarding where the price will head, usually with high accuracy.
They form after the price action meets the resistance or support twice, and they usually signify a loss in momentum, so a reversal is very likely. A good place for a stop-loss order would be below the lowest point of the first or the second low of the double bottom pattern depending on which one is lower , and a good take-profit would be the upper base - resistance between the swings forming the double bottom pattern.
And as with every other pattern that we are going to discuss here, the bearish version of this pattern known as double top looks exactly like a mirror image and is only traded in the opposite direction. Head And Shoulders A Head and Shoulders pattern forms when the double top or bottom gets a higher spike in the middle.
Likewise, it also signals an upcoming reversal. In the same chart, we can see a Head and Shoulders pattern emerging. Here, a good place to enter a SELL order was after the market started to fall when the Head and Shoulders pattern was confirmed after the third bearish swing - the right shoulder , with a stop-loss above the Head the middle swing , and take-profit at the nearest support.
Flags and Pennants These are different from the previous two in that they often signal continuation of the current market trend. They form after a steady trend meets a sideways trend or correction as traders take a break, but the price quickly breaks above this brief trend's limits, continuing the previous momentum.
In this 5m Bitcoin chart, we can see both a flag blue and a pennant green pattern this one is usually similar to the triangle pattern form:. As you can see, the trend continues after a brief break in both cases. Usually, the best way to approach this is to open a trade as soon as the pattern is confirmed broken out , place the stop-loss at the opposite side of the entry price below the lowest or highest price level of the chart pattern , and your take-profit above the nearest support or below the nearest resistance.
Also, one more popular technique can be used for placing Take-Profits that I will show you at the end of this article. Triangles Triangles can come in two shapes: symmetrical or asymmetrical. The former only lets traders know that a breakout is coming with no clear direction, but asymmetrical triangles point out the direction of the breakout, usually in the direction of the straight side of the triangle pattern.
I personally trade both versions of the triangle pattern, both symmetrical triangles as well as asymmetrical. You can see that the first blue triangle was broken in the straight side of the pattern. It's not difficult to spot the form of a cup and a handle. This chart pattern indicates that an upwards trend is taking a break, but will continue higher after the form shows up and the high of the handle is broken further upwards.
As you can see, the trend keeps going much higher after the handle forms, so it would be a great idea to go long after the handle, with a stop-loss at the lowest point in the handle. A Take-Profit target can be set to the nearest resistance or based on the technique that I am going to show you right after the following last chart pattern. Wedges are pretty much the same as triangle patterns, but they are usually ascending or descending.
The ascending wedges signal an end of bullish trend and correction and that the bearish breakout will come soon. How to set profit targets with chart patterns? Here is an easy and profitable technique for placing profit targets for trading triangle chart patterns. This is the trade that I made based on a triangle pattern and in the chart you can see how I exactly traded it. Place the Stop-Loss above the triangle pattern. And now the interesting technique regarding placing Take-Profits.
Every chart pattern is created by various price swings and here, on the previous chart, I highlighted the 1st swing that started the whole triangle chart pattern. When the breakout happened, I simply projected the length of this swing exactly from the point of the breakout of the triangle pattern. You can see for yourself how accurate it was in this case. There were no support levels that could be used for placing a Take-Profit in this case - only empty chart space - so without this technique, it would be pretty unclear where it is the best to place the Take-Profit.
As you are probably thinking now, this technique can be used in pretty much the same way with pretty much every other chart pattern as well. It seems easy and it can be! Trust me, if you gain enough experience, knowledge, and education, only these chart patterns are enough to make profitable trades on Bitcoin and other Cryptocurrencies. Of course, there are other important aspects to staying a profitable trader over the long run, and for that, be sure to visit our sections about trading psychology and money management.
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Keep up to date with Liquid Blog
Author: Nicolas Tang Date: January 21, Triangle patterns are a variant of continuation patterns, indicating whether a particular trend is likely to continue. They tend to appear often in the bitcoin and other cryptocurrency markets. Therefore, BTC traders can use triangle patterns as one means of timing a trade. Triangle chart patterns form with two trendlines that converge to a point. They come in three types: ascending triangle, descending triangle, and symmetrical triangle.
How to Read Charts in Crypto Trading?
In the crypto universe, knowledge is key. The sooner you get hold of it, the better your chances are to make a fortune. Learn how to read candlesticks to predict the price movements of coins. While reading these patterns cannot guarantee a profit, many expert traders have proven that as long as you follow the right trading strategy and stick to it, you are likely to make a profit in a span of multiple trades. Note that predicting chart patterns and price movements yield probabilistic results, not certainties. There may be times when you perfectly execute a trade and still end up with a loss, and vice versa. Regardless, you need to stick to your strategy in order to make sustainable long-term profits. Join us in showcasing the cryptocurrency revolution, one newsletter at a time. This creates certain patterns to appear in charts if enough people participate in a particular market.
Financial Technical Analysis Crypto Narrative Chapter 5 Classic Chart Pattern
Chart patterns are the bread and butter of any technical trader, and it is important to understand what they mean, and know how to act accordingly. Instead of thinking about patterns as a way of determining whether price goes up or down, think of chart patterns as regions of consolidation, whereby breaking outside of the pattern can lead to a sustained breakout with volume. Always let price action tell you what to do, rather than predict where the price is going ahead of time. If your position goes underwater, make sure to follow your trading rules and cut your losses when they go beyond your threshold, as laid out by the parameters of your trading rules and strategy.
How to Read Crypto Charts?
Reversal patterns are those chart formations that signal that the ongoing trend is about to change course. If a reversal chart pattern forms during an uptrend , it hints that the trend will reverse and that the price will head down soon. Conversely, if a reversal chart pattern is seen during a downtrend , it suggests that the price will move up later on. In this lesson, we covered six chart patterns that give reversal signals. Can you name all six of them?
Cryptocurrency | Technical Analysis & Trends
One of the key processes of any trading activity is reading the charts that show the price movement of commodities, securities, or other assets during a specified period of time. They are an integral tool for traders to decide their next move — whether to invest in an asset or stay away from it, whether the asset has been stable or volatile in the past. These charts even give an insight into whether the asset is likely to rally, crash, or stay where it is in the near future. There are several forms of charts. It is widely used in cryptocurrency trading and all investors should know how to read it. The candlestick chart requires training to decipher.
A Beginner Crypto Trader's Guide to Reading Candlestick Patterns
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Top Chart Patterns Every Crypto Trader Should Know
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Stay up-to-date with custom price alerts and detailed insights about thousands of cryptocurrencies on all major exchanges. If you want accessible crypto charts for the most liquid and capitalized currencies, I really don't see a better option. At least without designing your own app, or using a desktop. I went through a phase where I experimented with every different easy-to-read candle and bar thing available for crypto trading; ultimately I use this one almost exclusively even if my desktop is sitting there.