Record trends in cryptocurrency: a beginner manual with price action analysis

In the world of cryptocurrency, trends are a decisive aspect of investing. While technical indicators can provide valuable insights, the price action analysis offers a more intuitive way to identify trends and make well -founded investment decisions. In this article we will examine how the price action analysis is used to recognize trends in cryptocurrency.

What is price action analysis?

Price action analysis is a method that focuses on the visual behavior of prices during market lessons instead of relying on technical indicators such as diagrams and oscillators. It is based on the idea that past performance does not indicate future results, but reflects the current market stand.

How to use price action analysis in cryptocurrency

Follow the following steps to apply the price action analysis in cryptocurrency:

• Select a cryptocurrency : Select one or more cryptocurrencies on which you want to invest. The popular options include Bitcoin (BTC), Ethereum (ETH) and others.

• Open a charting platform : Select a serious diagram platform that supports several currency pairs. Some popular options are Binance, coin base and octopuses.

• Create a trend line : Use the “Trend” function on your selected charting platform and create a trend line that connects two price highs or lows within a certain time frame (e.g. 1 hour, 4 hours or 1 day). This will help you visualize the direction of the market.

• Identify support and resistance : Use the trend line to identify areas in which the prices tend to jump back or move further in the same direction. These are usually referred to as support levels for purchase and resistance for the sale.

• Search for divergences : Divergence occurs when a trend indicator (like a sliding average) has a strong contrast to the price campaign. This can indicate that the trend may be reversed and signal a potential purchase or sales option.

• Use Candlestick pattern

  : Analyze the shape and formation of candle resticks in your diagram to identify potential reversal or trend continuations.

• Monitoring on consolidations : Consolidation times are characterized by price stabilization in relation to a level of support or resistance zone. These can be persecuted with caution because they can indicate a possible reversal.

Common price campaign pattern

• Head and shoulders (H&S) : A classic pattern in which the neckline between two resistance levels and the head forms.

• Doji : A candle pattern marked by an upper wick over the lower wick over the lower wick, which indicates a lack of condemnation in the price campaign.

• Trend reversal like hammer, shooting star or Bullish Engulfing.

Tips and tricks

* Use several time frames : Analyze the price campaign via different time frames (e.g. 1 hour, 4 hours, 1 day) to identify trends that may not be visible in a single diagram.

* Pay attention to the volume : Changes to the trading volume can indicate a potential reversal or continuation of the trend.

* Note the market manipulation : Price action analysis should not be used as a means of manipulating the market. Always carry out thorough research and take several sources into account before making investment decisions.

Diploma

The price action analysis offers a unique perspective on cryptocurrency markets and enables investors to recognize trends and make sound decisions based on visual behavior and not just technical indicators. By using these techniques, you can achieve a deeper understanding of market dynamics and increase your chances of successful trade.

Remember that the investment in cryptocurrencies has considerable risks and it is essential:

• Always make your own research

• Set clear investment goals and risk tolerance

• Never invest more than you can afford to lose

Happy charting!