4 Reliable Chart Patterns In Crypto Trading
Cryptocurrency adoption is one of the latest trends in business today. Many of the experts in cryptocurrency predicted that cryptocurrency is the future. This has proven to be true since even major companies are beginning to accept cryptocurrency payments for services and products. The only major challenge that is affecting cryptocurrency today is that the currency is very prone to fluctuations. It is not easy to predict the value of the cryptocurrencies because they are digital and they are not centralized. It is for this reason that charts have been developed that enable experts and investors to predict the events that may happen and influence the value of the cryptocurrency. The 4 reliable chart patterns in crypto trading There have been many carts that have been used in the past for crypto trading. However, many people consider these charts to be the Holy Grail. This should not be the case because these charts are mere tools that can be used to predict the events that may happen in the crypto world. There are new charts that have been developed that have a higher accuracy and they are guaranteed to give the best predictions.
- Bull flag
This is one of the patterns that is most accurate in the crypto world today. It is also referred to as a wedge or a pennant by some people. This chart is formed when the price gets into a consolidation phase which follows a strong uptrend. During the process of consolidating the price, there is a trend where the market gets prepared and gathers momentum for the burst up that will follow. This is a trend that occurs naturally, and the initial investors in the crypto trend begin to reap profits. The people who are just entering the trend are then getting geared up so that they are in a position to reap the profits in the next burst up.
2. Head and shoulders platform
This is one of the most common charts that people have heard about today. This is considered the most reliable and effective in crypto trading. To explain this rend in a few words, it can be said to be a trend that failed to rise. The definition of an uptrend is where there are higher lows and higher highs. Comparing that to the head and shoulder platform, the head and shoulder is when the last trend failed to get to the higher high or the higher low.
3. The rectangle
This resembles the bull flag pattern in that the price seems to be in between two lines. In most cases, it becomes a waiting game for investors in the crypto world. This is because there is no telling the exact position where the price will break off from the pattern. A bearish or a bullish rectangle can be used to predict the place where the price is more likely to break out from. You can invest when the price is very close to the lower end of the rectangle, when it is ready to break out. You can also opt to invest at the upper end of the rectangle, with the hope that you will catch the trade in time when the break takes place.
4. Cup and handle
This is a very popular chart in the stock trading market that is bullish in appearance. It has been working well for other investors and it should be allowed a span of up to 6 months in the stock market. In the crypto world, this period can greatly be reduced by half because crypto is faster. In order that the pattern can be more reliable, trading volumes have to increase significantly towards the end of the handle, when the prices are beginning to rise. The buy order should therefore be made when the price is breaking. This chart can be compared to the head and shoulder chart, with the cup being the bottom and the handle is a higher low of the crypto market. Conclusion During crypto trading, it may be helpful to be conservative. This is because this way, you are able to avoid taking too many risks and therefore lead to more benefits in the long run. The charts listed above are some of the leading charts in the crypto world today. It is important to note that they are just tools that are used to predict events in the crypto world so that investors are able to make informed decisions.
