[Trends] - Crypto Academy / S5W1- Homework Post for @reminiscence01".
Hello guys How are you all I hope that you all are doing great so today i am going complete my assignment so here it is -
1) a) What do you understand by a Trending market?
After examining these changes on the chart, we would say that prices follow a similar pattern within the market.
It can also be a chance to predict the long-term direction of prices by following a nonstop path. Once what is meant by a trending market, another issue that comes to mind is the direction in which it is believed to travel up and down.
We all have a tendency to understand from technical analysis that a price change usually changes the transparent direction of movement.
In fact, in essence, the direction in which a cryptocurrency's value moves over time is called its trend.
Within the cryptocurrency market, the most important essential consideration related to the trend is bitcoin.
The market is made up of the price movements of BTC. The market trend is exceptionally essential and can be followed for those who need to make a profit or not to lose.
Square measure is one of the main 3 trends within the market. This can be referred to as an associated uptrend, downtrend and sideways trend.
We are going to select the sideways trend collectively as a move segment. These trends should be analyzed as another drawback is important to the trend.
b) What is a bullish and a bearish trend? (screenshot required)
Bullish trend:-
An optimistic holder crypto shows a positive increase in price within the chart which simply indicates that the market is moving upwards.
The bullish holder also tells traders that the custodian has complete management over the market. The bullish trend remains once traders buy at a specific plus.
When the holder turns gullible or white, it means the shareholders are predicted to maneuver more than the marker.
This allows for candles like high and low, open and close etc., which I would justify in optimistic anatomy. In short, Bullish bearers show positive momentum within the market chart
Bearish trends:-
They inform traders that the value of associate quality is depreciating over time.
Traders can buy or sell depending on their professionalism strategy once they see several hard candles doing the opposite at once.
This is ideally a good time to buy with red as the value of the associate quality has decreased and in an optimistic market a trader can buy them at a cheaper price to make a lot of profit. Price may sell. Like the optimistic the pessimistic candle is also divided into five elements.
2) Explain the following trend identification and give an example of each of them. (Original screenshot needed from your chart). Do this for a bullish and a bearish trend.
i) Market Structure.
Market structure is the behavior of the market holder chart that we will use to see what position the market is in: whether the market is trending up (uptrend), downtrend (downtrend). I will be able to describe bearer chart behavior for an optimistic market.
Market structure for an bullish trend
In a bullish trend, the price should clearly be in a related upward direction, creating higher-highs and higher-lows.
This basically means that the new high should be higher than the previous high and the new high should be higher than the previous low. Once price fails to make higher highs, the strength of the optimistic trend weakens, and a potential trend reversal should be anticipated.
In the top 4-hours ETHUSDT chart, we can see that the price is making higher highs and higher lows. The new high square measure is significantly higher than the previous high and the new low is higher than the previous low. Price is unable to trade below the previous high and prior low, closing on top of the previous low.
Market Structure for a Bearish Trend
In a pessimistic trend, the price should clearly find a downside direction, making a low-high and a low-low.
It simply means that during a pessimistic trend, the new high is below the previous high as well as the new low is below the previous low.
The price is not able to trade on top of the previous high as well as close the high below the previous low. The strength of the pessimistic trend is weakening once the price fails to make a low-low, and a potential trend reversal should be anticipated.
A low-high and low-low are forming at the top of the 4-hours ETHUSDT chart. New Objective in Complete Retracement | part | Section | The split fails to break above the previous high point as well as the new low point square measure above the previous low
ii) Trendlines
One of the tools we often use in technical analysis is to draw the line. The trend line area unit of significant importance in the direction of the market.
We are only able to say: for an associate degree uptrend, we can connect the two low points and note their extension. Or, for a downtrend, you would combine the two highs and move on, noticing the widening of the road.
In an artifact that is in an associate degree uptrend and a line has been drawn, once the price touches the line, it finds support and moves up.
For those who acquire and sell within relevant artwork, this is a tool that will generate business profits. Unless the trendline is broken to the draw back, the price may continue to bounce back and push itself upwards.
Once the line is broken, it is time to exit the position. In an artifact that is in a strong downtrend and has a drawn line, once the price touches the line, it encounters resistance and moves down.
For those who acquire and sell within relevant artwork, this is a tool that will generate business profits. As long as the line is not broken upwards, the price may return and the instrument itself may remain down.
Once the line is broken, it would mean an increase and the position would also be entered by providing the necessary control with optional technical analysis tools.
3) Explain trend continuation and how to spot them using market structure and trendlines. (Screenshot needed). Do this for both bullish and bearish trends.
For a trend to occur the price must fluctuate and move slightly below the trendline. During this method, repetitions are up and down.
As long as the trend continues, there will be those who take profits and exit, and there will be others who enter replacement positions when the price goes down.
During this method, the continuation of the trend is ensured. Area Unit A bull trend and a bear trend have 2 small prints.
Bullish trend:
The new high should be higher than the previous high.
The new low must be higher than the previous low.
Bearish trend:
The new high should be below the previous high.
The new low must be below the previous low.
In alternative words, while the resistance area unit tested repeatedly and controlled the bullish trend, the support area unit was breached by testing once again inside the pessimistic trend.
If these segment area units are deflated, it means that the trend is weakening and hence there may be a tendency to change the direction of the trend. During this, there will be mention of double high or double bottom formation.
While this may be the case in terms of market structure, trend lines matter. If the line is not broken then it is valid to recognize trend continuation.
If there is a breach that crosses the trend line, it could indicate a reversal. Again, in the examples below, this will be seen for each bull and therefore the bear.
4) Pick up any crypto-asset chart and answer the following questions -
i) Is the market trending?
When we get the chart of Daily Candle. At the beginning of the October month, we are able to break the pessimistic trend. As of these days, it is not in any uptrend or downtrend, it draws a zig-zag between support and resistance in a very horizontal position. So there is no trend within the market which we choose.
ii) What is the current market trend? (Use the chart to back up your answers).
Conclusion:-
According to the eventual trend of the market, the movements of listed cryptos within the market should be closely scrutinized, and positions should be entered or exited.
It is not necessary to use only one technical analysis tool, once the signal received from the instrument has been verified with various tools it should always be listed.
Once we've worked through this detailed coaching and school assignment as well, I think we're better able to notice when the market is in a very optimistic, pessimistic trend or is over.