[ SEASON 3 | Week 3 ] Steemit Crypto Academy Homework Post for @lenonmc21 | Trends, Trend Line, Support, Resistance and Simple Chart Patterns |
Hello friends .... !!!
Meet again with me Ichsan Angga P on this Steemit Crypto Academy Homework Season 3 Week 3.
Today I will finish my homework About Trends, Trend Line, Support, Resistance and Simple Chart Patterns given by professor @lenonmc21.
1. Define in your own words what is a "Trend" and trend lines and what is their role in charts ?
So here I will explain about "Trend" and "Trends Line", for seniors or people who have been in the world of cryptocurrencies for a long time must be familiar, but for beginners they may be a little confused by the two meanings, so here is the explanation :
Trends
Trend is a condition or trend of movement in the trading market towards prices that move in a certain direction that has a period of time or with a certain period as well. There are several designations for conditions or trends in the Cryptocurrency trading market such as "Uptrend" where price conditions on the trading market tend to increase, "Downtrend" where price conditions on the trading market tend to decline, and "Sideways" where price conditions on the trading market are tends to have a fixed price, this Sideways trend also has another nickname, namely Trendless which means that there is no trend, or movement in the trading market against that price in a fixed and horizontal condition.Trend Line
Trend line is a line that is used in technical analysis to see the movement of asset prices in the trading market, where the trend line is created from several points on a chart with a line that has a certain length which if the line is drawn to follow the points on the chart if experiencing an uptrend or "uptrend" then the line will form an upward pattern, if in a "downtrend" condition then the line will form a downward pattern, and if in a "Sideways" condition then the line will form a pattern horizontal. Remember this is a trend line which is used to analyze price movements, so try to be careful in drawing trend lines, so you know correctly about price movements.
So Trend is a price movement that has an uptrend or "uptrend", Down or "downtrend" and Flat or "Sideways", while Trendline is a trend line that is used in technical analysis by connecting several points from the chart which if it forms an ascending pattern. then "uptrend", a downward pattern means "downtrend" and if the line forms a horizontal pattern then "sideways", so the trendline is more towards Forming a line to read the movement of the trading market against the selling price.
2. Explain how to draw an uptrend line and a downtrend line (Show a screenshot of each).
As explained above, that the trend line is a diagonal line that connects the points on each price chart on the trading market, I will try to explain how to draw an Uptrend line or a Downtrend line, like this :
- Uptrend Line
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So the first step to drawing an uptrend line is that you have to look at the dots on the chart of the asset trading market you are reviewing, to draw an uptrend it requires at least 2 points on the chart, each of which will be connected by the way you draw a straight line. connecting each of these points, you can see as in the picture above for the BTC/IDR pair, that the straight line that we drew earlier touches every support point, in my picture there are 3 support points touching each other, so that's the way to draw an uptrend line.
- Downtrend Line
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So to draw a Downtrend Line is the opposite of drawing an Uptrend Line, where you see the points on the trading market chart that you are reviewing, then you draw a straight line connecting each resistance point on the chart, you can see in the picture above that the straight line what I drew was touching every resistance point, and there were 4 resistance points connected to each other, so that's how you draw a Downtrend line.
So the thing you need to remember to draw a trend line is that the dots are connected on each chart, so to draw an Uptrend Line or a Downtrend line it requires at least 2 points that are connected to the line you drew, if there is only 1 point, that's you can't draw a line to confirm a trend in the trading market.
3. Define in your own words what "Supports and Resistances are and how we can identify both zones (Show a screenshot of each one).
In the world of cryptocurrencies, it is very important for a trader to carry out technical analysis of the asset they want to trade, in which a trader must determine the Support and Resistance points on the trade, so that a trader knows how the conditions in the trading market are, I will explain about Support and Resistance, as follows :
Support
Support is a price condition that is at a certain level, where the downtrend was successfully arrested as a result of a very high increase in buying activity for the asset, which we know that when the price of the asset decreases, investors will definitely buy the asset. Therefore, the asset will experience a change in position, because this very high buying interest makes the asset crawl from a Downtrend to an Uptrend, which at the time of the reversal of this condition will form an angle called support.Resistance
For resistance, it is a price condition where the uptrend cannot be stopped as a result of increased selling activity on the asset, which we know that when the price of the asset increases, investors will definitely sell the asset. Therefore, the asset will experience a position change, because this very high selling interest makes the asset crawl from an Uptrend to a Downtrend, which at the time of reversal of this position will form a spike called Resistance.
How we can identify both zones (Show a screenshot of each one)
To identify Support and Resistance, you must first draw a connected line at each point on the chart in your review asset trading market, as I did in the image below for the BTC/IDR pair.
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So after you draw a line like the picture above, then you know the support and resistance points found in the trading market you are reviewing, which is that Support and Resistance are indicators used to see price movements in the crypto assets you are reviewing, how to identify them is very important. easy, that is, if at the support limit it is a high market condition in buying interest because asset prices are low, this is what causes asset values to increase due to high buying rates by investors. On the other hand, at the resistance limit, there is a high market condition in selling interest due to high asset prices, which causes a decrease in asset value due to high selling rates by investors.
So the zone can also be used as a reference by investors regarding future asset movements, whether he will experience an Uptrend or Downtrend, remember Support and Resistance are important indicators, so it takes time to learn it, not just draw a line without a definite analysis
4. Explain in your own words at least 2 simple chart patterns with screenshots.
So in the analysis of price behavior on the trading market, traders and investors use various methods with chart patterns, which we know that there are so many types of chart patterns used in conducting price analysis on the assets we want to trade, but on this occasion I will try to give only 2 graphic patterns, namely:
1. Double Top
In the Double Top Chart Pattern, it will occur if there is a change in the trend that occurs in this Double Top chart, which indicates that the activity on the asset dominates sales and there is less buying activity on the asset, that's how to know about the behavior trading market that forms the Double Top chart pattern.
The double top is also very easy to recognize, this pattern is usually marked by asset prices that will experience a slowing movement when the asset price has reached its peak point. At that time, the asset price will automatically fall again, which Double Top is the two peaks of the price stop before the market price will fall back to its initial position.
It can be seen in the example below that I took the BTC/IDR pair, as follows:
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2. Head And Shoulder
This Head And Shoulder pattern is also very often used by traders in analyzing prices on the trading market, in this pattern there are 3 peaks, of which the highest peak acts as "Head", and the other 2 peaks act as "Shoulder". Each pattern has a behavior related to prices on the trading market, so when the First Shoulder Pattern is formed, before it goes down again the asset will form a Head Pattern, after the Head Pattern is formed there will be a Second Shoulder pattern, after that the price will experience drop back.
Which means that this Head and Shoulder pattern is a sign of the weakening of an asset price, with reference to the head section which is flanked by two Shoulder patterns, and after that it will eventually experience a downtrend.
Here I take an example for the Head And Shoulder pattern on the ETH/IDR pair, as follows:
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Conclusion
In the world of cryptocurrencies, analyzing prices on the trading market is very necessary, starting from looking at trend movements, which aims to determine trend behavior in the future, this is in order to achieve big profits.
Furthermore, on the Trend Line it is a line that connects every point on the chart that is connected, at least 2 points on each chart in order to draw a trend line, this trend line is drawn with the aim of seeing the behavior of the trading market, with the same function, namely to perform analysis of the market, on the Trend Line there is a point of resistance and support, from here traders can determine when to buy and sell the assets they have
At the last conclusion, which is about graphic patterns, which patterns are also very helpful for traders in analyzing the assets they want to trade, because of this graphic pattern we can see the behavior and movements of the trading market that have occurred or will occur in the future. next
Last word
That's the task that I have completed from professor @lenonmc21 regarding Trends, Trend Line, Support, Resistance and Simple Chart Patterns In completing my assignment, I realize that there are still many meanings that are far from perfect, therefore I apologize to friends if there are still many mistakes, and hopefully friends will be happy to give good suggestions or input on my posts.
Thank you all, I hope this post can help you all to understand more about Trends, Trend Line, Support, Resistance and Simple Chart Patterns.