{"id":4196,"date":"2024-11-09T14:17:49","date_gmt":"2024-11-09T14:17:49","guid":{"rendered":"https:\/\/cryptoproguide.com\/%d1%82%d0%b5%d1%85%d0%bd%d0%b8%d1%87%d0%b5%d1%81%d0%ba%d0%b8%d0%b9-%d0%b0%d0%bd%d0%b0%d0%bb%d0%b8%d0%b7-%d0%ba%d1%80%d0%b8%d0%bf%d1%82%d0%be%d0%b2%d0%b0%d0%bb%d1%8e%d1%82-%d0%b4%d0%bb%d1%8f-%d0%bd\/"},"modified":"2024-12-19T13:11:28","modified_gmt":"2024-12-19T13:11:28","slug":"technical-analysis-of-cryptocurrencies-for-beginners","status":"publish","type":"post","link":"https:\/\/cryptoproguide.com\/ja\/technical-analysis-of-cryptocurrencies-for-beginners\/","title":{"rendered":"Technical analysis of cryptocurrencies for beginners"},"content":{"rendered":"
<\/p>\n
Traders can predict future digital coin rates by studying past price movements. Technical analysis is based on the idea that history repeats itself. Guided by the methodology, it is possible to determine likely market entry and exit points using indicators, trading lines and trading volume data. This material will reveal the basics of technical analysis of cryptocurrencies for beginners. Knowing the rules and patterns by which the market works allows you to make money on changes in coin rates without evaluating protocols and tracking news.<\/p>\n
What is technical analysis of cryptocurrency charts<\/h2>\n
This method is considered one of the key to profitable trading in financial markets. Traders make predictions of price movements by analyzing past asset charts.<\/p>\n
The basic postulate of technical analysis states: in similar situations, market participants perform the same actions.<\/p>\n
They are controlled by emotions – fear, panic, greed, euphoria. Knowing these peculiarities, we can guess how events will develop in the future. Such tools are used in technical analysis:<\/p>\n
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Indicators. <\/strong>With their help, you can get signals about the likely direction of movement of rates. Mathematical formulas are used for calculation.<\/li>\n
Figures. <\/strong>This is a sequence of candlestick formation, which forms recognizable graphical patterns. Based on them, users can make trading decisions – to buy, sell or stay out of the market.<\/li>\n
Trend lines.<\/strong> Traders connect the highs or lows of the price. Line breakdowns and bottom\/top tests indicate a change in trend.<\/li>\n
\u53d6\u5f15\u91cf\u3002<\/strong> Watching cash flow helps to make more successful trades.<\/li>\n<\/ul>\n
History of creation<\/h3>\n
Technical analysis originated long before the emergence of cryptocurrencies. It was first used to predict rice prices in Asia in the 18th century. Japanese trader Homma Munehisa used it to look for patterns of rate movements on candlestick charts. Contributors to the formation of thechanalysis also included:<\/p>\n
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Charles Dow (1851-1902).<\/strong> He founded The Wall Street Journal and published a series of articles analyzing the American stock market. His method is now known as the “Dow Theory”.<\/li>\n
Richard D. Wyckoff (1873-1974).<\/strong> Began his career as a stockbroker and founded his own company at the age of 25. Developed a methodology for analyzing supply and demand, according to which any move in the market can be divided into 4 stages – accumulation, price momentum, distribution and downward movement. Wyckoff’s model has been successfully used for over 100 years in the stock and cryptocurrency markets.<\/li>\n
Ralph N. Elliot (1871-1948).<\/strong> Developed the wave theory of stock market movements.<\/li>\n
William Gunn (1878-1955).<\/strong> Believed that anyone can succeed in the market if they use methods of mathematical forecasting of rates. He developed such tools as “Gann’s angle”, “Gann’s grid”, Gann’s fan” and others.<\/li>\n<\/ul>\n
The theory of techanalysis<\/h3>\n
Beginning traders may think that cryptocurrencies move chaotically. But supporters of technical analysis believe that it is possible to find patterns on the charts and predict the future direction of quotes. The movements on financial markets help to predict the study of crowd psychology. The main idea is that in similar conditions traders behave the same way under the control of emotions.<\/p>\n
To apply techanalysis it is not necessary to take into account the news or the fundamental of the asset. It is believed that all factors that can influence the rate are already embedded in the price.<\/p>\n
Proponents of the method can build a model of the asset movement, determine the entry and exit points of the position. Then the news will be released, which will serve as a trigger for the execution of the forecast.<\/p>\n
The purpose of thechanalysis<\/h3>\n
There are 2 categories of participants in the market: sellers and buyers. With the help of forecasting tools, you can determine who is stronger in a particular period and take a profitable position. The main goals of cryptocurrency techanalysis are:<\/p>\n
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Determine the trend.<\/li>\n
Find support and resistance levels.<\/li>\n
Take into account additional factors – indicator readings, trading volumes, figures or patterns.<\/li>\n
Open a trade near one of the price levels with a small stop (an order limiting losses) and a long take (an order to lock in profits).<\/li>\n<\/ul>\n
Types<\/h3>\n
Market participants use different algorithms to search for patterns and collect statistics on the probability of their working out. You can use one method or combine 2-3. There are several types of technical analysis of cryptocurrencies with unique methods and approaches:<\/p>\n
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Graphical.<\/strong> You need to find patterns on the chart and build support and resistance levels. You can use sloping and horizontal lines. Depending on the strength of the pattern and the trend, a rebound or breakout of the level is predicted. The exit point is determined by the height of the pattern, Fibonacci levels or stop\/stake ratio.<\/li>\n
Indicator-based.<\/strong> Traders use additional tools to mathematically calculate the historical chart and get signals. Usually a trading system consists of 3-5 indicators. When 2 or more signals coincide, traders enter the market. The position is closed on the opposite signal.<\/li>\n
Volume analysis.<\/strong> In this case, the number of purchases and sales for a certain period is considered. There are indicators of vertical and horizontal volumes. The first shows the amount injected into the market for a certain time, the second – at a given price level. Usually traders use these indicators to confirm the truth of the trend. If the volume grows when the level is broken, it is most likely not false. The direction of movement will not change. If the indicator falls, the trader enters a reverse transaction, predicting a pullback from the level.<\/li>\n
Candlestick analysis.<\/strong> This is another popular method. Price fluctuations are often depicted in the form of Japanese candles. Body – the range of opening and closing. Shadow – how much the price has risen or fallen. Traders study the combinations. They make predictions about the future movement of digital assets. So, if the candle has no shadow, it means that the market has enough strength to continue moving. A lot of “flights” behind the level with shadows, but the closing of the body above (below) the level of support (resistance) speak of a probable rebound.<\/li>\n<\/ul>\n
Principles of technical analysis of cryptocurrencies<\/h2>\n
Unlike other ways of predicting money markets, this methodology allows you to determine the levels for entering a transaction, a clear direction of the rate and the size of take profit. Technical analysis of cryptocurrency charts does not give a 100% probability of fulfillment of the forecast.<\/p>\n
Sometimes the market goes against the trader’s position, but most trades are closed in the plus. Therefore, with clear adherence to the strategy and competent risk management, you can get a stable income.<\/p>\n
Market events are repeated. They may differ, but the general pattern of movement is preserved. Patterns do not depend on the coin or timeframe. Therefore, the methodology can be used for short-term trading of any assets and investments.<\/p>\n
The same reaction of market participants<\/h3>\n
This postulate is based on the psychology of the crowd. Crypto market participants react to events in a similar way under the influence of emotions. Therefore, all possible scenarios are already present on the charts. It is only necessary to identify patterns and enter the transaction when a signal appears. Understanding the principles of the same reaction of market participants allows you to make more informed decisions when conducting transactions with cryptocurrencies.<\/p>\n
Price movement according to trends<\/h3>\n
Quotes of cryptoassets fluctuate according to the trend. But the trend is not seen as a straight line, it contains a series of consecutive minimums and maximums. Price movement can be divided into 3 types:<\/p>\n
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Flat<\/strong> – the price fluctuates in a range.<\/li>\n
Uptrend<\/strong> – quotes are fixed above the flat. At the same time, each minimum is higher than the previous one. Within a long trend there may be periods of flatness or correction, but the price establishes a new high.<\/li>\n
The downtrend<\/strong> – usually begins after a prolonged trading on the market hayes. At the initial stage it is impossible to say whether it is a fresh trend or a correction within the uptrend. The first signal for a change of direction is the establishment of new lows and lack of market forces for upward movement (highs are declining).<\/li>\n<\/ul>\n
The key to success in trading is the correct identification of the prevailing trend and timely response to the change of direction. The easiest way to trade on the trend. Even with an inaccurate entry, the deal will close in the plus. With competent risk management you can earn in sideways trends.<\/p>\n
Displaying price factors in charts<\/h3>\n
Followers of technical analysis of cryptocurrencies do not track parameters that can affect the quotes of digital assets:<\/p>\n
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Political and economic events.<\/li>\n
Development of platforms – adding new features, listings on exchanges, participation of large investors.<\/li>\n
Project prospects.<\/li>\n<\/ul>\n
The price is considered to take everything into account. Therefore, the rate is set at a fair level relative to the combination of these factors and the future expectations of investors.<\/p>\n
Rules for thechanalysis of the cryptocurrency market<\/h2>\n
The trader’s task is to identify patterns in the movement of rates, test them on history and develop risk management. When creating a trading system on the technical analysis of cryptocurrency charts, you should follow these rules:<\/p>\n
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Do not try to analyze the fundamentals of digital assets. Also, there is no need to study the team and technology of the project.<\/li>\n
Ignore the news background. It is likely that the released information will be a trigger for the fulfillment of the goal of cryptocurrency thehanalysis. When important statistics that can change the trend appear, you can not trade or enter with a smaller volume.<\/li>\n
Pay attention only to the chart and indicator readings. All cryptocurrencies are essentially the same.<\/li>\n
You can trade short and long.<\/li>\n
If the situation changes, it is necessary to exit the transaction on the stop.<\/li>\n<\/ul>\n
What are timeframes<\/h2>\n
The chart of cryptocurrencies consists of periods, each of which is displayed in the form of bars or candles. The timeframe is used for convenient perception of information. The most popular periods can be seen in the table.<\/p>\n
These charts are analyzed by intraday and swing traders<\/center><\/td>\n<\/tr>\n
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1 week and 1 month<\/center><\/td>\n
Suitable for investors<\/center><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n
Varieties of price charts<\/h2>\n
The exchange terminal allows you to display cryptocurrency quotes in different ways. You can track changes at any point in time from the listing of the coin. Each point on the chart is a trading period. The user can get such information:<\/p>\n
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The opening and closing price of the period.<\/li>\n
Minimum and maximum rates.<\/li>\n
Weighted average price.<\/li>\n<\/ul>\n
More than 10 different variants of displaying historical charts are available in trading terminals. Some allow you to familiarize yourself with the maximum data, others show only the main thing, price noise is ignored.<\/p>\n
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The most popular types of charts are lines, candlesticks and bars. Users can customize them according to their preferences.<\/p>\n
Linear<\/h3>\n
This is the simplest type of displaying historical data on cryptocurrency rates. The chart is built in the form of a curve, each point of which corresponds to a timeframe.<\/p>\n
\nBTCUSDT chart<\/figcaption><\/figure>\n
Only one price is displayed on the screen, by default – the closing rate of the period. But you can change it in the exchange terminal.<\/p>\n
Bars<\/h3>\n
Such price charts contain full information about the behavior of the asset at each point in time. Users can find out:<\/p>\n
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\u306b\u3064\u3044\u3066opening and closing quotes of the period<\/strong> – displayed by serifs on the left and right.<\/li>\n
Minimum and maximum prices<\/strong> – the lower and upper points of the bar. If the left serif is higher than the right one, the price has fallen, if it is lower – it has risen. This is the main difference between bars and Japanese candlesticks. Only one color is used to show the direction. The default color is green, but it can be changed in the terminal settings.<\/li>\n<\/ul>\n
Japanese candlesticks<\/h3>\n
The chart contains as much information as when using bars. Japanese candlesticks consist of 2 components – body and shadow.<\/p>\n
\nBitcoin rate during the day<\/figcaption><\/figure>\n
To analyze the coins in the cryptocurrency market by charts, you need to interpret candlesticks. The state of the components is deciphered as follows:<\/p>\n
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The body<\/strong> is a painted rectangle, the top and bottom of which correspond to the opening and closing prices. If the rate fell, it is denoted by red color, rose – green.<\/li>\n
Shadow<\/strong> – a stick at the top and bottom of the candle body. They correspond to the maximum and minimum for the period.<\/li>\n<\/ul>\n
The main patterns and models of technical analysis of cryptocurrencies<\/h2>\n
Graphical figures display the behavior of participants in different phases of the market. Some indicate a flat, others – a continuation of the trend or a reversal. Some of the figures can be interpreted differently depending on the context. The table contains the main patterns of technical analysis of cryptocurrencies.<\/p>\n
Patterns cannot guarantee 100% accuracy of the forecast. Therefore, when trading on patterns, you should necessarily put a stop outside the range boundary and use additional tools – fundamental analysis and volume indicators.<\/p>\n
Rectangle<\/h3>\n
The pattern is formed when the price is in the range created by two horizontal (or slightly inclined) lines for a long time. The pattern usually indicates the continuation of a trend, if there was a clear trend in the market before its formation (unidirectional movement for at least 2-3 weeks).<\/p>\n