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The success of trading often depends on whether someone can determine the possible profitable assets before the sharp price movement. This is especially clear in encryption, where high volatility is the base. Technical analysis – historical prices and plans patterns – is one of the main ways to predict the price guidance. Candle analysis, which is part of technical analysis, allows traders to visualize potential price movements. OCTA, a globally recognized broker, is involved in how to use candles analysis to determine specific patterns that may indicate future price changes.
Understanding Сlestick сharts
Candlestick Plans helps traders respond quickly to market transformations by providing clear visual signals. Unlike linear plans, candles provide more details in a specific time frame, which is necessary in the fast -paced encryption market. Common upscale patterns include:
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hammer. Candle with a small body and a lower long wet. It may indicate a reflection to the upward trend when it appears after the declining direction.
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Al -Swamiya al -Masouqa. The pattern of appointed where the second (green) calm (green) is completely abandoned on the first (red) roller candle. It often indicates a potential upward movement when found at the bottom of the declining direction.
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Double bottom. Forming with two of the lowest similar levels, indicating an increase in reflection and increased prices.
The landing patterns include:
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Suspended. A small body candle often indicates a long fabric, which appears at the top of the upward trend, often indicates a shrinkage.
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Discounting soaked. A pattern of factors where the second (red (red) dumping candle is completely abandoned.
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Dual summit. He structure is often warned with similar higher levels of reflection to the negative side.
These candle patterns allow merchants to expect potential price reflection points on time, develop a proactive strategy, and confirm their commercial decisions in the volatile encryption market.
In addition to the upscale and dramatic patterns, there are so -called neutral candlestick patterns such as doji. It often indicates the frequency of the market when the relative strength of buyers and sellers is almost balanced. Below are some of the Model Duji Candles:
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Classical breastfeeding.
The opening and closing prices of the candle coincide almost. The candle resembles a thin horizontal line with short shades on top and bottom. If the closure price is higher than the opening price, Duji Al -Alami may appear, indicating an increase in potential asset prices.
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Long -legged Duji.
Style with long shades up and (or) down. It indicates the main frequency, with a greater possibility of a landing market.
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Riksha Duji. This style contains a similar shade, and the price in the middle of the trading range.
The main elements of graphical analysis
To predict the guidance of prices and standard trade, traders must also use other tools for graphics analysis. Below is that the main that must be taken into account when analyzing the candles patterns.
Support and resistance levels
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SupportA level in which prices tend to stop decline and start rise due to an increase in the purchase interest.
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resistance: A level where prices are disrupted or the opposite due to the pressure pressure.
These levels of historical highlands and declines are determined. The more times when the price interacts to a level, the stronger it becomes. It is worth noting that the support level can become resistance if the price decreases, and vice versa.
Traders often look to trade on the reversion of these levels or collapse behind them. For example, on the historical graph 4H BTC/USD, the price approaches the resistance level 99,320 dollars, and the ups of the ups mentioned above, then decisively separated upward.
direction
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The upward trendDecree through the lowest levels, indicating support in the emerging market.
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The declining directionDecree through its highest levels, which indicates the resistance in the falling market.
Avoid trading against trend to reduce risk. The reflection of trend can be a strong signal to determine the market shift points.
A guide to reading the pattern of the candlestick.
Candle plans offer an insight into the market’s feelings, but their interpretation properly is necessary. Here are many practical advice for merchants:
Reading patterns in context. In UPTRENDS, look for a declining reflection signals (for example immersion). In declines, search for bullish signals (for example, hammer, upward ascending). In sides markets, Dojis and long candles indicate uncertainty-it is better to wait a clear signal.
Focus on the main levels. The patterns that are formed near the main support levels or resistance (local highlands/bottoms or historical axes) are likely to play successfully.
Analysis of the size of the candle and shape. Large candles with solid bodies indicate a strong momentum. Small candles with a long body (Doji) indicate frequency and uncertainty. Weakness in motivation and smaller candles is often inverse patterns such as hammers or strange formations.
The back test with historical data.
The study of the historical procedure helps to enhance your understanding of patterns. For example, the 1D BTC/USD chart shows that the trend has turned up after the bullish spelling pattern has been formed with a support of $ 40,779. After that, the price approached the resistance at $ 64,933, and after the formation of flooding candles, the original failed to face the upper direction, and its price decreased sharply towards supporting $ 40779 and then to 35,387 dollars.
Dependence on single candlestick patterns is risky, as they failed to display the full image – when analyzed in the context, they can determine early signals of the possible promising assets. Trading decisions should always be confirmed by additional technical indicators. The combination of candles and technical tools can increase the accuracy of your expectations. Car Young Ang, a financial market analyst and mediator in Octa says
conclusion
Graphic analysis of merchants helps determine promising assets by explaining visual patterns. However, there is no approach that guarantees accuracy. To reduce risks, use a comprehensive strategy: studying candle formations along with major levels and trends, combining them with indicators and size data and always looking into the basic context. Macro events, trading volume, liquidity, and market morale – all of these factors constitute the path of encrypted currency. The more the data you evaluate, the more chances of making an enlightened decision and avoid expensive errors.
Relationship: CFD trading involves risks. This content is for educational purposes only, not investment advice. The past performance does not guarantee future results. Trade responsibly.
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