Steemit Crypto Academy | Homework Task 3 For @stream4u | What is Chart Patterns? | Price Breakout - Continuation Patterns - Reversal Patterns | STOPLOSSsteemCreated with Sketch.

in SteemitCryptoAcademy2 months ago (edited)

Great task to begin the week. More interesting patterns and technical concepts. Thank you Professor @stream4u. for your very clear guidance in this course.

Cover.jpgImage courtesy Edited by @virajherath

Let’s move on to the homework,

Chart Pattern


As per our previous week's studies now we now know that Candlestick provides price movement within a specified time frame. Chart is something that has many candlesticks which means to say many price movements along the time frame we choose. Hence there are many Chart Patterns in a single market. Understanding them correctly a trader can perform three simple actions,

  • Buy
  • Sell
  • Be patient

1.jpg

Price Breakout


Breakout happens when the price movements are above the resistance area and below the support area. In the below chart you can see the resistance level price is at $56,250/- however, the breakout occurs 04 times around the price of $56,500/-

Support level is at $55,750/- and then price has dropped on few occasions with the lowest at $53,500/-

Breakout.jpg

Continuation Pattern


This is where the trend is likely to continue after the Breakout point. Continuation can happen in both directions as Higher High and Lower Low.

  • Higher High Formation

According to this chart, we can see the Higher High Formation tends to resume and remain in play. The resistance level is at $53,000/- after the price breakout, there onwards to $53,250/- then $53,800/- then $54,800/- and finally reaching higher as $56,600/-

Higher High .jpg

  • Lower Low Formation

According to this chart, we can see the Lower Low Formation
tends to resume and remain in play. The support level is at $55,750/- after the price breakout, there onwards to $55,400/- then $54,881/- then $54,300/- and finally reaching the lowest as $53,500/-

Lower Low Formation.jpg

Reversal Pattern?


Reversal Pattern is changing the direction in price movement. This is the opposite of continuation. It also indicates that the existing trend is come to the end. If the current trend is uptrend then the reversal would be to the downside. Likewise, if the trend is downtrend then reversal would be to the upside.

Reversal .jpg

Double Top Pattern


This is where the chart shows two identical high points. We can see the “M” type of letter resembles in this pattern. Such points indicate a bearish reversal in the current trend. Double tops can be a good indicator to sell.

Double top.jpg

Double Bottom Pattern


This is the exact opposite of the Double Top. Here we can see the “W” type of letter resembles in this pattern. This sign could be an indicator for a bullish trend and give a good sign to buy.

Double Bottom.jpg

Importance of Stop Level (STOPLOSS)


Stoploss will give us a cushion to avoid losses and act as a defensive move. With trading, we will tend to go with the flow and make risky decisions. None of these charts or patterns are defined and if the price falls from an unexpected value it may continue the bearish trend to fall much further. Hence to protect from such cases we must have a stoploss.

Where to Find & How to Set A Stoploss?


Having 2 to 3 support levels & resistance levels will give us the cushion we want. If we set the stoploss too far from the support level, we take unnecessary risk and it may lead to huge losses. Also, if we set the stoploss too close then we may lose the chance to make a profit. However, decide any of this will depend according to the set target and the budget you have.

Stoploss.jpg

Conclusion.


I enjoyed learning these new concepts and patterns. It’s like playing something. If you get it wrong you will have losses, you must know how to evaluate and analyze before making any decision. Also, Patience is a must in this game. Hence, It gives me more confidence to trade. I’m getting a feeling that I can read the charts more than yesterday and probably better tomorrow. I’m waiting for the next lesson eagerly.

Thank you Steem Team & @stream4u

#cryptopattern #stream4u-week3 #srilanka #cryptoacademy #bitcoin #binance

Sort:  

Hi @virajherath,

Thank you for joining Steemit Crypto Academy and show your participation in the Homework Task 3.

Review Visit LevelTask RemarkCommentGuidance, Feedback, SuggestionsGradeVerification (Done, Hold)
First
Completed
Good, explained very nicely
In post, use Captions for images
7
Done

Your Homework task 3 verification has been done by @Stream4u.

Thank You.
@stream4u
Crypto Professors : Steemit Crypto Academy

I will use the captions, Thank you @stream4u for your suggestion.

Awaiting for the next lesson 🙂

Hi @virajherath

Can you please add one more exclusive tag #stream4u-week3 in the first 2 tags?

I will revert back to you about this post shortly.

Thank You.
@stream4u
Crypto Professors : Steemit Crypto Academy

I enjoyed learning these new concepts and patterns. It’s like playing something. If you get it wrong you will have losses, you must know how to evaluate and analyze before making any decision.

When you learn to do a perfect technical analysis you can profit lot ! I'm happy to see you are studying this really well ..

That's true.. I have to try learning it perfect 👍

You have been upvoted by @besticofinder,A Country Representative from SRI LANKA. we are voting with the Steemit Community Curator @steemcurator07 account to support the newcomers coming into steemit.

Follow @steemitblog for the latest update on Steem Community and check the ongoing contests : Check here

Coin Marketplace

STEEM 1.20
TRX 0.13
JST 0.141
BTC 60752.79
ETH 2160.86
BNB 543.96
SBD 8.84