Welcome to another post on Cryptocurrency Trading. This is my second post teaching on how to trade and for those that have not gone through the first post, please do so before you continue with this post. The link to the first post is at the end of this post.
As I explained in the first post, everything you will learn in the series of teaching will not be limited to crypto, you can apply it to other trading like stock, FOREX, and so on.
The first post was a kind of introduction where I discussed financial market, different types of financial market, instruments in the market and tickers. I also mentioned the 3 different types of analysis a trader can choose to work with which are technical analysis, fundamental analysis and Sentimental analysis.
Today, I will be discussing Technical Analysis.
Technical Analysis is the probabilistic forecast of future price behavior based on previous price history.
This means for us to be able to forecast the future price behavior, we need to understand the previous price history.
To understand the previous price history, the price movement or behavior is represented as a chat in the market.
The picture above is an example of the trading chat.
Note that in the chat above, the price is kept at the right side instead of the conventional left side. This is to defeat your understanding of price action. You will need to move the price to the left side while performing analysis.
There are different ways of representing price on a chat in the market which include Bars, Candles, Point and figure, Kagi, Renko, Range, Area, Line, Baseline, Heikin Ashi and Line Break.
Below are pictures of the different ways of representing price on a chat in the market;
Point and Figure
####s Line Break
Of all these styles of representing price on a chat in a market, the most commonly used style is Japanese Candles
TO BE CONTINUED...