After a long-term decrease in trading volume, the 13-day moving average starts to flatten out after a decline. Once the price reaches the 13-day moving average, it gradually rises with a series of small upward candles, easily pushing the price up to the 55-day moving average. We refer to these continuous small upward candles as 'Ants Climbing the Tree.'
It generally appears in the bottom area of the price, marking the start of a strengthening trend.
I. Characteristics of the 'Ants Climbing the Tree' pattern
1. After a long-term decrease in trading volume, the moving averages start to flatten out.
2. When the price reaches the short-term moving average, it gradually climbs with a series of small upward candles, pushing the price up to the long-term moving average.
3. The K-line of the 'Ants Climbing the Tree' pattern must be small upward candles, and the number of small upward candles must not be less than five; otherwise, the 'Ants Climbing the Tree' pattern cannot be established.
II. Trading Strategy
1. Buying Timing: After the 'Ants Climbing the Tree' pattern appears, one can test the waters with light positions; if the price retraces on the first or second downward candle, they can follow up with half a position. After the pullback, if the K-line forms a bullish reversal or breaks through the previous high, they can make a heavy investment.
2. Selling Timing: After the price has surged, prepare to exit when the 13-day moving average shows signs of softening or if the upward momentum becomes heavy with increased volume; sell when the price effectively breaks below the 13-day moving average, or take the opportunity to exit during a market rebound.
Case Analysis:
(1)
As shown in the above figure, this cryptocurrency has been in a horizontal consolidation trend. When the K-line successfully breaks through the 13-day and 55-day moving averages, investors can buy in this price range, and the market will directly experience a sharp rise.
(2)
As shown in the above figure, this cryptocurrency is also one of the stocks that previously exhibited the 'Ants Climbing the Tree' pattern. When the pattern appears, investors can attempt to buy with light positions. If the price retraces on the first or second downward candle, they can follow up with half a position. After the pullback, if the K-line forms a bullish reversal or breaks through the previous high, they can make a heavy investment.
In practice, the 'Ants Climbing the Tree' K-line pattern has significant practical meaning and value.