Third Tip: Pay Attention to Intraday Reversal Signals
There is no bull market that only rises without falling, nor is there a bear market that only falls without rising. The alternating appearance of rises and falls is a fundamental rule of cryptocurrency trends. However, reversals can evolve in two different ways: one is a significant directional change, where a strong upward trend turns into a strong downward trend or vice versa.
Such reversals are typically marked by double tops or double bottoms, also known as W or M shapes, three peaks or three troughs, head and shoulders tops or inverted head and shoulders bottoms, etc. These are considered major movements and generally take about three weeks to a month and a half to develop.
The other type is a technical adjustment, where a small drop occurs within a larger rise, or a small rise occurs within a larger drop. This type of reversal is usually indicated by a K-line that opens high and closes low, often with an upper shadow; or a K-line that opens low and closes high, often with a lower shadow, indicating minor movements. If these conditions are all completed within a single trading day, we will consider it a reversal signal. A significant rise or fall is often composed of several smaller waves of increase or decrease. After a period of rise or fall, there will be a pullback to digest before the next wave of rise or fall comes. At this time, we must learn to follow the operations closely: shorting during a downtrend and immediately going long when a reversal signal appears.
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