*chart analysis for beginners*
- Ascending Triangle: Formation characterized by an upward sloping resistance line and a horizontal support line. Indicates a possible continuation of the uptrend when the price breaks the resistance line.
- Head and Shoulders: Reversal pattern with three peaks (two shoulders and a head in the middle). Indicates a change in trend from bullish to bearish when the price breaks below the support line formed by the valleys between the shoulders.
# 2. Support and Resistance- Support: Price level where historical demand is strong enough to prevent the price from falling below. Investors tend to buy more when the price approaches this level.- Resistance: Price level where historical supply is strong enough to prevent the price from rising above. Investors tend to sell more when the price approaches this level.
# 3. Technical Indicators
- *Moving Averages (SMA and EMA): Smoothed lines that show the average of prices over a specific period (SMA) or give more weight to recent prices (EMA). Crossovers between the averages can indicate changes in trend.
- Relative Strength Index (RSI): Indicator that ranges from 0 to 100. Values above 70 indicate overbought and values below 30 indicate oversold.
- MACD (Moving Average Convergence/Divergence): Indicator that shows the difference between two exponential moving averages. Crossovers between the MACD line and the signal line (EMA of the MACD line) can signal entry and exit points.
- Bollinger Bands: Lines that show expected volatility based on the standard deviation of prices. The price usually stays within the bands; touches of the bands can indicate overbought or oversold conditions.
#4. Trading Volume: The amount of cryptocurrency bought and sold over a period of time. Significant increases in volume often accompany significant price movements, indicating confirmation or possible trend reversal.