Good night everyone.... I will be participating earlier this week and this is the second class I will be taking this week. It's nice to be able to participate in a class that is mentored directly by professor @lenonmc21. The topic that we will cover in this class is about “Trends, Supports, Resistances, and Simple Chart Patterns”. As a learning material for the students, the professor has given some homework to be done and let's finish it.
1.) Define in your own words what is a "Trend" and a trend line and what is their role in the chart?
In the world of cryptocurrency, trends are something that is very familiar to traders because trends are market price movements that tend to move in one direction following the investment flow that is happening in the market and every experienced trader will always monitor every trend that occurs in the market and analyze it to make a prediction before entering the market. By understanding the trends in the market, traders can determine the right entry and exit points and take every opportunity.
There are two types of trends that you need to know, namely an uptrend called bullish and a downtrend called bearish. An uptrend indicates that demand is greater than supply while a downtrend indicates that supply is greater than demand. To see how strong the trend is in the market, we can use trend lines by connecting the maximum and minimum points in a certain time range based on the patterns formed on the price chart for a trading pair.
2.) Explain how to draw an uptrend line and a downtrend line (Show screenshots respectively)
In simple terms, to draw a trend line on a trading chart is not difficult. you just need to define two or more points and then connect them on a straight line. In an uptrend, you need to connect two or more support points on a straight line, while in a downtrend you need to connect two or more resistance points on a straight line. For more details, you can see it in the following two examples.
3.) Define in your own words what "Support and Resistance" is and how we can identify the two zones (Show screenshots of each zone)
For traders, these are two important things that must be understood, especially in making price analysis and predictions. The Support zone is a strong entry point to buy assets, while the Resistance zone is the right exit point to get out of the market by selling assets that have been purchased during the Support zone.
The resistance zone is usually the best point of the bullish phase, while the Support zone is usually the lowest point of the bearish phase. But as long as the Uptrend and Downtrend occur, we can also see that there are also many Resistance points and Support points that keep changing and changing and this is an opportunity for traders to take opportunities.
To identify the Resistance zone and the Support zone simply, you can see it on a price chart based on previously formed patterns so that we can determine the next Support and Resistance points based on several Resistance points and Support points that have occurred before. For more details, you can see it in the following two examples.
4.) Explain in your own words at least 2 simple graphic patterns with screenshots
This is a pattern that is formed due to a reversal after the Bullish occurrence and reached the Resistance point, but underwent a slight correction in the decline in price before rising again near the previous Resistance point and finally falling deeper to form a Double Top pattern. This pattern usually indicates a change in trend and can even be the end of an Uptrend and then the trend turns into a Downtrend.
This is the opposite of the Double Top pattern. This pattern is formed due to a reversal after the Bearish occurrence and forms two Support points which are interspersed with one price increase so as to form a Double Down pattern and then the price begins to move up because usually this indicates a trend change from Downtrend to Uptrend.
Market trends are basic things that every trader must understand because we need to see the movement of the market direction so that we do not experience losses. Good chart reading is also very necessary for a trader, especially in determining Support and Resistance points, good technical analysis is also needed before entering the market so that we can take the right action at the right time and exit from the market with a profit.