diff --git a/DeFi/day-trading/technical-analysis.md b/DeFi/day-trading/technical-analysis.md index ec78d05..026252f 100644 --- a/DeFi/day-trading/technical-analysis.md +++ b/DeFi/day-trading/technical-analysis.md @@ -13,6 +13,8 @@
+--- + ## Candlestick charts * data rich trading analysis @@ -32,7 +34,7 @@
-## Hammer pattern +### Hammer pattern * bullish pattern * sellers drove price lower during the day @@ -49,7 +51,7 @@
-## Shooting star pattern +### Shooting star pattern * bearish pattern * buyers drove price high @@ -63,7 +65,7 @@


-## Bullish engulfing pattern +### Bullish engulfing pattern * bullish pattern * bullish candlestick "engulfed" the bearish candlestick @@ -76,7 +78,7 @@


-## Bearish engulfing pattern +### Bearish engulfing pattern * bearish pattern * bearish candlestick engulfed the bullish candlestick @@ -89,9 +91,152 @@


- - - +---- + +## Chart patterns + +* used in conjuction with candlestick charts +* longer-term analysis of market movements +* bullish and bearish patterns +* used with day trading and swing trading +* dont tell about longer term trends + + +### Double top + +* bearish pattern +* buyers tried wtice to push price higher +* buyers unable to push price higher +* price has no moment at this level +* buyers run ot of steam +* sellers are in the market + + + +
+

+ +

+
+ +### Double bottom + +* bullish pattern +* sellers came in twice +* price found support of buyers twice +* buyers happy to pay up +* sellers may run out and buyers need to pay more +* buyers are in the market + + + + +
+

+ +

+
+ + +### Asceding triangle + +* charts never trade in a straight line +* charts trend +* highs and lows are important +* consolidation is imporant +* higher highs or higher lows is bullish +* narrowing of a range can preceed a breakout + + +
+

+ +

+
+ + +--- + + +## Trends + + +* we can't trade from patterns all the time, they are quite rare +* trends patterns will guide us more often +* patterns can be housed within trends +* if we can find the trend, we can ride the trend for profit + +
+ +### Asceding wedge - higher lows + + +
+

+ +

+
+ +### Desceding wedge - lower highs + + +
+

+ +

+
+ +### Consolidation + +* give us a strong area of trade where traders have been before +* area in the chart moving sideways +* we can use consolidation as a guide for our entry/exit points +* sometimes preceed breakup +* where buyers/sellers are at equilibrium and can't last forever +* use these levels for our stop loss levels + +
+

+ +

+
+ +### Support and resistance + +* support and resistance are simply significant price levels +* resistance can become support if a price breaks through that level in an uptrend +* vice versa for a downtrend + + +### How to trade with trends + +1. Identify the market trends +2. ask where are the main areas of trade +3. where is support and resistance? +4. any chart pattern? +5. make your entry based on the daily trade action +6. is the candlestick telling us that the trade will go in the direction of our trade? +7. is the trade bullish or bearish based of candlestick patterns? + +### Moving averages + +* SMA: arithmetic mean of prices over a given time period +* EMA: weighted and give more importance to recent prices + +### Relative strength index (RSI) + +* plots the relative strength of the price compared to previous prices +* momentum indicator +* above 70: price is relatively expensive (overbought) +* below 30: price is relatively cheap (oversold) +* can't predict how the price will change in the future + +### Average true range + +* measure of daily price volatility +* tell us the true amount the price could move in a given day +* largest probably move for one day based on previous data +* can be used to set our stop loss and give the trade some breathing room