From a9f6d28a941d77a8c2fea060d55ffab610a6b939 Mon Sep 17 00:00:00 2001
From: =?UTF-8?q?BT3GL=20/ba=C9=AAt=C9=A1=C9=9D=C9=AB/?=
<1130416+bt3gl@users.noreply.github.com>
Date: Sun, 5 Jun 2022 16:36:27 -0700
Subject: [PATCH] Update technical-analysis.md
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DeFi/day-trading/technical-analysis.md | 159 +++++++++++++++++++++++--
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diff --git a/DeFi/day-trading/technical-analysis.md b/DeFi/day-trading/technical-analysis.md
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--- a/DeFi/day-trading/technical-analysis.md
+++ b/DeFi/day-trading/technical-analysis.md
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+---
+
## Candlestick charts
* data rich trading analysis
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-## Hammer pattern
+### Hammer pattern
* bullish pattern
* sellers drove price lower during the day
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-## 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
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+
+### 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
+
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+
+### 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
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+
+
+---
+
+
+## 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
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+### Desceding wedge - lower highs
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+### 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
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+### 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